BUD APAC(HK:01876)2024-05-09 08:02Investment Rating - The report maintains a "Buy" rating for Budweiser Brewing APAC (1876 HK) with a target price of HKD 15.60, indicating a potential upside of 36.6% from the current closing price of HKD 11.42 [1][10]. Core Insights - In Q1 2024, Budweiser experienced a decline in sales volume but an increase in average selling price (ASP), leading to better-than-expected margin expansion. Revenue showed a slight year-on-year decline of 0.4%, while ASP increased by 4.6% [1]. - The EBITDA margin improved by 153 basis points to 34.8%, driven by a 206 basis point increase in gross margin to 51.5% [1]. - The company reported a 6% decline in sales volume in the Chinese market, attributed to high base effects from the previous year and adverse weather conditions in March [1]. - South Korea emerged as a highlight with a 9.6% increase in ASP, resulting in a 5.2% increase in sales revenue and an 18.7% increase in EBITDA [1]. Financial Overview - For the fiscal year ending December 31, 2024, the projected revenue is USD 7.478 billion, reflecting a year-on-year growth of 9.1% [2][11]. - The net profit for 2024 is estimated at USD 1.105 billion, with an expected earnings per share (EPS) of USD 0.08, representing a significant growth of 29.7% compared to the previous year [2][11]. - The report highlights a consistent increase in the dividend yield, projected to reach 4.3% in 2024 [2]. Regional Performance - The Asia-Pacific regions showed a decline in sales volume, with East Asia down 4.0% and West Asia down 4.9%, but high-end product sales continued to grow, contributing positively to EBITDA [1]. - The company plans to expand its geographic footprint, increasing the number of cities covered by its brands and its B2B management platform, BEES [1]. Stock Performance - The stock has seen a significant fluctuation, with a 52-week high of HKD 22.20 and a low of HKD 9.88, indicating volatility in market performance [4].