HK Stock Market Move | BUD APAC (01876) fell more than 4% in the afternoon, JP Morgan expects Budweiser's sales in China to continue to decline in the second quarter.

BUD APAC (01876) fell more than 4% in the afternoon, as of the time of writing, it was down 3.75% to HKD 7.69, with a trading volume of HKD 2.26 billion. JP Morgan released a research report indicating that BUD APAC's sales and profits in the first quarter fell by 11% and 19% respectively year-on-year, which was roughly in line with market expectations. Excluding exchange rate factors, sales and EBITDA fell by 7.5% and 11.2% respectively year-on-year. The Chinese market was impacted by destocking pressure in channels and weak performance in the on-trade channel, while the Korean market performed better. Looking ahead, JP Morgan predicts that Budweiser's sales volume in China will continue to decline until the second quarter of 2025, when it is expected to turn positive. CMSC International released a research report stating that BUD APAC Group's performance in the first quarter was weak but in line with expectations, with sales down 7.5% year-on-year, mainly due to the continued headwinds in the mainland market, where sales declined by 12.7%. The group's recurring EBITDA dropped by 11.2%, mainly due to a weakening of operating leverage. However, the performance in the Asia Pacific East region remained strong, with sales and EBITDA growth of 11.7% and 24.4% respectively, and a stable gross profit margin of 51%. The bank believes that BUD APAC's recovery trajectory may be more complex than its peers.