Revenue and Volume Performance - Revenue decreased by 6.1% to $5,104 million in the first nine months of 2024, with per hectoliter revenue increasing by 2.2%[3] - Total volume decreased by 8.1% to 71,198 million liters, primarily impacted by weak performance in China[6] - In Q3 2024, total volume and revenue decreased by 11.4% and 9.4%, respectively, driven by weak performance in China[11] - Revenue declined by 6.1% in the first nine months of 2024, with revenue per hectoliter increasing by 2.2%, driven by revenue management measures in the Eastern Asia-Pacific region and favorable product mix across the region, partially offset by high base and unfavorable channel mix in China[24] - Total sales volume decreased by 8.1% in the first nine months of 2024 and by 11.4% in Q3 2024, primarily due to a slowdown in China, partially offset by strong performance in Korea[23] - Total volume for the first nine months of 2024 decreased by 8.1% to 71,198 million liters compared to 77,100 million liters in the same period of 2023[38] - Revenue for the first nine months of 2024 declined by 6.1% to $5,104 million from $5,563 million in 2023[38] - Volume in the Asia Pacific West region (including China, India, and Southeast Asia) dropped by 9.4% to 62,054 million liters in the first nine months of 2024[40] - Revenue in the Asia Pacific West region decreased by 10.2% to $4,074 million in the first nine months of 2024[40] - Volume in China for the first nine months of 2024 decreased by 10.6% year-over-year[41] - Revenue in China for the first nine months of 2024 declined by 11.6% year-over-year[41] Profitability and Margins - Normalized EBITDA declined by 6.2% to $1,579 million, with the EBITDA margin decreasing by 4 basis points to 30.9%[4] - Net profit attributable to equity holders decreased to $742 million from $875 million in the same period last year[5] - Normalized EPS decreased to 5.89 cents from 6.65 cents in the first nine months of 2023[8] - Gross margin improved by 108 basis points to 51.4%, driven by revenue and cost management measures[10] - Normalized EBITDA in Q3 2024 decreased by 16.6%, with the EBITDA margin declining by 241 basis points[11] - Normalized operating profit (normalized EBIT) decreased by 9.7% in the first nine months of 2024 and by 23.0% in Q3 2024[21] - Normalized EBITDA decreased by 6.2% in the first nine months of 2024 and by 16.6% in Q3 2024[21] - Normalized EBITDA for the first nine months of 2024 fell by 6.2% to $1,579 million from $1,757 million in 2023[38] - Normalized EBITDA margin for the first nine months of 2024 decreased by 4 basis points to 30.9% from 31.6% in 2023[38] - Normalized EBITDA in the Asia Pacific West region declined by 13.3% to $1,265 million in the first nine months of 2024[40] - Normalized EBITDA in China for the first nine months of 2024 fell by 12.4% year-over-year[41] Cost Management - Cost of sales decreased by 8.1% to $2,478 million, with per hectoliter cost of sales down by 0.1%[7] - Sales cost decreased by 8.1% in the first nine months of 2024, with cost per hectoliter decreasing by 0.1%, while in Q3 2024, sales cost decreased by 10.8%, with cost per hectoliter increasing by 0.7%, driven by cost management measures and favorable commodity prices, partially offset by additional operating costs[25] Regional Performance - South Korea and India continued to show strong performance, with double-digit revenue growth in premium and super-premium categories[9] - In India, Budweiser APAC's premium and super-premium product portfolio achieved double-digit net revenue growth in Q3 2024, contributing to over two-thirds of the company's revenue[18] - In the Asia Pacific East region, Q3 2024 sales volume increased by 3.9%, with revenue and revenue per hectoliter rising by 15.7% and 11.4%, respectively. Normalized EBITDA grew by 33.3%[19] - In South Korea, Budweiser APAC's sales volume increased by mid-single digits in Q3 2024, with revenue growing by mid-teens, driven by strong market share gains in both on-premise and off-premise channels[20] - In South Korea, Budweiser APAC sold over 1.3 million cups of HANMAC Extra Creamy Draft since its launch in May 2024, with Stella Artois achieving double-digit sales growth[20] Product Portfolio and Innovation - Budweiser APAC's premium and super-premium product portfolio contributed approximately two-thirds of the company's revenue in the first nine months of 2024[17] - Budweiser APAC's zero-sugar Harbin Ice Pure draft saw near-doubled sales growth in the first nine months of 2024, expanding its reach and engagement among the legal drinking age (LDA) generation in China[15] Financial Metrics and Reporting - Normalized EBITDA is a key financial metric monitored by management for performance, capital, and funding structure management, standing at $1,579 million in the first nine months of 2024, down from $1,757 million in 2023[31] - Budweiser APAC's financial data is analyzed based on organic growth and normalized figures, excluding currency conversion and scope changes[34] - Normalized EBITDA and EBIT are not accounting measures under IFRS and should not be used as substitutes for profit or cash flow metrics[34] - All performance metrics (EBITDA, EBIT, profit, tax rate, EPS) are presented on a normalized basis, excluding non-underlying items[34] - Financial data is presented in millions of USD, except for volume (hundred thousand liters), organic growth (in % or basis points), and normalized EBITDA margin (%)[37] - Organic growth analysis excludes impacts from acquisitions, divestitures, business creation or termination, and inter-segment transfers[37] Operational Highlights - Budweiser APAC maintained a "low risk" rating from Sustainalytics, ranking 4th among 85 global beer, wine, and spirits companies and 7th among 644 food companies[13] - Budweiser APAC's B2B platform BEES expanded to 306 cities in China, accounting for approximately 70% of the company's net revenue in September 2024[17] - Budweiser APAC operates 47 breweries and employs approximately 24,000 employees across the Asia-Pacific region[35] - The company manages a portfolio of over 50 beer brands, including Budweiser, Corona, and Harbin[35] Non-Recurring Items and Other Income - Other operating income remained flat in the first nine months of 2024 but decreased by 22.2% in Q3 2024 due to reduced government subsidies and incentives[27] - Non-recurring items impacting EBIT included a write-off of historical assets in India and restructuring costs, totaling $39 million in the first nine months of 2024[28] - Normalized profit attributable to equity holders of Budweiser APAC decreased to $777 million in the first nine months of 2024 from $879 million in the same period in 2023[29] - Basic earnings per share (EPS) decreased to 5.62 cents in the first nine months of 2024 from 6.62 cents in the same period in 2023, with normalized basic EPS at 5.89 cents[30]

Financial Performance - Total sales volume decreased by 6.2% to 4,657.3 million liters in the first half of 2024 compared to the same period in 2023[7] - Revenue declined by 4.3% to $3,399 million in H1 2024, with a gross margin improvement of 127 basis points to 51.5%[7] - Normalized EBITDA decreased by 1.0% to $1,100 million, with EBITDA margin expanding by 109 basis points to 32.4%[7] - Normalized profit attributable to equity holders of Budweiser APAC decreased to $552 million in H1 2024[7] - Normalized EPS decreased to 4.19 cents in H1 2024 from 4.38 cents in H1 2023[7] - Total volume decreased by 6.2% in the first half of 2024, with revenue down by 4.3%, primarily due to high base effects in China and industry slowdown[8][17] - Normalized EBITDA declined by 1.0% in H1 2024, while EBITDA margin expanded by 109 basis points to 32.4%[8] - Net profit attributable to equity holders decreased from $575 million in H1 2023 to $541 million in H1 2024[21] - Normalized EBIT decreased by 3.2% in H1 2024[20] - Revenue for the six months ended June 30, 2024, was $3.399 billion, a decrease of 7.3% compared to $3.666 billion in the same period in 2023[112] - Gross profit for the period was $1.751 billion, down 6.2% from $1.867 billion in 2023[112] - Operating profit before non-underlying items was $776 million, a decrease of 8.7% from $850 million in the previous year[112] - Net profit attributable to equity holders of Budweiser APAC was $541 million, down 5.9% from $575 million in 2023[112] - Basic earnings per share decreased to 4.10 cents from 4.35 cents in the prior year[112] - Total comprehensive income for the period was $179 million, compared to $93 million in 2023[113] - Net profit for the period was $553 million, compared to $590 million in the same period last year[116] - Total revenue for the first half of 2024 was $3.399 billion, a decrease from $3.666 billion in the same period of 2023[140] - Normalized EBITDA for the first half of 2024 was $1.100 billion, down from $1.173 billion in 2023, with a normalized EBITDA margin of 32.4% compared to 32.0% in 2023[140] - Volume sales in the first half of 2024 were 46.573 million hectoliters, a decline from 49.456 million hectoliters in 2023[140] - The company reported a net profit of $553 million for the first half of 2024, compared to $590 million in 2023[140] - Total income tax expense for the six months ended June 30, 2024, was $242 million, compared to $273 million in the same period in 2023, with an effective tax rate of 31.0% in 2024 and 32.2% in 2023[144] - Basic earnings per share decreased from 4.35 cents to 4.10 cents, while diluted earnings per share decreased from 4.33 cents to 4.07 cents[174] - Normalized basic earnings per share decreased slightly from 4.38 cents to 4.19 cents, and normalized diluted earnings per share decreased from 4.36 cents to 4.16 cents[175] Regional Performance - In China, Budweiser 0.0 was launched nationwide, and the "SPORTS, NOW IS OUR PARTY" summer campaign drove growth[4] - In South Korea, market share growth and cost efficiency measures led to double-digit revenue and profit growth[4] - In India, the premium and super-premium portfolio achieved double-digit growth, accounting for over two-thirds of revenue[4] - China's volume decreased by 8.5% in H1 2024 due to high base effects, industry slowdown, and adverse weather, but EBITDA margin returned to pre-pandemic levels[9][12] - South Korea outperformed the industry with double-digit revenue and profit growth, driven by market share gains and cost efficiency measures[9][16] - India's premium and super-premium portfolio achieved double-digit growth, contributing over two-thirds of revenue[9][14] - APAC East region saw a 43.1% increase in normalized EBITDA in H1 2024, with EBITDA margin expanding by 633 basis points[15] - The Asia Pacific East region (primarily Korea, Japan, and New Zealand) reported revenue of $649 million in 2024, up from $593 million in 2023, with a normalized EBITDA margin increase to 30.7% from 24.3%[140] - The Asia Pacific West region (including China, India, Vietnam, and export markets) saw revenue decline to $2.750 billion in 2024 from $3.073 billion in 2023, with a normalized EBITDA margin of 32.8% compared to 33.5% in 2023[140] Sustainability and Environmental Efforts - The company reduced water usage in beer production to 1.86 hectoliters per hectoliter, a 38% reduction from the 2017 baseline[5] - The company was included in the S&P Global Sustainability Yearbook (China Edition) 2024 for its sustainability efforts[5] Financial Position and Cash Flow - Net cash position stood at $2.4 billion as of June 30, 2024, reflecting strong financial discipline[10] - Cash and cash equivalents decreased from $3,141 million as of December 31, 2023, to $2,406 million as of June 30, 2024[27] - Cash flow from operating activities decreased significantly from $762 million in H1 2023 to $223 million in H1 2024, mainly due to reduced operating cash and changes in working capital[27] - Cash flow used in investing activities increased to $250 million in H1 2024 from $223 million in H1 2023, driven by higher cash pool deposits to the Budweiser Group[28] - Cash flow used in financing activities increased by $175 million to $645 million in H1 2024, primarily due to higher dividend payments[29] - Total debt increased to $432 million as of June 30, 2024, from $351 million as of December 31, 2023, with $344 million due within one year[31][32] - Cash (net of debt) to normalized EBITDA ratio increased from 1.8x in H1 2023 to 1.9x in H1 2024, driven by a decrease in normalized EBITDA from $1,173 million to $1,100 million[34] - The company's net current liabilities stood at $344 million, reflecting its operational cash flow management strategy[123] - Operating cash flow for the six months ended June 30, 2024, was $223 million, supporting the company's liquidity needs[123] - Available committed and uncommitted financing facilities totaled $500 million and $599 million, respectively, as of June 30, 2024[123] - Cash (net of debt) decreased to $2,084 million from $2,835 million at the end of 2023, with a debt-to-equity ratio of -25.2%[126][127] - The company's total equity was $10,357 million as of June 30, 2024, compared to $10,850 million at the end of 2023[127] - Capital expenditures and investments in subsidiaries remain key cash requirements for the company[123] - The company paid a final dividend of 5.29 cents per share for the 2023 fiscal year, totaling $698 million, representing 82% of the profit attributable to equity holders[155] - Total comprehensive loss as of June 30, 2024 was $1,499 million, compared to $1,390 million in the same period last year[157] - Total interest-bearing loans and borrowings were $323 million as of June 30, 2024, down from $331 million as of December 31, 2023[159] - The company received $15 million in loan proceeds in the first half of 2024, compared to $80 million in the same period last year[159] - Trade payables and accruals decreased to $1,861 million as of June 30, 2024, from $1,997 million as of December 31, 2023[164] - Payables to Anheuser-Busch InBev decreased to $80 million as of June 30, 2024, from $104 million as of December 31, 2023[165] - Trade receivables and payables to Budweiser Group decreased from $2,101 million to $1,941 million, with overdue amounts showing a significant reduction, especially in the over 90 days category from $31 million to $11 million[166] - Contract liabilities decreased from $1,096 million to $730 million, while entrusted packaging increased from $360 million to $400 million, resulting in a combined decrease from $1,456 million to $1,130 million[167] - Collateral provided for own liabilities decreased slightly from $120 million to $115 million, while commitments for purchasing property, plant, and equipment increased from $116 million to $139 million[169] - Sales of finished goods to Budweiser Group increased significantly from $4 million to $20 million, while purchases remained stable at $17 million[170] - Cash pool deposits with Budweiser Group increased from $25 million to $89 million, and cash pool loans from Budweiser Group were $88 million as of June 30, 2024[171] - Provisions decreased from $167 million to $103 million, with $56 million related to a tax assessment in Korea being paid in January 2024[173] Shareholder and Compensation Plans - The company’s compensation structure includes performance-based bonuses tied to financial (e.g., EBITDA, net revenue) and non-financial (e.g., sustainability, compliance) KPIs[44] - The company’s share incentive plans, including the Long-Term Incentive Plan and Restricted Share Unit Plan, hold 55,559,035 shares in trust as of June 30, 2024[45] - The company’s share incentive plans aim to align employee interests with shareholders and retain top talent in the Asia-Pacific region[45] - The company’s compensation committee reviews and sets performance targets for senior management, including financial and non-financial KPIs[44] - The long-term incentive plan will be effective for a period of ten years starting from May 8, 2023, unless terminated earlier by the company[52] - The restricted share unit plan will also be effective for a period of ten years starting from May 8, 2023, unless terminated earlier by the company[58] - The employee betting plan will be effective for a period of ten years starting from May 8, 2023, unless terminated earlier by the company[64] - The exercise price of stock options under the long-term incentive plan is determined by the board and will not be lower than the highest of: (i) the closing price on the grant date, (ii) the average closing price over the five trading days prior to the grant date, or (iii) the par value of the shares[51] - The purchase price of restricted share units under the restricted share unit plan is determined by the board and will not be lower than the highest of: (i) the closing price on the grant date, (ii) the average closing price over the five trading days prior to the grant date, or (iii) the par value of the shares[57] - The purchase price of restricted share units or restricted shares under the employee betting plan is determined by the board and will not be lower than the highest of: (i) the closing price on the grant date, (ii) the average closing price over the five trading days prior to the grant date, or (iii) the par value of the shares[63] - No payment is required at the time of application or acceptance of stock options under the long-term incentive plan, and there are no specified deadlines for payment or repayment of loans used for such purposes[50] - No payment is required at the time of application or acceptance of restricted share units under the restricted share unit plan, and there are no specified deadlines for payment or repayment of loans used for such purposes[56] - No payment is required at the time of application or acceptance of restricted share units or restricted shares under the employee betting plan, and there are no specified deadlines for payment or repayment of loans used for such purposes[62] - The share-based compensation plan allows participants to receive bonuses in the form of cash, restricted shares, or a combination of both, with additional "matching" restricted share units provided as an incentive[65] - The company's share-based compensation plan allows vested restricted share units and issued shares to be traded at any time within the applicable period determined by the Board, subject to certain restrictions and terms[68] - The purchase price for restricted share units or restricted shares under the share-based compensation plan is determined by the Board and will not be lower than the highest of: (i) the closing price on the grant date, (ii) the average closing price over the five trading days preceding the grant date, or (iii) the nominal value of the shares[70] - The share-based compensation plan will remain effective for ten years starting from May 8, 2023, unless terminated earlier by the company[71] - The new restricted share unit plan allows the Board to grant restricted share units to employees and directors who have contributed or will contribute to the group[72] - The maximum number of shares each participant can receive under the new restricted share unit plan is subject to any limits set by the amended and effective listing rules[73] - Vested restricted share units under the new plan can be traded at any time within the applicable period determined by the Board, subject to certain restrictions and terms[74] - The purchase price for restricted share units under the new plan is determined by the Board and will not be lower than the highest of: (i) the closing price on the grant date, (ii) the average closing price over the five trading days preceding the grant date, or (iii) the nominal value of the shares[76] - The new restricted share unit plan will remain effective for ten years starting from May 8, 2023, unless terminated earlier by the company[77] - As of June 30, 2024, Mr. Yang Ke holds 15,289,898 unexercised share options, and the five highest-paid individuals hold a total of 31,226,484 unexercised share options[79] - 508,297 share options held by other eligible employees were canceled during the six months ended June 30, 2024, with exercise prices of HK$23.2 and HK$28.34[79] - Yang Ke holds 7,462,588 restricted share units under the Restricted Share Unit Plan as of January 1, 2024, with an additional 350,063 units granted by June 30, 2024, totaling 7,812,651 units[81] - Yang Ke also holds 4,370,603 restricted share units under the New Restricted Share Unit Plan, with an additional 6,090 units granted by June 30, 2024, totaling 4,376,693 units[81] - The five highest-paid individuals collectively hold 29,038,658 restricted share units as of January 1, 2024, with an additional 3,086,968 units granted by June 30, 2024, totaling 31,891,760 units[81] - Other eligible employees hold 62,117,170 restricted share units as of January 1, 2024, with an additional 6,661,634 units granted by June 30, 2024, totaling 68,467,512 units[81] - The restricted share units granted under the Restricted Share Unit Plan, New Restricted Share Unit Plan, Share-based Compensation Plan, and Employee Betting Plan have a purchase price of zero[82] - Restricted share units granted under the Restricted Share Unit Plan will vest on the third and/or fifth anniversary of the grant date[82] - Restricted share units granted under the New Restricted Share Unit Plan will vest on the third and/or fifth anniversary of the grant date[82] - Restricted share units granted under the Share-based Compensation Plan will vest on the third and/or fifth anniversary of the grant date[82] - Restricted share units granted under the Employee Betting Plan will vest on the fifth anniversary of the grant date[82] - The company has made adjustments and forfeitures to the number of share awards held by employees due to updates in internal record-keeping mechanisms and procedures[83] - The maximum number of shares that can be granted under the long-term incentive plan, restricted share unit plan, new restricted share unit plan, employee betting plan, and share-based compensation plan is 10% of the total issued shares of the company as of the listing date or the date of approval of the updated limit (1,324,339,700 shares as of May 8, 2023)[85] - As of January 1, 2024, the total number of share awards that can be granted under the share incentive plan is 1,168,469,631 shares, representing 8.82% of the company's issued share capital[85] - As of June 30, 2024, the total number of share awards that can be granted under the share incentive plan is 1,164,758,826 shares, representing approximately 8.80% of the company's issued share capital[85] - The total number of shares that can be issued upon the exercise or vesting of all outstanding share awards under the share incentive plan is 159,580,874 shares, representing 1.20% of the company's issued share capital as of June 30, 2024[85] - Mr. Yang Ke, a director and senior executive, holds 1,209,277 shares of the company, with 1,028,665 shares being restricted shares under the relevant share incentive plan[87] - Mr. Yang Ke holds 42,344 shares of Budweiser Group (an associated company), with 2,331 shares being restricted shares under the relevant plan of Budweiser Group[89] - Mr. Yang Ke holds 365,009 shares of Ambev (an associated company), with 347,103 shares being conditional stock options that may be delivered upon exercise[90] - The Securities and Futures Commission has granted partial exemptions to non-executive directors from strict compliance with certain disclosure

Investment Rating - The report maintains an "Outperform" rating for Budweiser APAC [5] Core Views - Budweiser APAC reported a 4.3% year-on-year decline in revenue for H1 2024, amounting to $3.399 billion, and a 6% decrease in profit attributable to equity holders, totaling $541 million [5] - The company faces pressure in the Chinese beer market due to increased competition in the mid-tier segment and a challenging demand environment, leading to a downward revision of profit forecasts for 2024-2026 [5][6] - Despite short-term challenges, Budweiser APAC's strong brand presence in high-end dining and nightlife channels positions it well for long-term growth, supported by an increase in channel coverage and the introduction of more premium products [5] Summary by Sections Market Data - Closing price (HKD): 9.58 - H-share market capitalization: 126.872 billion HKD - 52-week high/low (HKD): 18.30/8.68 [2] Financial Performance - For H1 2024, Budweiser APAC's normalized EBITDA margin improved to 32% from the previous year, driven by a decrease in raw material costs [6] - The company’s sales volume in Q2 2024 decreased by 7.3%, with a price per ton decline of 0.5% in the Chinese market [6] - The company’s revenue projections for 2024-2026 are $6.694 billion, $6.968 billion, and $7.177 billion respectively, with corresponding net profits of $900 million, $968 million, and $1.019 billion [7][8] Profitability Metrics - The gross margin for H1 2024 was reported at 51.5%, reflecting an increase due to lower commodity prices [6] - The company’s net profit margin is projected to stabilize around 8% for the next few years, with a PE ratio of 18 for 2024 [7][8]

Investment Rating - Maintain NEUTRAL rating with a target price of HK$10.10 [3] Core Views - H1 revenue declined by 4.3% YoY, primarily due to weak Q2 sales in China [4] - Volume and revenue per hl in South Korea and India showed growth, contributing to margin expansion [4] - Cost reductions and premiumization strategies are expected to sustain margin improvements [4] Financial Performance - H1 sales volume decreased by 6.2% YoY to 46.6 million hl, with revenue down 7.3% YoY to $3.39bn [4] - Normalized EBITDA fell by 6.2% YoY to $1.10bn, with a margin improvement of 1.1pct to 32.4% [4] - Q2 sales volume dropped by 7.0% YoY to 25.5 million hl, with revenue down 10.6% YoY to $1.76bn [4] Regional Performance - APAC West (China): Q2 sales volume and revenue per hl declined by 10.3% and 5.4% YoY, respectively, due to industry weakness and adverse weather conditions [4] - APAC East (South Korea): Q2 revenue and profit grew by double digits, with market share recovering to 2018 levels [4] - India: Premium and above products achieved double-digit growth, capturing 2/3 of the premium market share [4] Cost and Margin Trends - Cost per hl decreased by 0.6% YoY, driven by lower commodity prices, contributing to a gross margin increase of 0.6pct to 51.5% [4] - SG&A expense ratio rose by 1.2pct YoY to 30.3%, due to declining revenue [4] Earnings Forecast - EPS forecasts for 2024-26 were revised downward to HK$0.53, HK$0.56, and HK$0.60, respectively [4] - The company is expected to benefit from continued premiumization in the Asia-Pacific region [4] Valuation - The target price of HK$10.10 is based on a 19x PE multiple for 2024, down from the previous 22x [4]

Investment Rating - Maintain "Overweight" rating [6] Core Views - Eastern region shows strong growth momentum, partially offsetting pressure in the Chinese market [2] - Western region faces increased pressure in Q2 2024 [6] - Beer raw material cost pressures are gradually easing, with potential profit improvement under a low base [8] Performance Summary Revenue and EBITDA - 24H1 revenue: USD 3,399 million, organic growth -4.3% [6] - 24H1 EBITDA: USD 1,100 million, organic growth -1.0% [6] - 24Q2 revenue: USD 1,756 million, organic growth -7.8% [6] - 24Q2 EBITDA: USD 528 million, organic growth -6.2% [6] Volume and Price - 24H1 volume: 4,657,300 tons, -6.2% YoY [6] - 24Q2 volume: 2,545,800 tons, -7.3% YoY [6] - 24H1 price per ton: +2.0% YoY [6] - 24Q2 price per ton: -0.5% YoY [6] Regional Performance - Asia West: 24Q2 revenue -13.2%, EBITDA -16.3%, volume -9.0%, price per ton -4.6% [6] - Asia East: 24Q2 revenue +21.2%, EBITDA +69.6%, volume +6.0%, price per ton +14.4% [6] - China: 24H1 revenue -9.4%, EBITDA -8.3%, volume -8.5%, price per ton -1.0% [7] Cost and Profit - 24H1 cost per hectoliter: -0.6% [8] - 24H1 gross margin: 51.5%, +1.27 ppts YoY [6] - 24Q2 gross margin: 51.5%, +0.57 ppts YoY [6] Financial Forecast Revenue and Profit - 2024E revenue: USD 6,873 million, +0.3% YoY [9] - 2025E revenue: USD 7,313 million, +6.4% YoY [9] - 2026E revenue: USD 7,754 million, +6.0% YoY [9] - 2024E net profit: USD 936 million, +9.9% YoY [9] - 2025E net profit: USD 1,039 million, +10.9% YoY [9] - 2026E net profit: USD 1,144 million, +10.2% YoY [9] Valuation - 2024E PE: 17x [9] - 2025E PE: 15x [9] - 2026E PE: 14x [9] Market Data - Total shares: 13,243 million [3] - Market cap: HKD 124,355 million [3] - 1-year low/high: HKD 8.68/18.34 [3] - 3-month turnover rate: 7.22% [3] Related Reports - High base pressure in the western market, structural upgrades progressing smoothly—Budweiser APAC (1876.HK) 2024 Q1 earnings review (2024-05-09) [5] - Smooth structural upgrades in China, Korean tariff audit fees drag down after-tax profit—Budweiser APAC (1876.HK) 2023 annual report review (2024-03-01) [5]

Investment Rating - The report maintains a rating of "Buy" for Budweiser APAC (1876.HK) [2] Core Views - The company reported a revenue of USD 3.399 billion for the first half of 2024, with an organic year-on-year decline of 4.3%. EBITDA was USD 1.1 billion, reflecting a 1.0% organic decline [6] - Strong growth in the Eastern region partially offsets pressures in the Chinese market, with Q2 revenue in the Eastern region increasing by 21.2% year-on-year [6][7] - The company continues to push its premiumization strategy, leading to an increase in average selling price despite a decline in sales volume [6][8] Financial Performance - For the first half of 2024, the company achieved a sales volume of 465.73 thousand tons, down 6.2% year-on-year, while the average price per ton increased by 2.0% [6] - The gross margin for the first half of 2024 was 51.5%, an improvement of 1.27 percentage points year-on-year, driven by cost management and declining commodity prices [6] - The company expects further improvement in profitability in the second half of 2024 due to easing raw material cost pressures [8] Regional Performance - In the Western Asia region, Q2 revenue and EBITDA declined by 13.2% and 16.3% year-on-year, respectively, with sales volume down 9.0% [6] - In the Eastern Asia region, Q2 revenue and EBITDA increased by 21.2% and 69.6% year-on-year, respectively, with sales volume up 6.0% [6][7] Earnings Forecast and Valuation - The report revises down the net profit forecast for 2024-2026 to USD 936 million, USD 1.039 billion, and USD 1.144 billion, respectively, reflecting a decrease of 10%, 12%, and 13% [8] - The current stock price corresponds to a P/E ratio of 17x for 2024, 15x for 2025, and 14x for 2026 [8]

Investment Rating - The report assigns a "Buy" rating to Budweiser APAC (1876 HK) with a target price of HKD 11.2, representing a potential upside of 19.1% from the current price of HKD 9.4 [2] Core Views - Despite a significant decline in 2Q24 performance in China due to unfavorable factors, the long-term premiumization trend in the Chinese market remains intact, with expected improvement in volume and price performance in 2H24 due to a low base [1] - Korea's 2Q24 organic revenue and normalized EBITDA showed strong growth, expected to continue in 3Q24 [1] - Budweiser APAC's 1H24 organic cost per ton decreased by 0.6% YoY, leading to a 127bps expansion in organic gross margin, with this trend expected to continue in 2H24 due to a 12-month price lock-in mechanism [1] - The company's flexible cost control measures are expected to keep the full-year expense ratio stable YoY, with normalized EBITDA likely to return to positive growth in 2H24 [1] China Market Analysis - 2Q24 organic revenue in China declined by 15.2% YoY, with volume and organic price per ton down by 10.3% and 5.4% respectively [1] - China's normalized EBITDA fell by 17.2% YoY, slightly higher than the revenue decline, reflecting the company's operational efficiency and cost control flexibility [1] - In 3Q24, volume decline in China is expected to narrow significantly due to improved weather during the peak season and a low base, with price per ton likely to return to positive growth as premium and above products recover [1] - Long-term growth potential lies in expanding distribution channels for premium and above products through the BEES platform and increasing market share in non-on-premise channels [1] Korea Market Analysis - Korea's 2Q24 volume grew by mid-single digits, with price per ton expanding by mid-teens, driving high-teens revenue growth [1] - APAC East's normalized EBITDA surged by 69.6% YoY, with normalized EBITDA margin expanding by 899bps [1] - The strong performance is attributed to a low base from the April 2023 tax hike, two price increases in 2023, improved channel and brand structure, cost control, and lower raw material prices [1] - Market share increased in both on-premise and non-on-premise channels in 2Q24, with continued strong growth expected in 3Q24 if no further tax hikes occur [1] Financial Performance and Forecast - 1H24 revenue declined by 7% YoY to USD 3,399 million, with volume down 6% and price per ton down 2% [8] - Gross margin improved to 51.5% in 1H24 from 50.9% in 1H23, driven by cost control measures [8] - Normalized EBITDA for 1H24 was USD 1,100 million, down 6% YoY, with a margin of 32.4% [8] - Full-year 2024 revenue is forecasted at USD 6,670 million, down 2.7% YoY, with normalized EBITDA expected to grow by 1% to USD 2,049 million [9] - Net profit attributable to shareholders is projected to increase by 2.6% to USD 874 million in 2024, with a net margin of 13.1% [9] Valuation - The SOTP valuation based on 2024E EBITDA suggests a target EV/EBITDA multiple of 8.0x, implying a target price of HKD 11.2 [11] - APAC East and APAC West are valued at EV/EBITDA multiples of 4.0x and 9.0x respectively [11]

Investment Rating - The report maintains a "Buy" rating for Budweiser APAC (01876.HK) with a target price of HKD 13.5 [1][2]. Core Insights - The report highlights that Budweiser APAC faced significant sales pressure in China during Q2 2024 due to adverse weather, weak consumer demand, and high base effects from the previous year. However, strong performance in South Korea and India helped mitigate some of these challenges [2][3]. - The company achieved total revenue of USD 3.4 billion in H1 2024, with a normalized EBITDA of USD 1.1 billion, reflecting a year-on-year decline of 6.2% and 4.3% respectively [1][2]. - The report anticipates a slight improvement in performance in H2 2024 due to lower base effects and ongoing strong growth in South Korea and India, despite continued challenges in the Chinese market [2][3]. Financial Summary - For H1 2024, Budweiser APAC reported total revenue of USD 3.4 billion, with a year-on-year decline of 7.3% [1]. - The normalized EBITDA for the same period was USD 1.1 billion, down 6.2% year-on-year [1]. - The normalized net profit attributable to shareholders was USD 550 million, a decrease of 4.7% year-on-year [1]. - In Q2 2024, total revenue was USD 1.756 billion, with a year-on-year decline of 10.6% [1][2]. - The normalized EBITDA for Q2 was USD 530 million, reflecting a year-on-year decline of 11.0% [1][2]. - The normalized net profit for Q2 was USD 250 million, down 8.6% year-on-year [1][2]. Regional Performance - In the Asia Pacific West region, Q2 sales in China faced significant pressure, with a year-on-year decline in both volume and price [2]. - Conversely, the Asia Pacific East region showed strong sales growth, with a 6.0% increase in volume and a 14.4% increase in price, leading to a substantial recovery in profitability [2]. - The report notes that the strong performance in India and South Korea contributed significantly to overall revenue, with the P&SP combination in India achieving double-digit growth [2]. Future Outlook - The report suggests that the operational pressure in China may ease in H2 2024 due to lower base effects and strategic initiatives to adapt to the new market conditions [2][3]. - The adjusted net profit forecasts for 2024-2026 are USD 920 million, USD 990 million, and USD 1.05 billion respectively, with corresponding PE ratios of 17, 16, and 15 [1][2].

百威亚太1H24业绩会纪要 日期：2024年8月1日 Bloomberg generated summary： Guidance The company expressed confidence in its strategy and expects to deliver stronger resultsin the medium and long term. The company mentioned that it expects the level of commercial investment as a percent ofnet revenue to be relatively stable versus last year and prior years, at a national level. Margin Story Normalized EBITDA margin increased by 109 basis points, driven by gross marginexpansion. Gross profit margin expansion contributed to a 10 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性 亦不發表任何聲明，並明確表示概不就因本公告全部或任何部份內容而產生或因倚賴該等內容而引致的 任何損失承擔任何責任。 Budweiser Brewing Company APAC Limited 百威亞太控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1876） 截至2024年6月30日止六個月的 未經審核中期業績 及 2024年第二季度財務資料 百威亞太控股有限公司（「百威亞太」或「本公司」，連同其附屬公司為「本集團」）的董事 會（「董事會」）宣佈本公告隨附本集團截至2024年6月30日止六個月的未經審核業績。 董事會謹此提醒股東及潛在投資者，截至2024年6月30日止六個月的未經審核業績乃根 據本集團內部紀錄及管理賬目所編製，已經獨立核數師審閱但未經審核。 股東及潛在投資者買賣本公司證券時不應過份依賴未經審核業績並須謹慎行事。 承董事會命 百威亞太控股有限公司 聯席公司秘書 華百恩 香港，2024年8月1日 於本公告日期，本公司董事會包括聯席主席兼執行董事楊克先生、聯席主席兼非執行董事鄧明 瀟先生（Joh ...