How Does Thai Beverage Public Company Limited Make Money?

It is important to know what a particular company does and how it makes money before investing in it. Investing in a business without such knowledge is akin to travelling to an unknown territory without a map.

On that note, let’s check out what business Thai Beverage Public Company Limited (SGX Y92) is involved in and how it generates its revenue.

Thai Beverage is a food and beverage outfit which is one of the largest in Southeast Asia. The firm also has a 28.5% stake in Fraser and Neave Limited (SGX: F99), Singapore’s long-established beverage producer and distributor.

Let’s take a look at the table below for the revenue contribution of each business segment for the financial year ended 30 September 2017 (FY2017):

Source: Thai Beverage Public Company Limited Annual Report FY2017

The Spirits segment, which raked in most of the revenue in FY2017, is involved in the production and sales of branded spirits products and soda. The company produces brown spirits, white spirits, and others. Thai Beverage owns 18 distilleries that produce these spirits. The white spirits have a market share of more than 90% in Thailand. As for the brown spirits, the company owns three major brands – Hongthong, Blend 285 and Sangsom.

Next, the Beer segment produces and sells branded beer products. Under this segment, the major beer brands are Chang, Archa, and Federbräu.

In 2017, Chang beer was awarded the “Thailand Country Winner” in the category of Lager beer with Helles/Münchner production style at the World Beer Award 2017, an international beer competition held yearly. Meanwhile, Federbräu is the first and only beer in Thailand which uses high-quality single malt from a single source in Germany. It, too, won an accolade during the World Beer Award 2017 for the best German style pale beer.

The Non-Alcoholic Beverage segment is involved in the production and sales of branded water, ready-to-drink coffee, energy drink, green tea and fruit flavoured drinks. This business does both domestic and international manufacturing and distribution.

Last but not the least, the Food segment runs Japanese restaurants, and distributes food and beverages.

The following shows the breakdown of sales between the various segments in terms of percentage:

Source: Thai Beverage Public Company Limited Annual Report FY2017

Now that we know the basics of Thai Beverage’s revenue streams, we can then delve into other aspects of the firm such as its profitability, strength of its balance sheet, its cash-generating abilities and so on before deciding to invest in it.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.