Goldman Sachs: Maintains "Buy" rating on BUD APAC (01876), cuts target price to HK$6.55; China market recovery to take longer

Goldman Sachs released a research report maintaining a "Buy" rating on BUD APAC (01876) and cutting its 12-month target price from HK$6.9 to HK$6.55. The bank noted that the company's third-quarter sales performance was better than the market's prior concerns, but EBITDA performance was weaker, mainly affected by weak sales volume and margin pressure in China. After attending the company's earnings conference call, the bank said management reiterated that at this stage the priority is to stabilize sales volume and market share in China before considering profit improvement, and acknowledged that given the weak industry and soft demand sentiment, market recovery will take longer than previously expected. The bank noted that China's beer industry sales volume fell by a high single-digit percentage year-on-year in the third quarter, with demand remaining weak in October. Although channel destocking has made progress, management expects further adjustment will still be needed in the near term. On costs, management said that from the fourth quarter through 2027, the China and South Korea markets may face raw material cost headwinds, especially rising aluminum prices, and the company currently has no plans to raise prices in the China and South Korea markets. In South Korea, despite weak industry growth momentum, the company continues to gain market share; in India, benefiting from premiumization and market share gains, the company continues to maintain double-digit sales volume growth. The bank raised its 2026 sales forecast for the company by 0.4% and lowered its 2027-2028 sales forecasts by less than 1%; it raised its 2026 net profit forecast by 1.4% and lowered its 2027-2028 net profit forecasts by 5.8% to 7.1%. The bank currently expects the company's 2026 sales, normalized EBITDA and recurring net profit to be US$5.67 billion, US$1.41 billion and US$579 million, respectively.