Goldman Sachs has issued a research report maintaining its "Buy" rating on Budweiser APAC (01876), while lowering its 12-month target price from HK$6.9 to HK$6.55.
The bank noted that the company's third-quarter sales performance was better than the market had previously feared, but EBITDA was weaker, mainly due to soft volumes and margin pressure in China.
After attending the company's earnings call, the bank said management reiterated that at this stage the priority is to stabilize sales volume and market share in China before considering profit improvement, and acknowledged that given the weak industry and soft demand sentiment, a market recovery will take longer than previously expected.
The bank pointed out that China's beer industry saw volumes decline by a high-single-digit percentage year-on-year in the third quarter, with demand remaining weak in October. Although channel destocking has made progress, management expects further adjustments will still be needed in the near term.
On costs, management said that from the fourth quarter through 2027, the China and South Korea markets may face raw material cost headwinds, especially rising aluminum prices, and the company currently has no plans to raise prices in either the China or South Korea markets.
In South Korea, despite weak industry growth momentum, the company continued to gain market share; in India, benefiting from premiumization and market share gains, the company maintained double-digit volume growth.
The bank raised its 2026 sales forecast for the company by 0.4% and lowered its 2027 to 2028 sales forecasts by less than 1%; it raised its 2026 net profit forecast by 1.4% while cutting its 2027 to 2028 net profit forecasts by 5.8% to 7.1%.
The bank now expects the company's 2026 sales, normalized EBITDA, and recurring net profit to be US$5.67 billion, US$1.41 billion, and US$579 million, respectively.
Comments