Lyon: Maintain BUD APAC (01876) "outperform the market" rating, raise target price to HK$10.4.

Lyon issued a research report stating that it maintains a "outperform" rating on BUD APAC (01876) with a target price raised from 9.1 Hong Kong dollars to 10.4 Hong Kong dollars. The bank predicts that the group's revenue will increase by 5% year-on-year this year, and the pre-tax and interest depreciation and amortization profit will remain flat year-on-year, mainly due to the higher gross profit margin offsetting the higher marketing expenses. Lyon pointed out that BUD APAC's fourth-quarter revenue fell by 11.7% year-on-year to 1.1 billion US dollars, lower than expected, mainly due to drag in the mainland market. Its organic pre-tax and interest depreciation and amortization profit exceeded expectations, with a net loss of 16 million US dollars, lower than expected. The bank mentioned that it is pleased to see the management actively expanding its market share in China and is more optimistic about its prospects. Even though some measures are still in the preliminary stage and need to be implemented over time, some positive factors can still be seen, such as accelerating the pace of execution, being more willing to increase marketing expenses, adopting new packaging, more innovation, and a low base, etc.