Lyon: BUD APAC (01876) China sales decline narrows in first quarter, rated "outperform the market"

Lyon released research report, stating that BUD APAC (01876) first quarter organic revenue fell by 0.7% year-on-year, slightly better than the bank's and market's expectations, mainly driven by the improvement in trends in the Asia-Pacific Western region, with China's sales decline narrowing further to 1.5%, and strong performance in the Indian market. Normalized EBITDA and net profit for the period were both higher than market expectations. Lyon maintained a "outperform market" rating for BUD APAC with a target price of 9 Hong Kong dollars. In the first quarter, Budweiser's revenue increased by 2.2% year-on-year to $1.493 billion, exceeding the bank's and market's expectations by 2% each. Revenue in the Asia-Pacific West increased by 4%, while revenue in the Asia-Pacific East decreased by 5.1% year-on-year. Sales remained flat year-on-year, with revenue per hectoliter increasing by 2.2% to $76. Gross margin increased slightly by 0.1 percentage points to 51.1% year-on-year. Normalized EBITDA fell by 4.5% year-on-year to $463 million, with a 2.2 percentage point decrease in the normalized EBITDA profit margin to 31%. Net profit fell by 3.4% year-on-year to $226 million, beating the bank's and market's expectations. Net profit margin decreased by 0.8 percentage points to 15.7%.