Core Viewpoint - CICC has downgraded Budweiser APAC's EBITDA forecasts for 2025 and 2026 by 6% to $1.679 billion and $1.771 billion respectively, due to weak demand in the China region [1] Group 1: Financial Performance - The company's 2Q25 performance met market expectations, with revenue, sales volume, average selling price (ASP), and EBITDA showing year-on-year changes of -3.9%, -6.2%, +2.4%, and -4.5% respectively [2] - In the China market, revenue, sales volume, ASP, and EBITDA experienced year-on-year declines of -6.4%, -7.4%, +1.1%, and -4.0% respectively [2] Group 2: Regional Insights - In the China region, sales volume decreased by 6.4% year-on-year, but the decline rate narrowed, attributed to inventory reduction and channel structure adjustments [3] - ASP in the China region increased by 1.1% year-on-year, benefiting from product mix optimization, with high-end and super high-end products gaining a larger share in non-immediate consumption channels [3] - The Indian market continued to show double-digit growth in revenue, while the Korean market faced pressure due to preemptive stocking and market weakness, leading to a decline in EBITDA margin [4] Group 3: Future Outlook - For 2H25, the company expects stabilization and gradual improvement, with a focus on dealer interests in the China region and low channel inventory [5] - The company plans to expand non-immediate consumption channels and invest in high-end products in Korea and India to enhance profitability [5] - Cost-wise, raw material prices are expected to remain low, which may support profit margin recovery [5]

Core Viewpoint - CICC has downgraded Budweiser APAC's EBITDA forecasts for 2025 and 2026 by 6% to $1.679 billion and $1.771 billion respectively, due to weak demand in the China region [1] Group 1: Financial Performance - 2Q25 results met market expectations with revenue, volume, ASP, and EBITDA showing year-on-year changes of -3.9%, -6.2%, +2.4%, and -4.5% respectively [2] - In China, revenue, volume, ASP, and EBITDA saw declines of -6.4%, -7.4%, +1.1%, and -4.0% year-on-year [2] Group 2: China Market Analysis - In 2Q25, China's sales volume decreased by 6.4% year-on-year, but the decline rate narrowed compared to previous quarters, attributed to inventory reduction and channel structure adjustments [3] - The ASP in China improved by 1.1% year-on-year due to product mix optimization, with high-end and super high-end products gaining a larger share in non-immediate consumption channels [3] Group 3: Regional Performance - The Indian market continued to show double-digit growth in 2Q25, while the Korean market faced challenges due to preemptive stocking and market weakness, leading to a decline in sales volume [4] - In the Asia-Pacific East region, revenue, volume, ASP, and EBITDA experienced year-on-year declines of -8.4%, -10.4%, +2.2%, and -26.5% respectively [4] Group 4: Outlook for 2H25 - The company expects stabilization and gradual improvement in performance, with a focus on dealer interests in China and low channel inventory levels [5] - The company plans to continue investing in high-end products in Korea and leverage high-end and super high-end products in India for growth [5] - Cost expectations for barley and other raw materials remain low, which may support profit margin recovery [5]

调整进行时：品牌年轻化、非现饮发力 新掌门指挥下，百威亚太有了止跌的迹象。 7月31日早间，百威亚太披露了2025年上半年业绩：收入31.36亿美元，正常化除息税折旧摊销前盈利9.83亿美元，销量436.3万千升。 三项核心经营数据依然是全部下滑，比去年同期分别下降了5.6%、8%、6.1%（内生口径）。但21世纪经济报道记者注意到，对比一季度，二 季度百威亚太的收入、盈利有止跌趋势，每百升收入重回增长。 今年4月，在百威体系29年的程衍俊，接替在位多年的杨克，成为百威亚太新任CEO。此次半年报也成为新掌门人上任后的首份成绩单。 在核心的中国市场，二季度百威亚太加强了对百威啤酒、哈尔滨啤酒两大核心品牌的投入，继续大力转向非即饮渠道，此外结合成本管控措 施，收入、盈利跌幅出现放缓。 31日上午开盘后，百威亚太一度涨超5%，但截至收盘跌5.82%。其接下来如何尽快在中国恢复增长，将是下半年的重要KPI。 图片来源：视觉中国 在换帅前，百威亚太去年下半年"加速下行"。 连续两个季度，百威亚太销量、盈利都出现两位数下滑，第四季度在中国更是出现近19%的大幅下滑。这一跌幅，超出了中国啤酒市场的平均 水平。 而到了今年， ...

Core Insights - Budweiser APAC Holdings Limited reported a revenue of $3.136 billion for the first half of 2025, a year-on-year decline of 5.6% [1] - The company achieved a net profit of $409 million and a sales volume of 4.3628 million kiloliters, which represents a 6.1% decrease compared to the previous year [1] Performance Summary - In China, the company's sales volume decreased by 8.2%, with revenue and revenue per hectoliter declining by 9.5% and 1.4% respectively [1] - The second quarter saw a sales volume reduction of 7.4% and a revenue decrease of 6.4%, attributed to ongoing weaknesses in business layout and channel performance [1] - In South Korea, despite a weak industry performance, the company continued to outperform the market across various channels [1] - Growth momentum in India is accelerating, with Budweiser brand growth outpacing the industry [1]

Major Events - JD Group-SW (09618) has decided to make a voluntary public acquisition offer to CECONOMY and establish a strategic investment partnership [1] - Zhonghui Biological-B (02627) plans to conduct an IPO from July 31 to August 5, aiming to globally offer 33.4426 million H-shares [1] - WuXi AppTec (02359) intends to place 73.8 million new H-shares at a discount of approximately 6.90%, raising about HKD 7.65 billion [1] - Weihai Bank (09677) plans to issue up to approximately 758 million domestic shares and 154 million H-shares, raising nearly HKD 3 billion [1] - HSBC Holdings (00005) plans to repurchase up to USD 3 billion of ordinary shares [1] - Joy City Property (00207) proposes a share buyback through an agreement arrangement, with resumption of trading on August 1 [1] Operating Performance - MGM China (02282) reported total revenue of HKD 16.661 billion for the first half, an increase of 2.73% year-on-year [1] - Standard Chartered Group (02888) released interim results with a profit attributable to shareholders of USD 3.065 billion, a year-on-year increase of 41% [1] - Autohome-S (02518) reported a net profit attributable to the parent of RMB 416 million in the second quarter, with online marketing and other business revenues increasing by 20.5% year-on-year [1] - Tongguan Gold (00340) issued a positive profit alert, expecting a mid-term profit attributable to shareholders of approximately HKD 330 million to HKD 360 million, a year-on-year increase of about 259% to 291% [1] - Qingdao Bank (03866) reported a net profit attributable to the parent of RMB 3.065 billion for the first half, a year-on-year increase of 16.05% [1] - Faraday (09638) announced interim results with a profit attributable to shareholders of EUR 4.3454 million, a year-on-year decrease of 0.92% [1] - Budweiser APAC (01876) released interim results with a profit attributable to shareholders of USD 409 million, a year-on-year decrease of 24.4% [1]

Core Viewpoint - Budweiser APAC reported a decline in revenue, net profit, and sales volume for the first half of the year, indicating ongoing challenges in the market [1][2][3]. Financial Performance - Budweiser APAC's net profit for the first half of the year was $409 million, a decrease of 24.4% year-on-year [1][2]. - The total sales volume was 4.363 million kiloliters, down 6.1% compared to the previous year [1][2]. - Revenue decreased to $3.136 billion, reflecting a 5.6% decline [2]. - Gross profit was $1.613 billion, with a gross margin of 51.4%, slightly down from 51.5% [2]. Market Challenges - The company's performance in China was significantly impacted by weak channel dynamics and increased competition from local brands [4][5]. - Budweiser APAC's primary market focus has been on high-end products priced at 10 RMB and above, but competition from domestic brands has intensified [4]. - The traditional distribution channels, particularly in dining and nightlife, faced challenges due to slow recovery and regulatory concerns [5]. Competitive Landscape - Heineken, a major competitor, reported a contrasting performance in China, with a 30% increase in sales of high-end products [6][7]. - Heineken's collaboration with China Resources Beer has strengthened its market position, making it a formidable competitor to Budweiser in the high-end segment [7]. Strategic Adjustments - Budweiser APAC is focusing on expanding its non-drinking channels and enhancing its product positioning to adapt to market changes [8][9]. - The company is investing in high-end products and has initiated partnerships with platforms like Meituan and Ele.me for online retail promotions [8][9]. - The management acknowledges the need for a strategic shift to address current challenges and drive long-term growth [9].

Core Insights - Budweiser APAC reported a decline in revenue, net profit, and beer sales for the first half of the year, with net profit at $409 million (approximately 2.941 billion RMB), a year-on-year decrease of 24.4% [2] - The company's beer sales reached 4.363 million kiloliters, down 6.1% year-on-year [2] - Following the earnings report, Budweiser APAC's stock initially rose over 6.9% but closed down 5.82% at 8.26 HKD per share [2] Financial Performance - Budweiser APAC's net profit for the first half of the year was significantly lower than the previous year's figure of $541 million, marking a continued downward trend [2] - The decline in net profit has accelerated, with a drop of 24.4% compared to a smaller decrease of 5.91% in the previous year [2] Market Challenges - The company's performance in China has been adversely affected by regional layout and weak on-the-go consumption channels [3] - Increased competition from domestic brands like China Resources Beer and Tsingtao, as well as international competitors like Carlsberg, has posed significant challenges [4] - Consumer preferences have shifted towards lower-priced products, impacting Budweiser APAC's market share in the high-end segment [4] Channel Dynamics - Traditional distribution channels, particularly in dining and nightlife, have struggled, contributing to the overall decline in performance [4][5] - The company is facing pressure to adapt its channel strategy, with a focus on integrating traditional and emerging distribution methods [5] Competitive Landscape - In contrast to Budweiser APAC, Heineken has reported strong growth in the Chinese market, particularly in high-end products, with a 30% increase in sales [6][7] - Heineken's partnership with China Resources Beer has enhanced its market presence and competitiveness against Budweiser in China [7] Strategic Adjustments - Budweiser APAC is adjusting its product positioning and channel strategies, focusing on high-end brands and expanding into non-on-the-go consumption channels [8] - The company is investing in online retail and partnerships with platforms like Meituan and Ele.me to boost sales [8] - Despite these adjustments, analysts suggest that the brand's influence and the establishment of a non-on-the-go channel will take time [9] Industry Overview - The overall beer industry in China is facing challenges, with a reported 0.3% decline in production among major breweries in the first half of the year [10] - The market is currently in a contraction phase, raising questions about the performance of other leading companies in the sector [10]

Investment Rating - The report assigns a "Buy" rating for Budweiser APAC (1876 HK) [4][15]. Core Insights - The company experienced a 5.6% year-on-year decline in revenue for the first half of 2025, with a total revenue of $3.14 billion. The EBITDA also fell by 8.0% to $980 million, reflecting challenges in sales and a slow premiumization process [2][8]. - The report anticipates a marginal recovery in the second half of 2025, particularly in the Chinese market, as the company focuses on expanding non-immediate consumption channels [2][7]. - The target price for Budweiser APAC is set at HKD 10.15, indicating a potential upside of 15.7% from the current price of HKD 8.77 [1][12]. Financial Overview - Revenue projections for Budweiser APAC show a decline from $6.856 billion in 2023 to $6.176 billion in 2025, with a slight recovery expected in subsequent years [3][13]. - The net profit is forecasted to decrease from $852 million in 2023 to $741 million in 2025, with a gradual increase to $871 million by 2027 [3][13]. - The EBITDA margin is expected to decline from 29.5% in 2023 to 29.2% in 2025, with a slight recovery anticipated thereafter [14]. Market Performance - The stock has shown a year-to-date increase of 17.09%, with a 52-week high of HKD 10.82 and a low of HKD 6.94 [6][12]. - The average daily trading volume is reported at 21.61 million shares, indicating active market participation [6].

Investment Rating - The report assigns an "Outperform" rating to several companies in the essential consumer goods sector, including Haidilao, Youran Dairy, Jiumaojiu, Modern Farming, Dasheng Holdings, Yihai International, Aoyou, and China Feihe, while Budweiser APAC is rated as "Neutral" [1]. Core Insights - The report highlights a general decline in spot cost indices for six categories of consumer goods, while futures indices primarily increased [38]. - The spot cost indices for dairy products, soft drinks, frozen foods, beer, instant noodles, and condiments changed by -2.92%, -2.46%, -1.88%, -1.78%, -1.58%, and -1.29%, respectively, while the futures cost indices changed by -1.52%/+1.64%/-1.77%/+3.57%/+0.84%/+2.89% [38]. Summary by Category Beer - The spot cost index decreased by 1.78% month-on-month, while the futures index increased by 3.57% [39]. - Year-to-date, the spot and futures indices have changed by -4.54% and -5.08%, respectively [39]. Seasonings - The spot cost index decreased by 1.29% month-on-month, while the futures index increased by 2.89% [40]. - Year-to-date, the spot and futures indices have changed by -1.7% and -3.2%, respectively [40]. Dairy Products - The spot cost index decreased by 2.92% month-on-month, and the futures index decreased by 1.52% [41]. - Year-to-date, the spot and futures indices have changed by -3.87% and -1.08%, respectively [41]. Instant Noodles - The spot cost index decreased by 1.58% month-on-month, while the futures index increased by 0.84% [42]. - Year-to-date, the spot and futures indices have changed by -4.43% and -3.07%, respectively [42]. Frozen Foods - The spot cost index decreased by 1.88% month-on-month, and the futures index decreased by 1.77% [43]. - Year-to-date, the spot and futures indices have changed by -2.95% and -3.6%, respectively [43]. Soft Drinks - The spot cost index decreased by 2.46% month-on-month, while the futures index increased by 1.64% [44]. - Year-to-date, the spot and futures indices have changed by -5.91% and -5%, respectively [44].

Core Viewpoint - The beer stocks have experienced a significant decline, with Budweiser APAC down 5.47%, Qingdao Beer down 5.06%, and China Resources Beer down 4.04% as of the report time. The decline is attributed to a decrease in beer production and external consumption pressures, including a recent ban on alcohol sales [1]. Industry Summary - As of June 2025, the beer production volume of large-scale enterprises in China reached 4.12 million kiloliters, showing a year-on-year decrease of 0.2%. For the first half of the year, the cumulative beer production was 19.04 million kiloliters, down 0.3% year-on-year [1]. - The market sentiment has been affected by the alcohol ban, but there are signs of recovery as the beer consumption season approaches, coupled with positive consumer policy adjustments in China, which may lead to marginal improvements in beer demand [1]. Policy Impact - The Central Political Bureau held a meeting on July 30, emphasizing the expansion of domestic demand with a focus on improving livelihoods. This consumption stimulus policy is expected to alleviate the pressure on beer sales and sales expectations that have been impacted by external consumption environments and the alcohol ban [1].