BUD APAC(HK:01876) Ge Long Hui·2025-11-01 12:47Core Insights - The company reported a decline in revenue and normalized EBITDA for Q3 2025, with total revenue of $15.55 billion and normalized EBITDA of $4.38 billion, reflecting year-on-year decreases of 8.4% and 6.9% respectively [1][2] - The Asia-Pacific region faced significant challenges, particularly in China, where revenue dropped by 15.1% due to a decline in high-end dining and ongoing inventory reduction efforts [1][3] - In contrast, the Asia-Pacific East region showed a revenue increase of 3.9%, driven by price increases and product upgrades, despite a slight decline in sales volume in South Korea [2][3] Asia-Pacific West Region - The Asia-Pacific West region experienced a revenue decline of 12.0% and a normalized EBITDA decrease of 11.9% in Q3 2025 [1] - The revenue drop was attributed to a 15.1% decline in the China region, with sales volume down 11.4% and price per ton down 4.1% [1] - The company is increasing investment in innovative products and expanding non-immediate consumption channels to counteract these declines [1][3] Asia-Pacific East Region - The Asia-Pacific East region saw a revenue increase of 3.9%, with a slight decline in sales volume of 0.6% in South Korea [2] - Price per ton increased by 4.5%, primarily due to price hikes and product structure upgrades [2] - The company achieved an 8.7% increase in normalized EBITDA, with a 1.4 percentage point improvement in EBITDA margin [2] Strategic Adjustments - The company is actively adjusting its operations in response to ongoing demand pressures, focusing on building family-oriented sales channels and introducing new product packaging [3] - There is a continued emphasis on innovation, with new product launches expected to contribute positively to future growth [3] - The company has streamlined its channels and reduced inventory levels, positioning itself for a more favorable operational environment in the coming year [3] Investment Outlook - The company maintains a "recommended" rating despite the pressures in the Chinese market, with positive performance in South Korea and India providing some offset [3] - Profit forecasts for 2025-2027 have been adjusted downward, with expected normalized net profits of $6.71 billion, $7.17 billion, and $7.54 billion respectively [3] - The target price remains at HKD 10, corresponding to a PE ratio of 24 times for 2026 [3]