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Budweiser Brewing Co APAC Ltd 01876

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Volume Miss for Budweiser Brewing Co. APAC in Q2 Fiscal-Year 2021 as Input Cost Clouds Loom

Analyst Note

| Philip Gorham, CFA, FRM |

Budweiser Brewing Co. APAC missed our volume estimates in the second quarter of 2021, although the gross margin was better than we had expected. We have tweaked our assumptions slightly to reflect this, but the net effect is no change to our forecast of USD 0.07 in earnings this year and no change to our HKD 17 fair value estimate. The mid-single-digit percentage decline in the market value is perhaps a reflection of the expectations that have been priced in recently, and while we think this report has little impact on long-term value, we see evidence that there could be more disappointments to come in the short term.

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Company Profile

Business Description

Budweiser Brewing Co. APAC is the largest brewer in Asia by retail sales value and the second largest by volume, according to Euromonitor. After 10% of the business was listed on the Hong Kong exchange in 2019, parent company Anheuser-Busch InBev owns the remaining 90% of the company's equity.Bud APAC's largest markets are China (80% of 2020 revenue), South Korea (12%), and India (6%). The remaining 2% comprises Japan, New Zealand, and other export markets in the Asia-Pacific region. The company predominantly produces, imports, markets, distributes, and sells a portfolio of more than 50 beer brands, both owned and licensed, including global brands Budweiser, Stella Artois, and Corona along with multicountry brands and local brands such as Hoegaarden, Cass, and Harbin.

1 Matheson Street, Suites 3012-16, Tower Two, Times Square
Hong Kong, Hong Kong
Sector Consumer Defensive
Industry Beverages - Brewers
Most Recent Earnings Dec 31, 2019
Fiscal Year End Dec 31, 2021
Stock Type
Employees 25,737

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