Investment Rating - The report maintains a "Buy" rating for Budweiser APAC (1876 HK) with a target price of HK$11.60, reflecting a potential upside of 61% from the current price of HK$7.19 [2][4][9]. Core Insights - The report highlights ongoing challenges in the Chinese market due to macroeconomic factors, high inventory levels, and a shift in channel dynamics, which negatively impacted sales and pricing [8][9]. - Despite strong sales momentum in the South Korean market, price increases are expected to contribute less to revenue growth moving forward [8]. - The report projects a significant decline in normalized EBITDA for Q4 2024, estimating a year-on-year decrease of 25.8% due to reduced sales and rising costs [9][13]. Summary by Sections Financial Performance - Revenue for 2024 is estimated at US$6,280 million, down from US$6,305 million previously, reflecting a 0.4% decrease [14]. - Adjusted net profit for 2024 is projected at US$784 million, a reduction of 6.5% from the previous estimate of US$839 million [14]. - The report anticipates a normalized EBITDA margin decline due to increased costs and lower sales volumes, particularly in the Chinese market [9][13]. Market Analysis - The Chinese market continues to face challenges from a high base effect and weak consumer demand, leading to a projected decline in sales volume [8][9]. - The South Korean market has shown resilience with strong sales, but the impact of price increases is expected to diminish [8]. - The report emphasizes the need for Budweiser APAC to navigate these market dynamics effectively to maintain profitability [9]. Valuation - The target price of HK$11.60 is based on a P/E ratio of 22.4 times the estimated earnings for 2025, which is below the historical average [15]. - The current valuation is considered attractive, with a projected dividend yield of 5.4% for 2025 [15]. - The report suggests that Budweiser APAC's valuation remains compelling compared to its peers in the industry [22].

Investment Rating - The report maintains a **Buy** rating for Budweiser APAC (1876 HK) with a target price of HKD 9.39, representing a potential upside of 27.3% [1][4] Core Views - Short-term performance is pressured by challenges in the China market, but the company's long-term competitive strength remains intact [1] - The company's premium/super-premium product portfolio in China is expected to rebound as consumer spending recovers [1] - In Korea, the company has enhanced its competitiveness through increased investment and new product launches, with an 8.1% price increase on premium/super-premium products expected to boost profitability in 2025 [1] Regional Performance Asia Pacific West (China, India, Vietnam) - China market: Q3 2024 volume declined by 14.2%, average selling price (ASP) fell by 2.1%, leading to a 16.1% revenue drop [2] - India market: Continued strong growth with double-digit increases in premium/super-premium products, which account for 2/3 of India's revenue [2] - Overall APAC West: Volume and ASP declined by 13.5% and 1.9% respectively in Q3 2024 [2] Asia Pacific East (Korea, Japan, New Zealand) - Korea market: Revenue grew by mid-teens in Q3 2024, driven by mid-single-digit volume growth and product mix optimization [2] - Overall APAC East: Volume and ASP increased by 3.9% and 11.4% respectively in Q3 2024 [2] Financial Performance - Q3 2024 revenue: USD 1.705 billion, down 9.4% YoY [3] - Q3 2024 normalized EBITDA: USD 479 million, down 16.6% YoY [3] - Q3 2024 net profit: Down 25.0% YoY [3] - 9M 2024 revenue: USD 5.104 billion, down 6.1% YoY [3] - 9M 2024 normalized EBITDA: USD 1.579 billion, down 6.2% YoY [3] - 9M 2024 net profit: USD 777 million, down 11.6% YoY [3] Financial Forecasts - 2024E revenue: USD 6.531 billion, down 4.7% YoY [7] - 2025E revenue: USD 6.740 billion, up 3.2% YoY [7] - 2026E revenue: USD 7.000 billion, up 3.9% YoY [7] - 2024E net profit: USD 751 million, down 11.7% YoY [7] - 2025E net profit: USD 830 million, up 10.5% YoY [7] - 2026E net profit: USD 924 million, up 11.3% YoY [7] Valuation Metrics - 2025E P/E: 19x (down from 22x average for 2024-25) [1] - 2024E P/E: 16.6x [7] - 2025E P/E: 15.0x [7] - 2026E P/E: 13.5x [7] Market Position - The company continues to gain market share in Korea through expansion in both on-premise and off-premise channels [2] - New product launches (e.g., Cass, HANMAC) in Korea have received positive market feedback [2]

Industry and Company * **Company**: Budweiser Brewing Company, AIPAC Ltd. * **Industry**: Beer and beverage industry, specifically focusing on premium and super-premium segments. Core Views and Arguments * **Performance Impact**: The first nine months of 2024 were impacted by industry weakness in China, partially offset by strong performance in South Korea and India. * **Market Share Gains**: Continued commercial momentum in South Korea and India drove sustained market share gains and revenue per hectolitre growth. * **Premiumization**: The company is leading the premiumization of the beer category, with premium and super-premium portfolio contributing approximately two-thirds of revenue. * **Innovation**: Volume and revenue contribution from innovations within the Budweiser family, including Supreme and Magnum, continue to increase. * **Channel Expansion**: Revenue contribution from the in-home channel grew as a result of ongoing efforts to premiumize the channel. * **Geographic Expansion**: The company's geographic expansion strategy for the Budweiser brands is on track. * **Sustainability**: The company has made progress in sustainability initiatives, maintaining a low-risk rating from Sustainalytics. Key Financials * **Total Volumes**: Decreased by 8.1% * **Revenue**: Decreased by 6.1% * **Revenue per Hectolitre**: Grew by 2.2% * **Normalized EBITDA**: Decreased by 6.2% * **Normalized EBITDA Margin**: Decreased by four basis points * **Gross Profit Margin**: Expanded by 108 basis points * **Cost of Sales**: Decreased by 8.1% China Market * **Performance**: Impacted by a soft industry, particularly from continued weakness in on-premise channels. * **Premiumization**: Leading the premiumization of the beer category, with premium and super-premium portfolio contributing approximately two-thirds of revenue. * **Innovation**: Volume and revenue contribution from innovations within the Budweiser family, including Supreme and Magnum, continue to increase. * **Channel Expansion**: Revenue contribution from the in-home channel grew as a result of ongoing efforts to premiumize the channel. * **Geographic Expansion**: The company's geographic expansion strategy for the Budweiser brands is on track. * **Sustainability**: The company has made progress in sustainability initiatives, maintaining a low-risk rating from Sustainalytics. South Korea Market * **Performance**: Revenues grew by mid-teens in the third quarter, driven by double-digit revenue per hectolitre increase and single-digit volume growth. * **Market Share**: Achieved a strong overall total market share gain, supported by share gains in both the on-premise and in-home channels, led by KAS. * **Innovation**: Further expanded Cast Light Zero Sugar in the third quarter with a campaign featuring South Korean Olympic fencing gold medalist Oh Sang-Wook. * **Geographic Expansion**: The company's geographic expansion strategy for the Budweiser brands is on track. * **Sustainability**: The company has made progress in sustainability initiatives, maintaining a low-risk rating from Sustainalytics. India Market * **Performance**: Business continued to outgrow the industry for the first nine months of the year, driven by double-digit net revenue growth within the premium and super-premium portfolio. * **Premiumization**: Premium and super-premium segments contributed more than two-thirds of revenue. * **Innovation**: The company has made progress in sustainability initiatives, maintaining a low-risk rating from Sustainalytics. Sustainability * **Sustainalytics Rating**: Maintained a low-risk rating from Sustainalytics, ranking 4th among 85 beer, wine and spirits companies and 7th out of 644 food products companies worldwide. * **Global Beer Responsible Day**: Kicked off campaigns across key markets to celebrate a Global Beer Responsible Day to promote smart drinking. * **Commitment**: A commitment the company has been championing for 17 years, in partnership with government and industry stakeholders. Future Outlook * **Premiumization**: The company remains committed to premiumization, with a focus on expanding its premium and super-premium portfolio. * **Geographic Expansion**: The company continues to expand its geographic footprint, targeting lower-tier cities and regions with high growth potential. * **Digitization**: The company is investing in digitization and system integration to improve processes and management visibility. * **Cost Management**: The company remains focused on cost management initiatives to improve efficiency and profitability.

Investment Rating - The report maintains a "Buy" rating for Budweiser APAC (1876.HK) [4] Core Insights - Budweiser APAC reported a revenue of $5.104 billion for the first three quarters of 2024, with a year-on-year decline of 6.1% [1] - EBITDA for the same period was $1.579 billion, also reflecting a year-on-year decrease of 6.2% [1] - In Q3 2024, revenue was $1.705 billion, down 9.4% year-on-year, while EBITDA fell by 16.6% to $479 million [1] - The company experienced a decline in sales volume of 8.1% for the first three quarters and 11.4% in Q3 [1] - The average price per ton of beer increased by 2.2% year-on-year for both the first three quarters and Q3 [1] Regional Performance - In the Western region of Asia, Q3 revenue and EBITDA decreased by 15.1% and 25.9% year-on-year, respectively, with sales volume down 13.5% [1] - Conversely, the Eastern region of Asia saw revenue and EBITDA growth of 15.7% and 33.3% year-on-year in Q3, with sales volume up 3.9% [1] - In India, Budweiser's high-end and super high-end product lines achieved double-digit revenue growth, with high-end products accounting for over two-thirds of revenue [1] - In South Korea, Q3 sales volume grew in the single digits, contributing to a double-digit revenue increase for the first three quarters [1] Financial Forecasts and Valuation - The report lowers the net profit forecasts for 2024-2026 to $797 million, $907 million, and $996 million, representing reductions of 15%, 13%, and 13% respectively [2] - The current stock price corresponds to a PE ratio of 17x for 2024, 15x for 2025, and 14x for 2026 [2] - The company is expected to maintain a competitive advantage in the high-end and super high-end segments [2]

Investment Rating - The report maintains a "Buy" rating for Budweiser APAC (1876.HK) with a target price of HKD 9.85, indicating a potential upside of 21.5% from the current price of HKD 8.11 [4][21]. Core Views - Short-term performance is expected to be challenging due to a decline in consumer spending in the Chinese beer market, with a projected 9.4% year-on-year decrease in overall organic revenue for Q3 2024, driven by an 11.4% drop in sales volume [2][10]. - Despite short-term difficulties, the long-term outlook remains positive due to Budweiser APAC's strong product and brand mix in the premium and super-premium segments, which could provide significant earnings elasticity as consumer spending recovers [2][11]. - The company's current valuation is considered attractive, and its strong management capabilities and backing from AB InBev enhance its appeal to foreign investors [2][11]. Summary by Sections Financial Performance - For Q3 2024, Budweiser APAC reported a 9.4% decline in organic revenue, with sales volume down 11.4% and a slight average price increase of 2.2% [2][10]. - The normalized EBITDA decreased by 16.6% year-on-year, reflecting the negative operating leverage from the significant revenue drop [10][11]. - The company anticipates that the downward trend in revenue and EBITDA will likely continue into Q4 2024 [2][11]. Market Analysis - In the Chinese market, Q3 2024 sales volume fell by 14.2%, attributed to a higher proportion of on-premise sales channels, which were more adversely affected than off-premise channels [2][11]. - The management noted that there has been no significant impact from policy stimulus on beer demand in Q4 2024, suggesting continued pressure on sales and average pricing [2][11]. - Conversely, the South Korean market showed resilience with a double-digit year-on-year growth in organic revenue for Q3 2024, driven by price increases and improved product mix [12][11]. Financial Projections - Revenue projections for Budweiser APAC are expected to decline to USD 6.245 billion in 2024, a decrease of 8.9% year-on-year, with a gradual recovery anticipated in subsequent years [3][18]. - The net profit is projected to drop to USD 700 million in 2024, reflecting a significant year-on-year decline of 17.8% [3][18]. - The report highlights a low price-to-earnings (PE) ratio of 19.6x for 2024, which is expected to improve to 15.3x by 2025, indicating potential for valuation recovery [3][18].

Investment Rating - The report maintains a "Buy" rating for Budweiser APAC (01876.HK) with a target price of HKD 10, compared to the current price of HKD 8.11 [1][3]. Core Views - The company reported a total revenue of USD 5.104 billion and normalized EBITDA of USD 1.579 billion for the first three quarters of 2024, reflecting a year-on-year decline of 6.1% and 6.2% respectively. The normalized net profit attributable to the parent company was USD 777 million, showing a decline of 11.6% [1]. - In Q3 alone, the company achieved total revenue of USD 1.705 billion and normalized EBITDA of USD 479 million, with year-on-year declines of 9.4% and 16.6% respectively. The normalized net profit for Q3 was USD 225 million, down 25% [1]. - The report highlights the pressure on sales in the China region due to weak consumption in dining and nightlife, increased competition, and high base effects from the previous year. In contrast, the Indian market showed strong growth, particularly in high-end and super-premium product segments [1][3]. Summary by Sections Financial Performance - For the first three quarters of 2024, Budweiser APAC's total revenue was USD 5.104 billion, with a normalized EBITDA of USD 1.579 billion, both down 6.1% year-on-year. The normalized net profit was USD 777 million, down 11.6% [1]. - In Q3 2024, total revenue was USD 1.705 billion, with normalized EBITDA of USD 479 million, reflecting declines of 9.4% and 16.6% year-on-year respectively. The normalized net profit for Q3 was USD 225 million, down 25% [1][2]. Regional Performance - In the Asia-Pacific West region, sales were weak, with a year-on-year decline in volume and price of 14.2% and 2.1% respectively. The pressure was attributed to weak dining and nightlife consumption, intensified competition, and a high base from the previous year [1]. - Conversely, the Asia-Pacific East region saw a recovery in sales, with a year-on-year increase in volume of 3.9% and a price increase of 11.4%, driven by market investments and new product launches [1][3]. Strategic Adjustments - The company is actively adjusting its strategy in the China market by enhancing its presence in the non-retail beverage segment and increasing investments in the mid-range price segment. The report notes that the high-end potential in China remains significant, with expectations for gradual recovery in operations as policies take effect [1][3]. - In South Korea, the company plans to increase prices for high-end products starting November 1, which is expected to support profit growth in the coming year [1].

Investment Rating - The report maintains a "Buy" rating for Budweiser APAC, with a target price of HKD 10, compared to the current price of HKD 8.11 [4][17]. Core Views - The company reported a total revenue of USD 5.104 billion and normalized EBITDA of USD 1.579 billion for the first three quarters of 2024, reflecting a year-on-year decline of 6.1% and 6.2% respectively. The normalized net profit attributable to the parent company was USD 777 million, down 11.6% year-on-year [1][2]. - In Q3 alone, the company achieved total revenue of USD 1.705 billion and normalized EBITDA of USD 479 million, with year-on-year declines of 9.4% and 16.6% respectively. The normalized net profit for Q3 was USD 225 million, down 25.0% year-on-year [1][2]. - The report highlights the ongoing pressure in the Chinese market due to weak sales and increased costs, while the Indian market continues to show strong growth, particularly in the premium segment [2][3]. Summary by Sections Financial Performance - For the first three quarters of 2024, Budweiser APAC's total revenue was USD 5.104 billion, with a normalized EBITDA of USD 1.579 billion, both showing a year-on-year decline of 6.1% and 6.2% respectively. The normalized net profit was USD 777 million, down 11.6% [1]. - In Q3 2024, the company reported total revenue of USD 1.705 billion and normalized EBITDA of USD 479 million, with year-on-year declines of 9.4% and 16.6% respectively. The normalized net profit for Q3 was USD 225 million, down 25.0% [1][2]. Regional Performance - In the Asia-Pacific West region, sales in China saw a year-on-year decline of 14.2% in volume and 2.1% in price, attributed to weak dining and nightlife consumption, increased competition, and a high base from the previous year. Conversely, India continued to show strong growth, particularly in high-end products [2]. - The Asia-Pacific East region experienced a recovery in sales, with a year-on-year increase of 3.9% in volume and an 11.4% increase in price, driven by increased market investment and new product launches [2]. Strategic Adjustments - The company is actively adjusting its strategy in the Chinese market by enhancing its presence in the home beverage segment and increasing investment in the mid-range price segment. The company aims to leverage its high-end brand potential, which currently has a sales share of about 17%, compared to 35% in many mature markets [2][3]. - In South Korea, the company plans to increase prices for high-end products by 8.1% starting November 1, which is expected to support profit growth in the coming year [2].

Sales Volume Correction - Total sales volume for the nine months ended September 30, 2024, is corrected to 7,119.8 million liters, not 7,719.8 million liters as previously stated[1] - The percentage change in organic sales volume remains accurate and unchanged in the announcement[1]

百威亚太第三季度营收低于预期 财联社10月31日电，百威亚太第三季度净利润2.01亿美元，预估2.705 亿美元；第三季度营收17.1亿美元，预估18.2亿美元；第三季度调整后EBITDA 4.79亿美元，预估5.517 亿美元；9个月营收51.0亿美元；9个月毛利率51.4％。 ...

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]