First Read Budweiser Brewing Company APAC H126 result review: EBITDA inline while NP beat due to dividend withholding tax phasing

Research evidence excerpt

First Read Budweiser Brewing Company APAC H126 result review: EBITDA inline while NP beat due to dividend withholding tax phasing

e-digit growth, primarily due to the low base in Q225 of high-single-digit decline

12/27E 0.38 0.36 -4 0.41

after the surge in demand in Q125 ahead of April 25 price hike. On a half-year basis, 12/28E 0.40 0.38 -4 0.43

H126 volume was flattish and market share gain continued. ASP and revenue both

reported low-single-digit growth. Mgmt noted sustained investment in flagship brands. Christine Peng, CFA

India: Momentum remained intact in Q226 as premiumsation rolls out continuously, Analyst

which achieved double-digit revenue growth. Mgmt noted significant improvement in christine-y.peng@ubs.com

+852-2971 7571

cash flow and profitability in the region.

Key takeaways from earnings call

We attended BUD’s virtual earnings call on July 30. Looking ahead to H226, mgmt

expects macro headwinds in China to persist, and the sales volume and margin likely

remain under pressure. And given the weakness in on-trade channel, BUD will continue

to expand in-home channel and broaden consumer base through product diversification

and brand promotion. Regarding capital allocation, mgmt highlighted organic-growth

related investment as priority, yet in our view, there is potential for stable dividends as

previous years, given its net cash position and strong cash generation.

Valuation: Maintain Buy with a PT of HK$8.0

We revise our DCF-based PT to HK$8.0 (WACC at 10.3%), largely owing to pressure on

the China business, with 2026-2028E 4.2% normalized EBITDA CAGR implied.

Highlights (US$m) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E

Revenues 6,856 6,246 5,764 5,830 5,979 6,129 6,286 6,451

EBIT (UBS) 1,369 1,160 986 889 931 972 1,015 1,059