20231019-招银国际-百威亚太-01876.HK-3Q_preview__flattish_rev_EBITDA_growth_5页_1mb

Report Context: This excerpt is from an equity research update on Budweiser APAC (1876 HK) dated October 19, 2023, by CMB International Global Markets, analyzing the company's third-quarter performance and outlook.

Financial Forecasts: The report downgrades 2023E revenue and net profit projections by 5.8% and 5.2%, respectively, citing a potentially weak quarter. It expects the company's third-quarter revenue to reach $1.8 billion with flattish growth, and maintains a HOLD recommendation with a revised target price of HK$16.8.

Regional Performance:

• APAC West: Forecast sales of $1.5 billion, with a potential low single-digit percentage decline in China due to a high base and unfavorable weather. Premiumization trends show margin expansion, but offset by shipment challenges.
• APAC East (South Korea): Driven by a 6.9% price hike initiated on October 4, expected to show improvement starting in the second quarter of 2024, though current estimates show a moderate decline.

Key Factors and Strategies:

• The downward revisions factor in external headwinds and peer comparisons (e.g., CR Beer and Tsingtao Brewery).
• Declining raw material prices are expected to support profitability in a slower growth environment, with incremental improvements in operating efficiency.
• S. Korea's weakness is attributed to tax hikes and price gap narrowing among brands.

Valuation and Metrics: The target price of HK$16.8 represents a 12.8% downside from current prices, based on a 15.0x end-2023E EV/EBITDA multiple, down from a previous 16.0x. Financial metrics include a net cash position, P/E ratio, and gross margin trends.

Additional Insights: Highlights include competitor analyses (e.g., Oriental Brewery's price hike), market data on share performance and liquidity, and comparisons with industry benchmarks.