BUD APAC(HK:01876) Huachuang Securities·2024-02-28 16:00Investment Rating - The report maintains a "Recommended" rating for Budweiser APAC (01876.HK) with a target price of HKD 18, while the current price is HKD 12.68 [1]. Core Views - The report highlights impressive tonnage prices in China, while tariffs in South Korea are seen as a drag on performance. The company achieved a total revenue of USD 6.856 billion in 2023, with a year-on-year growth of 5.8% [1][11]. - The normalized EBITDA for the year was USD 2.023 billion, reflecting a year-on-year increase of 4.7%. The normalized net profit attributable to shareholders was USD 917 million, showing a growth of 6.8% [1][11]. - The report anticipates continued focus on premiumization and cost benefits to enhance profits in 2024, despite competitive pressures in the South Korean market [1]. Summary by Sections Financial Performance - For Q4 2023, the company reported revenue of USD 1.293 billion, with a year-on-year growth of 11.0%. The normalized EBITDA for Q4 was USD 266 million, marking a significant increase of 33.0% year-on-year [1]. - The normalized net profit for Q4 was USD 38 million, a recovery from a loss of USD 19 million in the same quarter last year [1]. Regional Performance - In the Asia Pacific West region, Q4 saw a decline in total volume in China but strong performance in premium and super-premium products, with tonnage prices increasing by 14.7% [1]. - The Asia Pacific East region faced intense competition, leading to a slight decline in sales volume, but price increases helped turn EBITDA growth positive [1]. Profitability and Cost Management - The report notes that the normalized profit margin remained stable year-on-year, with a normalized net profit margin of 13.4% for 2023. However, non-recurring tax provisions in South Korea negatively impacted overall profitability [1]. - The company expects to benefit from lower costs of barley and aluminum, alongside price increases, to drive profit growth in 2024 [1]. Future Outlook - The report projects a recovery in profits for 2024, with adjusted net profit forecasts of USD 1.074 billion, reflecting a growth of 26.0% year-on-year [1][11]. - The company aims to continue its premiumization strategy and leverage cost advantages to enhance profitability in the coming years [1].