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Asahi Group Holdings Ltd 2502

Rating as of

Morningstar’s Analysis

Currency in JPY
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Economic Moat


Capital Allocation


Asahi's Appointment of new CEO a Step to a True Global Company; CUB Lifted Earnings

Jeanie Chen Senior Equity Analyst

Analyst Note

| Jeanie Chen |

Narrow-moat Asahi beat its full-year profit target as expected but the core business profits came in 10% above of our estimate (14% above the guidance) thanks to solid performance posted by newly consolidated Carlton United Breweries, or CUB. Management guides to nearly 30% growth in the core business operating profits for 2021, anticipating gradual recovery of on-trade demand from the second quarter. We have fine-tuned our forecasts after rolling to the new fiscal year, which has an immaterial impact on our fair value estimate of JPY 5,100. Our operating profit estimate for 2021 is a touch above the company’s guidance. The attempts to build a new low-alcohol market in Japan and launch an innovative beer product in a can which serves as a beer mug will be key developments to watch in the domestic market. We consider that Asahi’s moat, along with favorable taxes on beer, will support its efforts to cease the downward trend. We view shares as undervalued, trading at a 13% discount to our fair value estimate.

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Company Profile

Business Description

Asahi is a leading brewer in Japan with a more than 35% market share by volume, led by its Asahi Super Dry beer brand. It also operates a wide range of acholic and soft beverage products as well as packaged foods, mainly in Japan. It has made inroads into Europe through acquisitions of SABMiller’s brands including Peroni and Pilsner Urquell in Western and Central Europe in 2016 and 2017. Australia and East Asia, including China, are the other overseas markets where Asahi is growing. Overseas business represents about 40% of group sales and half of EBITDA after consolidation of Carlton United Breweries, or CUB.

1-23-1, Azumabashi, Sumida-ku
Tokyo, 130-8602, Japan
T +81 356085126
Sector Consumer Defensive
Industry Beverages - Brewers
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2019
Stock Type
Employees 36,699