20220225-招银国际-百威亚太-01876.HK-4Q_beats_and_prompts_further_earnings_upgrade_3页_804kb

Budweiser APAC (1876 HK) - Company Update Summary

Core Content

This report provides an update on Budweiser APAC (1876 HK), highlighting its strong 4Q performance, financial results, and future outlook. The company has shown resilience in its operations, particularly in the China market, and the report outlines key financial metrics, strategic initiatives, and analyst recommendations.

Main Points

4Q Performance

• Revenue Growth: Budweiser APAC exceeded expectations in 4Q, with a $8.5% volume growth and a $10.3% ASP (Average Selling Price) increase in the Asia Pacific region.
• EBITDA Growth: The company achieved a $29% EBITDA growth, surpassing pre-pandemic levels.
• Earnings Upgrade: The analyst upgraded the 2022E revenue forecast to US$7.4bn and lowered the opex ratio by 2.1ppt.
• Normalized EBITDA: The normalized EBITDA increased by ~4.5% for 2022E.
• Target Price (TP): The new TP is set at HK$28.0, representing a +19.0% increase from the previous TP of HK$26.6.

Financial Highlights (FY19A to FY23E)

Key Financial Metrics

• Gross Profit Margin: Improved from 52.0% (FY20A) to 54.5% (FY23E).
• Operating Margin: Increased from 16.8% (FY20A) to 24.5% (FY23E).
• Net Margin: Rose from 9.2% (FY20A) to 16.4% (FY23E).
• DPS (Dividend per Share): US$3.02 in 2021, with a 42% payout ratio.
• EV/EBITDA (x): Based on 21x end-22E, reflecting the stock's 3-year average.

Strategic Focus

• Premiumization: The company is expected to continue its premiumization strategy, with a 40%+ premium volume contribution and a 50%+ GPM (Gross Profit Margin), which is the highest among its Chinese peers.
• Cost Control: The firm has implemented cost control measures, including hedging, digital transformation, and operating efficiency improvements, to mitigate input cost inflation.
• Price Hikes: Further price hikes are under consideration based on local inflation dynamics.

Shareholding and Performance

• Shareholding Structure:

  • AB Inbev Brewing Co: 87.2%
  • JPMorgan Chase & Co: 0.9%
  • T Towe Price: 0.6%

• Stock Performance:

  • 1-mth: +13.5%
  • 3-mth: +17.1%
  • 6-mth: +23.6%

• Market Cap: HK$317,179 million

• 52-week High/Low: HK$27.8 / HK$18.2

Analyst Recommendations

• Rating: BUY
• TP: HK$28.0
• Reason: Strong performance, effective cost control, and a clear premiumization trajectory.

Key Ratios

Conclusion

The strong 4Q performance, driven by the China business and improved operating efficiency, has led to a significant increase in EBITDA and a revised target price. The company is well-positioned for continued growth through premiumization and cost control measures, making it a preferred investment in the China consumer staples sector.