Xiaomo expects an average compound annual growth rate of 5% in sales between 2023 and 2026 for Budweiser Asia Pacific (01876).
The Zhitong Finance App learned that J.P. Morgan Chase released a research report stating that it maintains the “neutral” rating of Budweiser Asia Pacific (01876) and believes that its current valuation is quite reasonable, and the target price has been lowered from HK$11.5 to HK$11.
According to the report, due to tepid consumer sentiment, it is predicted that Budweiser Asia Pacific (01876) sales in China and South Korea will decline in the first quarter. However, the main risk facing Budweiser China is that the contribution of changes in channel mix is gradually weakening (in the second half of last year, more nightclubs were converted to Live Houses), while the Korean market is being affected by the resurgence of Japanese brands, which are competing for market share lost during the 2019 trade war.
The bank expects Budweiser Asia Pacific's sales compound annual growth rate of 5% from 2023 to 2026, and the EBITDA profit margin to grow 120 pips to 30.7%. Furthermore, it is expected that the company's sales volume/average product price/sales/EBITDA for the first quarter of this year will decrease by 2.4%, 5.6%, 3.1% and 3.7%, respectively, and increase by 0.8%, 3.9%, 4.7%, and 5.8% year-on-year respectively for the whole year. The bank's forecast for Budweiser Asia Pacific this year is 6% lower than market expectations.