Original title: Credit Suisse: Raising Budweiser Asia Pacific's (01876) target price to HK$26, maintaining a “neutral” rating Source: Zhitong Financial Network

The Zhitong Finance App learned that Credit Suisse has now raised the target price of Budweiser Asia Pacific (01876) from HK$22.8 to HK$26, maintaining its “neutral” rating.

According to a research report published by Credit Suisse, Budweiser Asia Pacific's second-quarter sales fell 10.2% year on year, and EBITDA fell 17.2% year on year. The extent of loss has improved since the first quarter. At the same time, sales were generally in line with Credit Suisse's market expectations for the company, and EBITDA performance exceeded market expectations.

Credit Suisse pointed out that the main reason for Budweiser Asia Pacific's business recovery in the second quarter was the improvement in demand in the mainland beer market, including sales growth from May to June, effective cost control, and expansion of local production, which all had a positive impact on Budweiser's second-quarter results. Currently, Budweiser maintained a double-digit growth trend in the domestic ultra-high-end beer brand market. On the Korean side, demand in the beer market recovered slowly, but market share continued to grow month-on-month.

Credit Suisse believes Budweiser Asia Pacific's growth momentum will continue. Currently, due to favorable factors related to Budweiser's healthy inventory levels in the Asia Pacific market and the successive recovery of nighttime channels, Credit Suisse believes that the company's sales and EBITDA will rise 5.4% and 13.2% year-on-year respectively in the second half of the year. As the company benefits from higher profit margins brought about by cost control and local production, Credit Suisse is currently raising Budweiser Asia Pacific's 2020 to 2021 EBITDA forecast by 5% to 7%, and the target price has been raised from HK$22.8 to HK$26, maintaining a “neutral” rating.