20230804-招银国际-百威亚太-01876.HK-2Q_organic_sales_+15__overall_a_mix_bag_but_we_see_China_strength_a_good_trade_5页_1mb

Budweiser APAC Holdings Limited (traded as 1876 HK) received an analyst update on its financial performance for the second quarter of 2023. Overall organic sales grew by 15%, but the results were mixed due to strong performance in China offset by weak shows in South Korea. In China, sales volumes increased by 11.0% and average selling prices rose by 7.8%, driven by consumer demand for premium beers. However, South Korea saw a 7% revenue decline and a 30% normalized EBITDA slip, attributed to price hikes in response to an excise tax, with potential for improvement as competitors follow.

The analyst maintains a HOLD rating, stating no immediate solution for Korea's operational issues (accounting for 18% of EBITDA), but notes the positive momentum in China, which aligns with sector picks like CR Beer and Tsingtao. Financial forecasts were revised downward: revenue and profits reduced for 2023-2024 due to these factors, with the target price lowered to HK$18.60 from HK$26.60, reflecting a 16.0x EV/EBITDA multiple, down from the three-year average.

Key insights from the earnings call emphasize resilience in China, with management highlighting less reliance on lower-income groups and continuing premiumization trends despite a slowing economy. Operationally, opportunities exist through expanded distribution, but currency erosion from a weak RMB and KRW also impacted results.

Risks include ongoing uncertainties in Korea and potential market divergences, with the company expected to grow in strongholds like China if similar trends persist elsewhere. شركة تعليق، شاملة، fiscal implications and industry benchmarks remain under review.