Goldman Sachs: Raises target price for BUD APAC (01876) to HK$8.8 with expectations for sales recovery in the Chinese market.

Goldman Sachs released a research report stating that BUD APAC (01876) first quarter performance sales met expectations, with EBITDA exceeding market concerns. Sales at the group level and in the Asia-Pacific region increased by 0.1% and 1.7% respectively year-on-year. Management has reinstated sales growth at the group level as the top priority for 2026, with a focus on stabilizing sales in China. The target price has been raised from 8.5 Hong Kong dollars to 8.8 Hong Kong dollars, with a "buy" rating. The bank expects that the recovery of sales in the Chinese market in 2026 will be driven by several factors, including initial signs of accelerated premiumization in the first quarter, double-digit recovery in sales of ultra-premium products; strong double-digit growth in O2O channels in the first quarter, with a significant contribution to growth in home channels; and the company's continued investment in brand and replenishment channels to meet peak season and sporting events. However, the bank warns that the continuous pressure on Chinese restaurant channels remains a major drag, and the second quarter sales recovery path may be more volatile. Goldman Sachs has raised BUD APAC's sales forecast for 2026 to 2028 by about 2%, mainly reflecting currency updates, with the Chinese yuan appreciating by about 5% against the US dollar, partially offset by the South Korean won depreciating by about 3% against the US dollar, with sales outlook unchanged. Net profit forecast has been raised by 3% to 4%, mainly reflecting operational efficiency better than expected.