BOC International expects that Budweiser Asia Pacific's gross margin and EBITDA profit margin for the fourth quarter will rise 5.3 and 11 percentage points, respectively, to 51.1% and 28.2%, respectively.
The Zhitong Finance App learned that BOC International released a research report stating that it reaffirmed the Budweiser Asia Pacific (01876) “buy” rating. Given the intense competition in the Korean market, and although the Chinese market is resilient compared to high-end expectations, the consumer environment is still uncertain. It lowered sales volume and profit margin expectations for 2023 to 2025, and lowered earnings per share. The target price was lowered from HK$20.7 to HK$15.2.
The bank expects the company's 2023 sales and normalized net profit to increase by 6.2% and 18.2%, respectively, to US$6.88 billion and US$985 million respectively, which means that sales for the fourth quarter of 2023 will increase 13% year over year, and normalized net profit of US$126 million. Average price growth is strong due to the modernization of the Chinese market and price increase strategies in the Korean market, as well as the continued decline in raw material costs. Budweiser Asia Pacific's gross margin and EBITDA profit margin for the fourth quarter are expected to increase by 5.3 and 11 percentage points, respectively, to reach 51.1% and 28.2%, respectively.