BUD APAC(HK:01876)2024-08-09 02:01Investment 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]