Jinwu Financial News | According to BOC International Development Research Report, due to pressure on catering and nighttime consumption, increased industry competition, and high base pressure during the same period, Budweiser Asia Pacific (01876) sales in China fell 14.2% in the 3rd quarter of 2024. The average unit price fell 2.1%, and both volume and price continued to be under pressure. As a result, business revenue in China fell 16.1% in the 3rd quarter. Taken together, sales/unit prices in western Asia Pacific (China, India, Vietnam, etc.) declined by 13.5%/1.9%, respectively. Management said that no inflection point in demand was observed in the fourth quarter, so the bank expects sales volume and unit prices in the fourth quarter to continue similar trends as in the third quarter.
Affected by the low base dividend for the same period, Korean market revenue grew by double digits year-on-year in the 3rd quarter of 2024. The company continues to promote new products (such as Kaisi and HANMAC) and continues to receive positive feedback. Coupled with the strong performance of the Korean market, the sales volume/unit price of the East Asia Pacific business (Korea, Japan, New Zealand) achieved 3.9%/11.4% year-on-year growth, respectively.
As the company's business in China continues to be under pressure, the bank lowered its financial forecast for 2024-26, but the bank still believes that the continued expansion of its high-end and ultra-high-end product portfolio in the Chinese market will have the potential to rebound as consumption continues to recover. The target price was lowered from HK$15.6 to HK$9.39, considering that the company's increased investment and aggressive strategy has further strengthened the company's competitiveness in the Korean market, and that the company recently announced an 8.1% price increase for high-end products in the Korean market, which is conducive to improving profitability next year, and based on 19 times (average price-earnings ratio reduced by 1.5 times standard deviation in the past three years) 2025 price-earnings ratio (previously 22 times 2024-25 average).