Morgan Stanley: BUD APAC (01876) beats expectations in the first quarter, expects continued improvement in EBITDA growth, maintains a "buy" rating.

Morgan Stanley released a research report stating that the first quarter revenue of BUD APAC (01876) decreased by 0.7% year-on-year to $1.49 billion, mainly due to a slight increase in sales volume of 0.1% and a slight decrease in average selling price, which was higher than the bank's expected $1.45 billion. The Indian market showed strong performance during the period, while the decline in the Chinese market narrowed. The rating was maintained as "Overweight" with a target price of 9 Hong Kong dollars. In the first quarter, Budweiser's normalized EBITDA decreased by 8.1% year-on-year to $463 million, which was higher than the bank's expected $457 million. The normalized EBITDA profit margin decreased by 246 basis points year-on-year to 31%. The gross profit margin increased slightly by 1 basis point year-on-year, while the EBIT profit margin decreased by 164 basis points year-on-year. Looking ahead, the bank expects the company's EBITDA growth to continue to improve, driven mainly by a rebound in sales volume in South Korea on a normalized basis and an improvement in profit margin in the Chinese market year-on-year.