Morningstar

Budweiser APAC: First-Quarter 2023 Beat Consensus, on Track to Stronger Second Quarter

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Securities In This Article
Budweiser Brewing Co APAC Ltd
(01876)

Narrow-moat Budweiser APAC 01876 reported first-quarter results that exceeded our above-consensus estimates. Reopening in China was the major driver for volume strength during the quarter, though price/mix growth was less than expected. The company is optimistic on the potential of the premiumization trend in the China beer market, despite doubts on consumer trade down in recent quarters. We corroborate management’s view and believe Budweiser APAC could benefit from continued momentum through the second quarter as the summer peak season approaches. We moderately lowered our 2023 revenue estimates mainly on foreign exchange and price/mix revision but retain our fair value estimate at HKD 24 per share, which implies 16 times 2023 EV/EBITDA. Shares of the company, along with other major beer brewers, trended negatively following weaker-than-expected price/mix, but we expect premiumization to accelerate in the second quarter. While being close to our fair value, we think the stock would be viewed favorably in the near- term as on-trade channel strength persists.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Jacky Tsang

Equity Analyst
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Jacky Tsang is an equity analyst, Asia, for Morningstar*. He covers the Greater China consumer defensive sector, which includes packaged food, alcoholic and non-alcoholic beverages, home and personal care as well as consumer retail companies. He also covers some Japanese condiments and retail firms.

Before joining Morningstar in 2021, Tsang was the research lead at GfK, where he covered a variety of listed companies, notably in the consumer durables and electronics sectors across the Asia-Pacific region. He has presented as an industry expert at various sell-side investor conferences. He also worked previously with Coleman Research, where he conducted primary industry research and helped generate leads for clients seeking channel checks.

Tsang holds a bachelor's degree (first class) in English studies from The Hong Kong Polytechnic University.

* Morningstar Asia Limited (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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