VIETNAM May 2020
ThaiBev sees plunge in investment value in SABECO in 2020
After pumping more than US$5 billion for a 53% stake in SABECO, ThaiBev now sees its investment value plunged by more than half, and this is exacerbated further by the recent COVID-19 pandemic.
In 2017, ThaiBev agreed to acquire Sabeco at a very high price of nearly US$5 billion. As of now, half of ThaiBev’s investment value in SABECO has disappeared and it is now valued at only US$2.3 billion.
Prior to 2020, SABECO was a lucrative investment as it helped to increase ThaiBev’s revenue from beer production to US$4 billion, an increase of 27% from the previous period, while revenue grew by more than 50%.
In 2020, beer consumption has been declining because of a series of newly released regulations, including Decree 100 which took effect in early January this year which imposes heavy sanctions on drunk drivers, a decree on advertisements about alcohol products which took effect in February 2020, and the spread of the coronavirus.
Analysts however projected that the sharpest decline in beer consumption was in 1st quarter 2020 and this will gradually improve in the following quarters as long as COVID-19 pandemic starts to recede.
ThaiBev expects SABECO revenue to drop by 14.7% in 2020, nevertheless the lower input material costs and its move to restructure business activities are expected to help Sabeco increase its gross profit margin.



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