Saigon Beer Alcohol Beverage Corporation, commonly known as Sabeco and listed on the Ho Chi Minh Stock Exchange under the ticker SAB, is a prominent Vietnamese beverage company. Sabeco is known for its popular beer brands, including Saigon Special, Saigon Export, and 333.
In the first half of 2024, Sabeco recorded revenue and net profit of 5.1 percent and 5.8 percent increase year-over-year respectively, driven primarily by price increases implemented in 2023. The price adjustments aligned with market trends as competitors also raised prices.
Despite this growth, Sabeco’s stock price declined by 5 percent from early 2024 to September 9. This is likely due to ongoing challenges in the beer industry.
In 2023, the industry faced economic difficulties, a decline in beer consumption, stricter enforcement of Decree 100 regulating drink-driving, and rising input costs. As a result, Sabeco’s revenue and net profit fell by 12.8 percent and 23 percent compared to 2022 respectively.
Notably, Sabeco is looking to acquire a majority stake in Saigon Binh Tay Beer Corporation, commonly known as Sabibeco Group, which produces beer under the Sagota brand. Sabeco, along with its related parties, currently holds a 22.7 percent stake in Sabibeco and plans to increase it to 65.9 percent.
With Vietnam’s beer industry experiencing negative or slower-than-expected growth, the move could improve Sabeco’s consolidated results. If Sabeco succeeds in taking control of Sabibeco, it would overtake Heineken as the largest beer producer in Vietnam.
Disclosure: The author does not have any financial interest in SAB stock.
See also: What’s Happened to Vietnam’s Beer Market? Unpacked 2024