Morgan Stanley: Maintains "overweight" rating for BUD APAC (01876) with target price lowered to 9.3 Hong Kong dollars.

Morgan Stanley has released a research report stating that they have lowered the target price of BUD APAC (01876) by 13.9%, from 10.8 Hong Kong dollars to 9.3 Hong Kong dollars, while maintaining a "hold" rating. Morgan Stanley predicts that the sales of BUD APAC declared in 2024 will decrease by 10%, with normalized EBITDA decreasing by 12% year-on-year. Morgan Stanley has stated that they have lowered the earnings forecast for the company by 6% for the years 2024-2026, mainly due to: 1) a reduction of 3% in the 2024 sales forecast, as sales of high-end brands in China were weak in the fourth quarter, based on the low base in 2024, and also reduced sales forecasts for 2025-2026 for the company by 3%; 2) lowering gross margin forecasts for the company by 0.2-0.4 percentage points, due to weak sales in the high-end market and the leverage effect of declining sales in China. Therefore, they have reduced EBITDA forecasts for the company for the years 2024-2026 by 4%.