Core Viewpoint - The beer industry in China is experiencing a decline in sales volume, with major players facing challenges, while some smaller brands are showing growth in both sales and profitability [1][2][4]. Sales Performance - In 2024, major beer companies in China reported sales volume changes: Budweiser APAC down 11.8%, Qingdao Beer down 5.86%, China Resources Beer down 2.5%, Chongqing Beer down 0.75%, Yanjing Beer up 1.6%, and Zhujiang Beer up 2.62% [2][4]. - The overall beer production in China decreased by 0.6% in 2024, indicating a decline in consumer sentiment towards daily fast-moving consumer goods [2]. Market Dynamics - The gap in market share among major players has narrowed, with leading companies like China Resources, Qingdao, and Budweiser all experiencing declines in revenue and sales, while Yanjing and Zhujiang have continued to grow beyond industry levels [4]. - Zhujiang Beer saw a nearly 37% increase in net profit, while Yanjing Beer’s net profit surged by over 50% [4]. Premiumization Trends - Yanjing Beer achieved total sales exceeding 4 million kiloliters in 2024, with its flagship product Yanjing U8 selling close to 700,000 kiloliters, marking a growth rate of over 30% for two consecutive years [5]. - Zhujiang Beer reported a nearly 14% increase in sales of high-end beer products in 2024 [5]. Challenges for Leading Brands - Budweiser APAC faced a 1.4% decline in revenue per hectoliter in China, while Qingdao Beer’s sales of mid-to-high-end products dropped by 2.65% [6]. - Despite overall revenue and sales declines, leading beer companies emphasize that their premium products continue to grow, with China Resources Beer reporting that mid-range and above beer sales exceeded 50% of total sales for the first time [7]. Pricing and Profitability - The ton price for major brands in 2024 was as follows: China Resources Beer over 3,300 yuan, Qingdao Beer over 4,200 yuan, Budweiser APAC over 5,300 yuan, Chongqing Beer over 5,200 yuan, while Yanjing and Zhujiang Beer were around 3,100 yuan and 3,800 yuan respectively [9]. - Despite slight revenue declines, China Resources and Qingdao Beer still reported revenues exceeding 36 billion yuan and 32 billion yuan respectively, indicating a significant lead over smaller competitors [11]. Future Outlook - The beer industry, while facing volume declines, still has potential for slow growth if price increases can outpace volume decreases [11].

中信证券此前表示，预计2025年啤酒原材料价格波动幅度小于2024年，部分原材料价格仍有下行空间如 大麦和玻璃等，但铝价近期呈现上涨趋势，或将抵消大麦等原材料价格下行所带来的成本下降空间，整 体来看，该行预计2025年啤酒成本相对稳定，大麦延续2024年的价格下行仍能带来一定的成本端缓解， 有望提升酒企的盈利水平，看好酒企在消费政策端的持续刺激、餐饮场景的恢复下实现2025年的业绩企 稳增长。 港股异动 | 啤酒股午后涨幅扩大 百威亚太(01876)涨 近7% 华润啤酒(00291)涨超6% 消息面上，华润啤酒日前发布2024年业绩报告，2024年综合营业额为386.35亿元，股东应占溢利47.39亿 元。2025年前2个月啤酒销量同比实现个位数增长。华润啤酒表示对2025年啤酒业务争取营业额增长和 利润恢复较快增长更有信心，整体表现维持审慎乐观预期。花旗指出，中国政府促进消费政策预期可于 今年第二至第三季为餐饮行业带来正面作用，强化了该行对消费板块更为正面的看法，华润啤酒管理层 亦对今年前景感到乐观，表示观察到首两个月消费者信心有所恢复，休闲餐饮场所店内消费趋于稳定。 该行强调百威亚太及华润啤酒都仍是其青睐 ...

Investment Rating - The industry rating is maintained as "Outperform" [7] Core Insights - The food and beverage sector has shown a recovery with a weekly increase of 1.77%, outperforming the Shanghai Composite Index which decreased by 2.22% [25] - The liquor segment is expected to see valuation recovery as major companies focus on channel optimization and marketing strategies ahead of the upcoming political meetings [2][13] - The beer and beverage sectors are anticipated to benefit from improved consumer demand in 2025, driven by promotional policies and a recovery in the restaurant and nightlife sectors [3][14] Summary by Sections Market Performance Review - The food and beverage sector saw a weekly increase of 1.77%, while the Shanghai Composite Index fell by 2.22%. Specific segments included: - Liquor: +1.64% - Dairy: +3.00% - Meat products: +3.52% - Pre-processed foods: +2.37% - Other alcoholic beverages: +0.59% - Beer: +2.84% - Soft drinks: +2.42% - Snacks: +4.30% [25] White Liquor Insights - The white liquor segment increased by 1.64%, with companies like Jiuziyuan and Yingjia Gongjiu showing significant gains. The current valuation is considered reasonable and low, with a PE-TTM of 19.50X [2][13] - Major liquor companies are focusing on channel management and marketing to rebuild confidence in the market, especially as the political meetings approach [2][13] Beer and Beverage Insights - The beer segment increased by 2.84%, with Budweiser Asia announcing a 7% increase in dividends and a management change. The Chinese market for Budweiser is projected to decline by 11.8% in 2024, but strategies are being implemented to enhance market share [3][15] - The beverage sector, including brands like China Red Bull, reported a slight revenue increase of 1.3% in 2024, reaching 21.09 billion yuan [3][17] Consumer Goods Insights - The snack segment led the market with a notable increase, while dairy products also performed well with a 3.00% rise. The report emphasizes three investment themes: "restaurant supply," "overseas expansion," and "raw milk turning point" [3][16] - The overall consumer goods sector is expected to benefit from lower inventory levels and seasonal demand as the market recovers [5][24] Investment Recommendations - Recommended stocks include leading liquor brands such as Moutai, Wuliangye, and Shanxi Fenjiu, as well as consumer goods companies like Yili and Mengniu in the dairy sector [5][24] - The report suggests focusing on companies with strong fundamentals and reasonable valuations, particularly in the consumer goods sector, which is expected to show strong elasticity in 2025 [5][24]

Investment Rating - The report maintains a "Buy" rating for Budweiser APAC with a target price of HK$11.00, reflecting a potential upside of 27% from the current price of HK$8.66 [1][8]. Core Insights - The report indicates that Budweiser APAC's sales during the Chinese New Year were encouraging, with management stating that shipments to retailers matched last year's levels. The company is expected to achieve mid-single-digit volume growth in 2025, with a 3% increase in the Chinese market [6][13]. - A strategic shift has been announced, focusing on the "Core++" segment rather than ultra-premium products, aiming to enhance market share amidst a challenging macroeconomic environment [7][13]. - The company declared a dividend of $0.0566 per share, with a high payout ratio of 96%, which is expected to support long-term investor returns [7][8]. Financial Adjustments - The target price has been adjusted downwards from HK$11.60 to HK$11.00, while the earnings per share (EPS) estimates for 2025 and 2026 have been slightly increased by 0.7% and 1.9% respectively [2][8]. - Revenue forecasts for 2025 and 2026 have been raised by 2.0% and 3.2% respectively, reflecting better-than-expected recovery in beer sales in China [13][14]. - The normalized net profit for 2025 is projected at $887 million, with an adjusted net profit margin of 13.4% [10][14]. Market Performance - Budweiser APAC's stock has shown a 52-week range of HK$14.08 to HK$6.84, with a market capitalization of approximately $14.75 billion [1][8]. - The report highlights that the company's valuation is currently at a forward P/E of 21.1x for 2025, which is one standard deviation below the average of the past three years [15][17]. Strategic Focus - The management emphasizes that the strategic adjustment does not neglect high-end products but rather aims for a more comprehensive approach to current market conditions [7][8]. - The report suggests that the focus on the "Core++" segment will create significant synergies within Budweiser APAC's overall product portfolio [7][8].

Investment Rating - The report maintains an "Accumulate" rating for Budweiser APAC (1876.HK) with a current price of HKD 8.33 [1] Core Views - The report highlights a continued trend of strong performance in the eastern regions while the western regions face challenges, with a dividend payout ratio exceeding expectations [1][8] - Budweiser APAC's 2024 revenue is reported at USD 6.246 billion, reflecting a year-on-year decline of 8.9%, while normalized EBITDA is USD 1.813 billion, down 14.8% year-on-year [5][11] - The company is focusing on high-end and super high-end product strategies, expanding its distribution cities from 220 in 2023 to 235 in 2024 [7][8] Summary by Sections Revenue Performance - For the full year 2024, Budweiser APAC achieved revenue of USD 6.246 billion, with a year-on-year decline of 8.9% and normalized EBITDA of USD 1.813 billion, down 14.8% [5][11] - In Q4 2024, the company reported revenue of USD 1.142 billion, with a year-on-year decline of 11% [5] Regional Performance - Eastern region showed strong growth in Q4 2024 with revenue up 7.8% and volume up 8.5%, while the western region faced a 17% decline in volume [6][7] - The Chinese market continued to struggle in Q4 2024, with a volume decline of 18.9% due to inventory reduction and unfavorable channel mix [7] Management Changes and Dividend Policy - A new CEO, Cheng Yanjun, will take office on April 1, 2025, indicating a commitment to improving the Chinese business [8] - The board proposed a dividend of USD 750 million for the 2024 fiscal year, a 7% increase year-on-year, with a payout ratio of 103% [8] Profit Forecast and Valuation - The profit forecasts for 2025 and 2026 have been revised down to USD 795 million and USD 861 million, respectively, reflecting a 12% and 14% reduction [8][11] - The current stock price corresponds to a PE ratio of 18x for 2025, 16x for 2026, and 15x for 2027, indicating a favorable outlook in the high-end market segment [8][11]

Investment Rating - The report maintains a "Buy" rating for Budweiser APAC (01876.HK) with a target price of HKD 10, while the current price is HKD 8.66 [2][6]. Core Insights - The company reported a total revenue of USD 6.246 billion and normalized EBITDA of USD 1.807 billion for the year 2024, reflecting a year-on-year decline of 7.0% and 6.3% respectively. The normalized net profit attributable to shareholders was USD 778 million, showing a decrease of 15.2% [2][7]. - The fourth quarter results showed revenue and normalized EBITDA of USD 1.142 billion and USD 228 million respectively, with a year-on-year decline of 11.0% and 7.2% [2][7]. - The company plans to distribute a dividend of USD 750 million, which is a 7% increase, resulting in a payout ratio of 103.25% [2]. Financial Performance Summary - For the fiscal year 2024, Budweiser APAC's total sales volume decreased by 8.8%, with a significant decline in the Chinese market, where sales volume and price per ton saw year-on-year declines of 11.8% and 1.4% respectively [6][7]. - The company experienced a mixed performance across regions, with the Asia Pacific West region facing challenges while the Asia Pacific East region showed strong growth, particularly in South Korea [6][7]. - The overall gross margin for 2024 was 50.4%, with a slight year-on-year increase of 0.6 percentage points [6][7]. Future Outlook - Looking ahead to 2025, the company aims to prioritize market share recovery and has implemented significant management changes to drive this strategy. The new leadership is expected to bring renewed energy to the company's operations [6][7]. - The company plans to enhance its product offerings and increase marketing expenditures, particularly in key regions such as Fujian and Guangdong [6][7]. - The projected net profit for 2025 is adjusted to USD 815 million, with a corresponding PE ratio of 18 times [6][7].

Investment Rating - The report downgrades Budweiser APAC to "Hold" with a target price of HKD 9.36, reflecting a potential upside of 8.1% from the current price of HKD 8.66 [1][3]. Core Views - The report indicates that the Chinese beer market is unlikely to see significant improvement in demand until 2025, with sales, revenue, and profit margins expected to remain under pressure in the short term [1]. - The company's strategy to focus on high-end and core++ products may not yield immediate benefits, and the high revenue share from ultra-premium products could negatively impact overall sales performance [1]. - Despite having clear product and channel plans for 2025, the ability to translate these into improved performance remains uncertain [1]. - Following a significant stock price increase, the current valuation (19x 2025 P/E) is considered less attractive [1]. Sales and Market Performance - In Q4 2024, Budweiser APAC's sales in China fell sharply by 18.9% year-on-year, worsening from a decline of 14.8% in Q3 2024 [1]. - The company plans to focus on high-end products, particularly the Budweiser brand, while being more selective in investments in ultra-premium brands [1]. - The shift towards high-end family channels may further tilt the channel structure away from on-premise consumption [1]. Regional Insights - In South Korea, Budweiser APAC recorded high single-digit sales and revenue growth in Q4 2024, with management confident that price increases will drive growth and margin recovery [1]. - The company raised prices for high-end and ultra-premium products by 8.1% in November 2024, which is expected to significantly benefit revenue and profit margins in 2025 [1]. Financial Projections - Revenue for 2025 is projected at USD 6.134 billion, a decrease of 1.8% from 2024, with net profit expected to rise to USD 790 million, reflecting an 8.8% increase [7][16]. - The report anticipates EBITDA margins to recover to pre-pandemic levels in the South Korean market, supported by price increases and operational efficiency improvements [1][2].

Investment Rating - The report assigns a "Buy" rating for Budweiser APAC (1876 HK) with a target price of HKD 9.78, indicating a potential upside of 24.7% from the current price of HKD 7.84 [1][2][6]. Core Insights - The overall performance is led by strong results in the South Korean and Indian markets, with an increase in dividend payout ratio reflecting future operational confidence [2][6]. - For 2024, Budweiser APAC reported a revenue of USD 6.246 billion, a decline of 8.9% year-on-year, with normalized EBITDA at USD 1.807 billion, down 10.7% [6][16]. - The company faced challenges in the China market, with a significant drop in sales and revenue due to increased competition and changing consumer behavior [6][16]. - The Indian market showed robust growth, particularly in the premium segment, achieving nearly 20% growth in high-end products and doubling market share over the past five years [6][16]. - The South Korean market performed exceptionally well, with high single-digit sales growth leading to double-digit revenue growth, driven by product mix optimization and market share expansion [6][16]. - The report maintains a positive long-term growth outlook for Budweiser APAC, particularly as consumer spending recovers in China, supported by strong performance in South Korea [6][16]. Financial Overview - Revenue projections for Budweiser APAC show a recovery trend, with expected revenues of USD 6.563 billion in 2025, growing to USD 7.181 billion by 2027 [5][16]. - Net profit is projected to rebound to USD 837 million in 2025, with a further increase to USD 1.067 billion by 2027 [5][16]. - The company’s dividend yield is expected to remain attractive, with a payout ratio increasing to 96% in 2024, up from 82% in 2023 [6][16]. - The report highlights a significant increase in the number of distribution cities to 235, enhancing market reach and operational efficiency [6][8].

Investment Rating - The report maintains an "Outperform" rating for Budweiser APAC [2] Core Insights - Budweiser APAC reported a revenue of USD 6.246 billion for 2024, a year-on-year decline of 7%. The net profit attributable to shareholders was USD 726 million, down 14.8% year-on-year. The company proposed a dividend increase from 5.29 cents per share in 2023 to 5.66 cents in 2024, totaling USD 750 million, with a payout ratio of 103.25% [7] - The report anticipates a recovery in demand in 2025, contingent on improved conditions in the restaurant and nightlife sectors, which could lead to a rebound in beer sales [7] - The company is focusing on expanding its high-end product offerings and increasing its distribution channels, with the number of cities served growing to 235 by the end of 2024 [7] Financial Data and Profit Forecast - Revenue projections for Budweiser APAC are as follows: - 2023: USD 6.856 billion - 2024: USD 6.246 billion - 2025E: USD 6.665 billion - 2026E: USD 6.971 billion - 2027E: USD 7.191 billion - Net profit forecasts are: - 2023: USD 852 million - 2024: USD 726 million - 2025E: USD 788 million - 2026E: USD 838 million - 2027E: USD 881 million - The report indicates a projected PE ratio of 19 for 2025, 18 for 2026, and 17 for 2027 [6][8]

Financial Data and Key Metrics Changes - In the full year 2024, total Budweiser APAC volumes decreased by 8.8% and revenue decreased by 7%, while revenue per hectoliter grew by 2% [18] - Normalized EBITDA decreased by 6.3%, but the normalized EBITDA margin increased by 21 basis points [18] - Cost of sales increased by 0.7% on a per hectoliter basis, driven by cost management initiatives and commodity tailwinds [19] Business Line Data and Key Metrics Changes - In China, volumes decreased by 11.8% in 2024, with revenue and revenue per hectoliter decreasing by 13% and 14% respectively [19] - In APAC East, volumes increased by 3.6% in the full year, with revenue and revenue per hectoliter increasing by 12% and 8.7% respectively [20] - In South Korea, total market share reached its highest level in over a decade, with significant growth in brands like Kas and Casa [14][19] Market Data and Key Metrics Changes - The business in China faced challenges due to weak consumer sentiment and a decline in on-premise channels [10] - In India, the net revenue of the premium and triple premium portfolio grew by almost 20% in both the fourth quarter and the full year [15] - The in-home channel's volume and revenue contribution increased, reflecting ongoing efforts to premiumize this channel [12] Company Strategy and Development Direction - The company is focused on market share growth in China, with a clear strategy to prioritize Budweiser and adapt to current consumption trends [11][32] - The geographic expansion strategy for the Budweiser brand remains on track, with distribution expanding from 220 cities to 235 cities in 2024 [11] - The company aims to leverage technology to enhance commercial capabilities and drive value creation [13] Management's Comments on Operating Environment and Future Outlook - Management noted a soft consumer environment in China, impacting overall beer market performance [26] - There is confidence in capturing a disproportionate share of category and profit growth in China, despite current challenges [36] - The company plans to continue focusing on premiumization and expanding its distribution network in the in-home channel [99] Other Important Information - The company announced a dividend of $750 million for the full year 2024, representing a 7% increase versus the prior year [21] - The number of carbon-neutral breweries in China doubled to six, with significant reductions in carbon emissions and water usage [16] Q&A Session Summary Question: Recent sales performance in China and inventory management - Management acknowledged a soft consumer environment impacting sales, with proactive inventory management contributing to volume decline [26][29] Question: Strategic focus in China post-management change - The top priority for 2025 is market share growth, with a focus on Budweiser and adapting to current consumption trends [32] Question: Balancing market share recovery with margin and premiumization - The company aims to prioritize market share growth while maintaining long-term margin goals through operational efficiencies and brand mix [45][46] Question: Premiumization strategy and consumer trends - The company has a strong activation plan for Budweiser and is focusing on health and wellness trends with innovations like Zero Sugar [51][52] Question: In-home penetration strategy and challenges - The in-home channel is crucial for growth, with strategies focused on distribution and leveraging partnerships to enhance market presence [99][100] Question: Long-term growth pillars and geographic expansion - Geographic expansion remains a key strategic pillar, with tailored strategies based on market maturity and consumer demand [104]