Chang is finally changing ThaiBev’s fortunes

SINGAPORE (Sept 5): CIMB is maintaining its “add” recommendation for Thai Beverage and raising its target price to $1.14 from 92 cents after the group’s rebranding exercise for Chang beer last August successfully boosted the group’s overall earnings in 2QFY16.

Chang beer was rebranded to better connect with younger consumers. The group achieved this by raising prices, investing in packaging and marketing to remove the stigma of Chang as a low-income beer, and reconfiguring its sales distribution to improve the freshness of beer in its channels.

Following the exercise, ThaiBev’s beer sales volumes shot up 61% in 1HFY16, while revenue rose 70% from price hikes. In addition, pretax earnings rose even faster at 330% from higher operating leverage.

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