Key Takeaways:
- Normalized Q1 EBITDA of $463 million beats estimates by 2 percent.
- Strong India sales volume growth drives outperformance in APAC's eastern region.
- China market revenue falls 4 percent, with EBITDA dropping 10.9 percent.
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Budweiser Asia Q1 EBITDA Beats by 2% Despite China Weakness
Budweiser Brewing Company APAC Ltd. (1876.HK) reported a 2 percent beat on first-quarter normalized EBITDA, which reached $463 million, even as it navigated a sales decline in its core China market.
"The beat was mainly driven by strong performance in the eastern APAC region," Jefferies said in a research note, maintaining a Buy rating and HKD 9.4 price target on the stock.
The brewer's overall sales topped estimates by 3 percent, fueled by significant volume growth in India. This strength offset a 4 percent revenue decline and a 1.5 percent volume drop in China, where the company increased investments in marketing and wholesaler support. Consequently, normalized EBITDA in China fell 10.9 percent year-over-year.
The results highlight a diverging performance across the region, with new growth markets compensating for persistent weakness in China. Management noted the sales decline in China has narrowed from the previous quarter, suggesting a slight improvement in market conditions.
The performance in China mirrors a broader trend seen by parent company Anheuser-Busch InBev, which cited sluggishness in the country as a drag on its global results. AB InBev's overall volumes returned to growth for the first time since 2023, buoyed by demand in South America and Mexico.
For Budweiser Asia, the focus remains on stabilizing the Chinese market while capitalizing on high-growth opportunities in countries like India. The company's increased spending in China is aimed at supporting wholesalers and promoting brand activities in at-home and emerging channels.
The 10.9 percent EBITDA decline in China shows the cost of this increased investment. Investors will be watching closely to see if the strategy can reverse the volume decline in the coming quarters. The company's next earnings report will be a key indicator of progress.
This article is for informational purposes only and does not constitute investment advice.
[1] Jefferies: BUD APAC (01876.HK) 1Q Normalized EBITDA Beats; Strong India Sales[2] Budweiser Brewing Company APAC Limited (BDWBY) Q1 2026 Earnings Call Transcript[3] China's carmakers chase 'Yaris moment' to ignite overseas growth[4] AB InBev returns to growth as it cheers better beer sales[5] AB InBev Volumes Return to Growth on Resilient Beer Demand
