Asahi Group Holdings (2502): Time needed for growth drivers to emerge; value at P/B of 0.8x; expect increase in shareholder returns from 2028

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

11 August 2026

Asahi Group Holdings (2502)

Time needed for growth drivers to emerge; value at P/B

of 0.8x; expect increase in shareholder returns from

2028

Neutral

2502.T, 2502 JP

Price (10 Aug 26):¥1,686

▲Price Target (Dec-27):¥1,750

Prior (Dec-26):¥1,700

We set a new December 2027 price target of ¥1,750 and maintain our Neutral rating

(previously a December 2026 price target of ¥1,700). Although Asahi Group

Holdings has not lost its competitiveness, demand is weak in Europe and Oceania

due to protracted inflation. In Japan, the company is working to regain market share

in alcoholic beverages following the cyberattack, but we still see risk of a slow

recovery for non-alcoholic beverages. Upside potential for profit growth looks

limited to us. In addition, with plans for an upcoming acquisition in Africa in 2H

FY2026, making an increase in shareholder returns less realistic for the time being.

We look for annual share buybacks of ¥200 billion from 2028, when we expect the

net debt/adjusted EBITDA ratio to decline to just over 3x.

Earnings estimates: We forecast FY2026 core operating profit to grow 14%

YoY to ¥300.6 billion. Previously we had expected consolidation of East

African Breweries (EABL) from 3Q, but now revise this to 4Q, lowering our

prior estimate of ¥311.7 billion. Excluding the EABL consolidation, we

forecast core operating profit to grow 11% YoY to ¥291.4 billion (+2% YoY on

a constant currency basis), to achieve guidance of ¥291 billion (+3% YoY on

a constant currency basis). Guidance does not factor in cost inflation from the

Middle East conflict (¥10–15 billion), but the fixed cost assumption for Japan

looks conservative, and we think guidance is achievable. We make only minor

revisions from FY2027, forecasting core operating profit to grow 14% YoY to

¥343.5 billion in FY2027 (+6% YoY ex EABL) and grow 7% YoY to ¥365.9

billion in FY2028. We lower our FY2028 ROE estimate to 6.6% (from 7.3%),

assuming share buybacks from 2028. A key factor for this is end-FY2025 BPS

rising more than we expected due to yen depreciation. Based on this, we set our

…