SABECO posts stronger earnings ahead of Lunar New Year peak

Photo: SABECO

According to financial statements published on its website on October 29, Saigon Beer-Alcohol-Beverage Corporation (SABECO), listed under ticker SAB, recorded consolidated net revenue of just over VND20 trillion ($770 million) in the first nine months of 2026, up 5.1 per cent on-year, while net profit rose 8.9 per cent to just over VND3.76 trillion ($145 million).

Gross profit increased 13.5 per cent to around VND7.6 trillion ($293 million), lifting the gross profit margin from 35.2 to 38 per cent. The improvement reflected revenue growth, favourable movements in certain raw material costs, and greater production efficiency, despite continued competition and logistics cost pressures.

Source: SABECO

In the third quarter, revenue reached around VND6.7 trillion ($257 million), up 3.8 per cent on-year, while net profit stood at just over VND1.27 trillion ($49 million). The gross profit margin improved to 38.1 per cent, while the core operating profit margin remained at 18.3 per cent. Quarterly earnings were also affected by a high comparison base following accounting impacts associated with the SABIBECO transaction in the same period last year.

Beyond profitability, SABECO's cash generation strengthened considerably. Net cash flow from operating activities reached just over VND4.12 trillion ($159 million) in the first nine months, up 23.1 per cent from around VND3.35 trillion ($129 million) a year earlier.

As of September 30, SABECO's total assets stood at nearly VND30 trillion ($1.15 billion). Cash and short-term financial investments amounted to just over VND18.5 trillion ($712 million), accounting for 61.9 per cent of total assets, while fixed assets and long-term financial investments represented 14.9 and 10.7 per cent, respectively.

The substantial cash position reflects consistently positive operating cash flow, which reached just over VND2.1 trillion ($81 million) in 2023, around VND4.36 trillion ($168 million) in 2024, and nearly VND3.9 trillion ($150 million) in 2025, before generating another VND4.12 trillion ($159 million) in the first nine months of 2026.

This financial strength has supported SABECO's consistent cash dividend policy. The brewer paid dividends equivalent to 50 per cent of par value in both 2024 and 2025, with the same payout ratio planned for 2026.

SABECO's Board of Directors recently approved an interim cash dividend of 30 per cent for 2026, equivalent to VND3,000 ($0.12) per share. The record date is December 29, with payment scheduled for February 2, 2027.

The payment demonstrates the company's ability to reward shareholders while retaining financial flexibility for operations and future investments.

SABECO's valuation also remains relevant to investors. According to SSI Securities' iBoard platform, SAB shares trade at a price-to-earnings ratio of around 11.4 times, compared with a peak of just over 33 times in 2021. Its price-to-book ratio stands at around 2.8 times, against just over 4.6 times during the same period.

Although these multiples have declined substantially, future share performance will depend on sustained earnings growth, operating efficiency, and shareholder returns.

Alongside its financial performance, SABECO is expanding its product portfolio and consumer engagement channels ahead of Lunar New Year 2027, traditionally a peak consumption period for Vietnam's beer industry.

The company is developing additional offerings, including 333 Triple Pure and 250ml cans, to meet changing consumer preferences. It is also strengthening modern trade, e-commerce, and digital engagement channels to broaden market reach.

SABECO currently operates 26 breweries with combined annual capacity exceeding 2.45 billion litres. Its established brands, including Bia Saigon and 333, extensive manufacturing network, and nationwide distribution system provide advantages in maintaining its market position.

The industry's longer-term outlook remains promising. According to Expert Market Research, Vietnam's beer market was valued at approximately $10.2 billion in 2025 and is projected to reach $19.3 billion by 2035, representing compound annual growth of around 6.6 per cent.

Meanwhile, VNDirect Securities expects beer consumption to recover during 2026-2027, supported by improving consumer confidence and rising incomes. The brokerage anticipates a 9.3 per cent on-year increase in average per-person income, potentially strengthening consumer spending.

Domestic consumption stimulus measures, including the first national concentrated promotion programme, are also expected to support demand.

VNDirect believes these developments could allow leading brewers such as SABECO to consolidate their competitive advantages and expand market share.

The company's production scale and extensive supplier network provide bargaining power in international raw material procurement, helping mitigate input cost volatility.

Its established brands and broad distribution network could also provide flexibility to adjust selling prices gradually. According to VNDirect, this may enable SABECO to pass on part of the additional burden from higher consumption taxes to consumers while limiting the impact on sales volumes.

Nevertheless, competition, changing consumer behaviour, and rising operating costs remain challenges. Sustaining profitability will require careful management of production, distribution, and marketing expenses alongside continued product development.

The improvement in gross margins during the first nine months indicates progress in production cost management, although maintaining these gains will be important as competitive pressures persist.

As SABECO prepares for Lunar New Year 2027, stronger earnings, positive operating cash flow, and substantial cash reserves provide a foundation for navigating industry challenges.

Its ability to capitalise on production scale, brand recognition, and distribution strength, while maintaining financial discipline and consistent dividends, will remain central to its business outlook and the investment case for SAB shares.