Citibank: Budweiser Asia Pacific (01876) expects third-quarter sales to drop 7% year-on-year, and the company expects to accrue $82 million in taxes and provisions

The Zhitong Finance App learned that Citi released a research report saying that Budweiser Asia Pacific (01876) announced that it expects to record a total of 82 million US dollars in internal restructuring withholding tax expenses and Indian receivables accrual provisions in the third quarter of this year. According to a research report, Citi predicts that the Group's third-quarter sales will fall 7% year on year (China down 8%; East Asia Pacific market down 4%), and that the Group's endogenous EBITDA will drop 12% year on year (China down 15%; East Asia Pacific down 8%), and maintain the stock's “buy” rating and target price of HK$10.8.

In terms of business in China, Citi expects sales to fall 8% year on year, average sales price increase 0.5% year on year, sales fall about 8% year on year, gross profit fall 11% year on year, and endogenous EBITDA fall 13% year on year after normalization. In the Asia-Pacific East (mainly South Korea), sales volume is expected to drop 3% year on year, average sales price drop 2% year on year, sales fall 5% year on year, gross profit drop 7% year on year, and endogenous EBITDA fall 9% year on year after normalization.

The bank also reiterated that the preferred stocks in the Chinese beer industry were China Resources Beer (00291) > Budweiser Asia Pacific > Tsingtao Brewery Co., Ltd. (00168), all with a “buy” rating; their preferences for the domestic essential consumer goods segment were dairy > beverages > seasonings > cosmetics > beer > liquor > pet food in that order.