DBS Highlights Challenges in Asahi's Domestic Operations, Anticipates Higher Marketing Expenses

Deep News19:31

According to a research report from Morningstar's Tsang Ho Yin, Asahi Group's Japanese business is facing pressure, with its marketing costs expected to rise. The Japanese company saw its domestic beer sales volume decline by over 15% year-on-year in the first quarter, falling short of Morningstar's expectations.

The analyst stated that as Asahi Group invests in key markets to drive a sales recovery, its sales, general, and administrative expense ratio is likely to remain above 28% through 2026. Expenses related to cybersecurity investments and digital transformation are also expected to increase.

Morningstar has lowered its earnings forecast for Asahi Group for 2026 by 7% and reduced its fair value estimate for the stock by 3% to ¥2,160.0. The stock closed down 0.6% at ¥1,558.0.

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