CICC has released a research report indicating that, considering BUD APAC may moderately increase investments, it has lowered its 2026 EBITDA forecast by 7.1% to US$1.593 billion and introduced a 2027 EBITDA estimate of US$1.637 billion. The current share price corresponds to 2026/2027 EV/EBITDA multiples of 6.5x and 6.2x, respectively. Supported by the dividend yield, the firm maintains its target price of HK$9.80 per share, which equates to 2026/2027 EV/EBITDA multiples of 8.6x and 8.4x, suggesting a potential upside of 25.2% from the current price. An Outperform rating is reaffirmed. CICC's primary views are as follows:
Fourth-quarter 2025 results were largely in line with expectations. The company reported its 2025 performance: In Q4 2025, revenue/volume/average selling price (ASP)/EBITDA decreased year-on-year by 4.2%/0.7%/3.5%/24.7%, respectively (all figures represent organic growth rates). Specifically in China, revenue/volume/ASP/EBITDA fell by 11.4%/3.9%/7.7%/42.3% year-on-year. The ongoing performance adjustment aligns with expectations.
In China, weak demand combined with deepening channel adjustments continued to pressure volume, price, and profits in the short term during Q4 2025. Volume in China declined by 3.9% year-on-year, primarily due to persistent weakness in key channels such as food service and nightlife venues. Regarding ASP, China's average selling price decreased by 7.7% year-on-year in Q4, mainly because of increased investment in the off-trade channel and a shift in product mix towards lower-priced segments as the off-trade channel's proportion grew. On profits, while the company benefited from some raw material cost reductions and operational optimizations, EBITDA in China dropped by 42.3% year-on-year, affected by rigid operating leverage, allocated headquarters marketing expenses, and reduced government subsidies.
In other regions, India maintained its growth trajectory, while South Korea awaits a profit recovery. In the Eastern Asia region, volume declined by 1.3% year-on-year in Q4 due to weak consumer sentiment in South Korea and a high base from the same period last year. ASP in Eastern Asia increased by 2.5% year-on-year in the quarter, benefiting from price increases on core categories in Q4 2025 and the continued positive impact of premium segment price hikes from 2024. EBITDA for Eastern Asia decreased by 9.8% year-on-year in Q4, influenced by allocated headquarters expenses and employee salary adjustments in South Korea. Additionally, the company's Indian market sustained strong growth through ongoing structural upgrades, partially offsetting pressures from China.
According to company announcements, BUD APAC has prioritized growth for 2026 and is adopting a more proactive stance to address market challenges. With the on-trade channel's share already at a historically low level, further significant declines are limited. A recovery in on-trade channels could allow BUD APAC to demonstrate stronger resilience than the broader industry. CICC believes that, supported by a bottoming macroeconomic environment and the company's active strategic adjustments, BUD APAC is expected to achieve a steady stabilization in 2026.
Risks include a slowdown in premiumization trends leading to underwhelming high-end growth, rising costs, and intensified market competition.