Brokers' take

Compiled by Navin Sregantan

THAI BEVERAGE

HOLD (MAINTAINED)

OCT 3 CLOSE: $0.865

TARGET PRICE: $0.87

UOB Kay Hian, Oct 3

Anheuser-Busch InBev's Asia-Pacific unit (Budweiser APAC) was listed on the Hong Kong Exchange on Sept 30.

In terms of beer operations, the Budweiser APAC entity is larger in scale than Thai Beverage.

Budweiser APAC is also looking to tap the expanding premium beer segment in Vietnam, similar to Thai Beverage's Sabeco.

Budweiser APAC seems to be at a premium to its Asean peers, but slightly more comparable with Chinese beer companies.

Despite occupying only a small market share in Vietnam, we think that it is noteworthy that Budweiser APAC has marked the country as a "principal market".

As for a prospective local partner, it is noted that Carlsberg has been in talks to increase its stake in Habeco, while Heineken, as a traditional rival, would also seem incompatible.

We think this might narrow it down to Sabeco, with its 26 breweries and strong distribution network as a potential match.

Share price catalysts for Thai Beverage include a successful ramp-up of its Sabeco business, gaining market share in the beer segment and merger and acquisition opportunities. Our suggested entry price is $0.76.

AEM HOLDINGS

BUY (MAINTAINED)

OCT 3 CLOSE: $1.16

TARGET PRICE: $1.50

Maybank Kim Eng, Oct 2

A Digitimes' report dated Sept 20 corroborated this, suggesting that AEM's key customer has been stepping up orders for extreme ultraviolet lithography (EUV) equipment since August.

This suggests the customer's 7nm chips are on track for 2021, as EUV is a critical enabler for this node.

As AEM has seen increased equipment orders at its customer's new nodes, we think some 2021 orders may be front-loaded to 2020.

HDMT equipment's order lead time is around five months.

Semiconductor players such as Qualcomm are increasingly aware of the benefits of system level test (SLT) and may become potential AEM customers.

We see earnings per share (EPS) upside for AEM for FY2020-2021, from the frontloading of some equipment to 2020 and contributions from its hybrid project and Huawei.

A risk to our forecasts is any severe drop in demand for AEM's key customer's chips while strong FY2020 guidance could be a catalyst.

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