- We lower our target price (TP) by 6.7% but reiterate our OUTPERFORM rating as we believe that SAB is well positioned to capture long-term growth in Vietnam’s beer consumption due to its strong brands and extensive distribution. 

- Our decreased TP is mainly due to our 6.9% lower aggregate 2023F-24F NPAT-MI forecast (respective cuts of 6.6%/7.3% for 2023/24F), which is contributed by (1) 2.4% lower aggregate 2023F-24F revenue as we expect weaker consumption for the on-premise channel and (2) 8.0% lower aggregate 2023-24F EBIT due to higher input costs and selling & administrative (SG&A) expenses. 

- We forecast a 2023-25F EPS CAGR of 12.1% due to (1) a rebound of beer consumption from a low base in 2023F as consumer spending recovers after the economic slowdown in H1 2023, (2) an improving product mix with a more significant contribution from the mass premium segment resulting from the robust growth of Vietnam’s middle and affluent class, and (3) headroom for margin improvement and cost optimization that will improve profitability.   

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