BUD APAC(01876) 浦银国际证券·2024-05-09 02:02Investment Rating - The report maintains a "Buy" rating for Budweiser APAC (1876.HK) with a target price of HKD 14.0, representing a potential upside of 27.3% from the current price of HKD 11.0 [4][5][22]. Core Views - Despite a weaker-than-expected EBITDA growth in Q1 2024, the report expresses optimism for a double-digit growth in organic EBITDA for the full year 2024, driven by strong product mix improvements in China, stable unit costs, and potential growth in South Korea [3][4]. - The report highlights that the increase in expense ratio in Q1 2024 is primarily due to marketing timing and base effects, and expects the expense ratio to remain stable year-on-year for the full year [3][4]. - The report notes that Budweiser's brand continues to drive product mix improvements in China, with a 3.7% increase in average selling price despite a 6.2% decline in volume [3][4]. Summary by Sections Financial Performance - Q1 2024 revenue decreased by 0.4% year-on-year, with a 4.8% decline in volume but a 4.6% increase in average selling price [3][18]. - The report projects 2024 revenue of USD 7.18 billion, reflecting a 4.7% year-on-year growth [12][13]. - The net profit for 2024 is estimated at USD 1.099 billion, representing a 28.9% year-on-year increase [12][13]. Market Dynamics - The report indicates that the Chinese market is experiencing a shift towards premium and super-premium products, which is expected to continue driving revenue growth [3][4]. - In South Korea, price increases from the previous year are expected to support significant EBITDA growth in the coming quarters, despite a slight decline in volume [3][4]. Valuation - Budweiser APAC's current EV/EBITDA is 6.8x, which is significantly lower than industry peers, suggesting a high valuation discount [3][4]. - The report estimates a target price of HKD 14.0 based on a sum-of-the-parts valuation, with a focus on the East Asia and West Asia segments [19][22].