Citibank: Budweiser Asia Pacific (01876)'s natural EBITDA for the third quarter fell short of expectations by 12% and maintained a “buy” rating and a target price of HK$8.7

The Zhitong Finance App learned that Citi released a research report stating that it will maintain the “buy” rating of Budweiser Asia Pacific (01876) and a target price of HK$8.7. The company's natural EBITDA for the third quarter fell 23% year on year, below the bank's and market expectations of 12% each. Mainly due to China's sales volume and EBITDA profit margin falling short of expectations, but revenue performance was generally in line with expectations.

The bank pointed out that Budweiser Asia Pacific's natural sales volume in the third quarter fell 10% year on year, and the group's average sales price increased 2% year on year. Core net profit fell 28% year over year to US$147 million in the third quarter, including a provision of US$30 million for overdue receivables from India's Telangana State Beverage Company; reported net profit fell 50% year over year to US$92 million, and was also affected by non-recurring withholding taxes of US$52 million related to internal restructuring of mainland subsidiaries.

Citi reiterated that its relative preference for Chinese beer stocks ranked China Resources Beer (00291) higher than Budweiser Asia Pacific, and Budweiser Asia Pacific higher than Tsingtao Brewery (00168).