Cans of Carabao energy drink move along a conveyor on the production line at the Carabao Group Pcl plant in Chachoengsao, Chachoengsao Province, Thailand. (Photographer: Brent Lewin/Bloomberg)

Thailand's Red Bull Rival Slumps From Top to Bottom of World

(Bloomberg) -- The onetime top soft-drink stock in the world is now the industry’s worst-performing equity.

Thailand’s Carabao Group Pcl, energy-drink maker and sponsor of a high-profile English soccer competition, has fallen about 40 percent on a total return basis from a peak in October last year. The drop is the worst globally among soft-drink makers with a minimum $1 billion market capitalization, data compiled by Bloomberg show.

Thailand's Red Bull Rival Slumps From Top to Bottom of World

Named after one of Thailand’s most successful rock bands, Carabao overtook Red Bull domestically, surged following its listing in 2014 and two years later became the world’s best-performing large soft-drink stock. But the challenge of successfully expanding in China and the U.K., key overseas markets, weighed on the shares more recently.

“The U.K. operation has been disappointing, even with huge spending and investment, while China is a very tough market,” said Naree Apisawaittkan, an analyst at Phillip Securities Pcl in Bangkok. “The baht’s strength will also hurt profit margins from exports at a time when domestic consumption is weak.”

Thailand's Red Bull Rival Slumps From Top to Bottom of World

Chief Executive Officer Sathien Setthasit said in December that he plans to pour $300 million into expanding in China. Sathien was a billionaire when Carabao’s stock peaked last year. He now has a net worth of $718 million following the slide in the shares, according to the Bloomberg Billionaires Index.

"We are really suffering in China as the sales haven’t grown as fast as we expected," Sathien told a meeting with investors Monday. "Still, there remains big potential in this huge market."

Net income slid about 16 percent last year to 1.2 billion baht ($40 million). The shares have more than doubled since listing, despite the recent drop.

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