UBS: Slightly lowered the target price of BUD APAC (01876) to HKD 8.6, expecting a slowdown in sales recovery in China.

UBS released a research report stating that the target price for BUD APAC (01876) has been lowered from HK$8.75 to HK$8.6, maintaining a "buy" rating. BUD APAC's 2025 revenue and normalized EBITDA are expected to decline by 6.1% and 9.8% respectively, to $5.764 billion and $1.588 billion, which is below market expectations. As a result, the 2025 fourth quarter revenue and normalized EBITDA are expected to decline by 4.2% and 24.7% respectively, to $1.073 billion and $167 million. AB InBev's full-year normalized EBITDA profit margin contracted by 1.4 percentage points year-on-year, mainly due to a decrease in gross profit margin and an increase in sales, general, and administrative expenses (SG&A) ratio. Net profit for the period was $489 million, impacted by a one-time item related to a claim and tax matters from a Korean customs audit, which the bank believes is a one-time factor. UBS has raised its revenue forecast for AB InBev for the years 2026 to 2028 by 2% to 3%, mainly reflecting expectations of RMB appreciation. However, it is expected that the recovery in sales volume in the Chinese market may slow down or be delayed until the second half of 2026. At the same time, UBS has lowered its EBITDA forecast for 2026 to 2028 by 6% to 7% to reflect operational deleveraging and increased business investment, resulting in a decrease in EBITDA profit margin of 2.5 to 2.8 percentage points.