Lyon: Lowering the target price of Budweiser Asia Pacific (01876) by 29.9% to HK$6.1, weakening beer demand and lowering profit estimates

The Zhitong Finance App learned that Lyon released a research report saying that demand in the Chinese and Korean beer markets is weak, and the recovery is less visible. Coupled with cost factors such as rising aluminum prices, the bank is more cautious about Budweiser Asia Pacific (01876)'s revenue and profit margin prospects in 2027; the bank maintained a “outperforming the market” rating, and the target price was lowered by 29.9% to HK$6.1 from HK$8.7.

The bank predicts that Budweiser Asia Pacific's sales volume in the western Asia Pacific region will continue to decline in the fourth quarter of this year and 2027, partly offset by strong growth in India; it also expects total revenue to fall 6.9% year on year in the fourth quarter of this year and 1.3% year on year in 2027.

In response to weakening operating leverage and rising aluminum costs and transportation expenses, the bank lowered its profit margin forecast, expecting normalized EBITDA to fall 16% year on year in the fourth quarter of this year and 5% year on year in 2027; it also lowered the 2026-2028 forecast by 3% to 7%, the non-GAAP normalized EBITDA forecast by 10% to 17%, and the net profit forecast by 19.2%, 30% and 29.2%, respectively.