BUD APAC(01876) 华创证券·2024-05-09 04:02Investment Rating - The report maintains a "Recommend" rating for Budweiser APAC (01876 HK) with a target price of HKD 15 5 [1] Core Views - Budweiser APAC faced volume pressure in Q1 2024 but benefited from price increases and cost efficiencies leading to improved profitability [1] - The company achieved a normalized EBITDA of USD 572 million up 1 4% YoY and normalized net profit attributable to shareholders of USD 297 million down 1 0% YoY [1] - In the Asia Pacific West region China experienced a 4 9% YoY decline in volume due to high base effects and unfavorable weather but saw a 3 6% YoY increase in price per ton driven by premiumization [1] - The Asia Pacific East region saw a 4 0% YoY decline in volume but a significant 9 6% YoY increase in price per ton due to price hikes in South Korea and other markets leading to an 18 7% YoY increase in normalized EBITDA [1] - Overall the company's price per ton increased by 4 6% YoY and gross margin improved by 2 1 percentage points to 51 5% [1] - The report expects sales growth to improve as base effects normalize and profitability to continue rising due to premiumization and cost efficiencies [1] Financial Performance Summary - Q1 2024 revenue was USD 1 643 billion down 3 5% YoY [1] - Normalized EBITDA margin increased by 1 5 percentage points YoY to 34 8% [1] - The company's gross margin improved to 51 5% up 2 1 percentage points YoY [1] - Sales general and administrative expenses as a percentage of revenue increased slightly by 0 8 percentage points to 28 2% [1] Regional Performance - Asia Pacific West: Volume declined by 4 9% YoY but price per ton increased by 3 6% YoY with EBITDA margin up 1 45 percentage points YoY [1] - Asia Pacific East: Volume declined by 4 0% YoY but price per ton surged by 9 6% YoY with EBITDA margin up 3 34 percentage points YoY [1] Future Outlook - The report forecasts a gradual improvement in sales growth as base effects normalize and competitive positioning strengthens in South Korea [1] - Continued premiumization and cost efficiencies are expected to drive further profitability improvements [1] - The 2024-2026 net profit forecasts are adjusted to USD 1 03 billion USD 1 17 billion and USD 1 29 billion respectively with corresponding PE ratios of 18x 16x and 15x [1] Financial Projections - Revenue is projected to grow from USD 7 235 billion in 2024E to USD 7 947 billion in 2026E with a CAGR of 4 3% [2] - Net profit attributable to shareholders is expected to grow from USD 1 03 billion in 2024E to USD 1 288 billion in 2026E with a CAGR of 9 8% [2] - The PE ratio is forecasted to decline from 18 1x in 2024E to 14 5x in 2026E [2]