Core Viewpoint - The company reported weak performance in the Chinese market for Q3 2025, with a focus on addressing challenges in the on-premise channel and inventory management [1][5][17] Financial Performance - In Q3 2025, the company's sales in China decreased by 11.4%, and revenue fell by 15.1%, with revenue per hectoliter down by 4.1% due to increased investment in innovative products and brand promotion [5][17] - For the first nine months of 2025, sales in China decreased by 9.3%, while revenue and revenue per hectoliter decreased by 11.3% and 2.2%, respectively [5][17] - Overall, for the first nine months of 2025, the company's total sales decreased by 7.0%, and revenue decreased by 6.6%, with revenue per hectoliter increasing by 0.4% [17] Market Strategy - The company aims to restore growth and rebuild market share by focusing on improving market channel execution and product mix [2][5] - There is a significant shift towards home consumption, with the company increasing its investment in family consumption channels and e-commerce [9][11] - The company has introduced new packaging formats, such as larger cans, to cater to the home consumption trend [9][11] Inventory Management - The company has actively managed its inventory, reporting that inventory levels and turnover days are lower than the previous year and below industry averages [8][11] Brand Development - The company is focusing on the Harbin brand as a core product line and expanding its presence in both on-premise and home consumption markets [14][16] - The company believes that the Harbin brand has strong potential to compete regionally, especially in traditional strongholds [14][16] Future Outlook - The company anticipates continued growth in the home consumption channel, driven by rising disposable incomes and market maturity [13] - The company is optimistic about expanding its non-on-premise sales to align more closely with industry averages [13]

Core Viewpoint - The article discusses the financial performance of Budweiser APAC in Q1 2025, highlighting a decline in revenue and profit, with specific regional performance variations and challenges in the Chinese market [3][5]. Financial Performance Summary - Budweiser APAC reported Q1 2025 revenue of $1.461 billion, with a year-on-year decline of 7.5%. Normalized EBITDA was $485 million, down 11.2% year-on-year, and net profit attributable to shareholders was $234 million, a decrease of 18.5% [3]. - The company achieved a total sales volume of 1.9741 million kiloliters in Q1 2025, reflecting a year-on-year decline of 6.1%. Revenue per hectoliter decreased by 1.5% [4]. Regional Performance Analysis - In the Eastern region, Budweiser APAC saw revenue and normalized EBITDA increase by 11.7% and 24.4% year-on-year, respectively, with sales volume up by 11.9%. However, revenue per hectoliter remained flat [4]. - The Western region faced challenges, with revenue and normalized EBITDA declining by 11.7% and 17.6% year-on-year, respectively. Sales volume decreased by 8.6%, and revenue per hectoliter fell by 3.4% [4]. - In China, the company experienced a significant decline, with revenue and normalized EBITDA down 12.7% and 17.1% year-on-year, respectively. Sales volume decreased by 9.2%, and revenue per hectoliter fell by 3.9% [5]. Strategic Focus - The company is focusing on non-ready-to-drink channels to drive premiumization, which has shown positive results with a 70% year-on-year increase in sales of its zero-sugar Harbin Ice Pure Beer [5]. - Budweiser APAC is enhancing engagement with younger consumers as part of its strategy to improve market performance [5].

Investment Rating - The report maintains a "Buy" rating for Budweiser APAC (1876.HK) [6] Core Views - Budweiser APAC's Q1 2025 performance was impacted by the Chinese market, with revenue of $1.461 billion, a year-on-year decline of 7.5% [1] - The company is focusing on high-end and super high-end products, particularly in the Indian market, which showed growth despite overall challenges [3][4] - The report anticipates continued pressure in the Chinese market but sees potential recovery in the second half of 2025 as inventory issues are resolved [4] Revenue and Profitability - Q1 2025 revenue was $1.461 billion, with normalized EBITDA of $485 million, and net profit of $234 million, reflecting declines of 11.2% and 18.5% year-on-year respectively [1] - The company achieved a gross margin of 51.0% in Q1 2025, with a normalized EBITDA margin of 33.2% [2] Regional Performance - Eastern region showed positive growth with revenue and normalized EBITDA increasing by 11.7% and 24.4% year-on-year, while the Western region faced declines of 11.7% and 17.6% respectively [3] - In China, revenue and normalized EBITDA fell by 12.7% and 17.1% year-on-year, with a volume decline of 9.2% [4] Future Projections - The report has revised down net profit forecasts for 2025-2027 to $752 million, $797 million, and $841 million, reflecting adjustments of 5%, 7%, and 8% respectively [4] - The current stock price corresponds to a PE ratio of 19x for 2025, 18x for 2026, and 17x for 2027 [4]