Research Report: BOCOMI Raises BUD APAC (01876.HK) TP to $15.6 on Resilient Beer Premiumization

by Kaia

BOCOMI, in its latest research report, has adjusted the target price for BUD APAC (01876.HK) to $15.6, attributing this revision to the beer company’s resilient premiumization efforts in the Asia-Pacific (APAC) region.


Financial Performance Highlights:

BUD APAC (01876.HK) witnessed a modest increase in sales in 2023, aligning with market expectations and marking a 5.8% year-over-year (YoY) growth.


Normalized net profit also saw a positive trajectory, rising by 7% YoY.
Gross profit margin exhibited growth, expanding by 35 basis points (bps).


Dividend and Payout Ratio:

BOCOMI notes a significant increase in dividend per share (DPS) by 40%, leading to a substantial rise in dividend yield to 82%.


The Group’s commitment to maintaining a dividend payout ratio of 75% or higher in the future underscores its shareholder-friendly stance.

Market Analysis and Outlook:

BOCOMI emphasizes the resilience of beer premiumization trends in the western APAC region, projecting future margin growth for BUD APAC (01876.HK) through brand and channel portfolio optimization and enhanced operational efficiency.

However, in the eastern region, particularly the Korean market, sales faced a decline attributed to heightened competition from Japanese brands.

Nevertheless, BOCOMI anticipates an improvement in EBITDA margins in the eastern region through strategic price adjustments, operational enhancements, and brand mix optimization.

Recommendation and Rating:

BOCOMI reiterates its Buy rating on BUD APAC (01876.HK), underlining confidence in the Group’s growth prospects.

The revised target price of $15.6 reflects BOCOMI’s bullish outlook on the company’s performance and its ability to navigate market challenges effectively.

With a focus on leveraging premiumization trends and optimizing operational efficiency, BUD APAC (01876.HK) is positioned to capture opportunities in the dynamic APAC beer market landscape.

Note: Hong Kong stock quotes are delayed by at least 15 minutes. Short Selling Data is as of 2024-03-04 12:25.



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