- We lower our rating for SAB from BUY to OUTPERFORM and cut our target price (TP) by 2.7% as the company’s share price has advanced 6.4% over the past three months. Our lower TP is mainly due to a 5% decrease in our 2023F NPAT-MI vs our previous forecast. 

- For 2023F, we project revenue of VND39tn (USD1.6bn; +11% YoY) and NPAT-MI of VND5.7tn (USD241mn; 8% YoY). We forecast the growth in SAB’s top line to be driven by an improvement of its brand health and the company’s strong position in mainstream segment as we expect consumers to trade down and buy less during the economic slowdown. However, we assume that lower consumer spending and higher advertising & promotion expenses could negatively impact SAB’s earnings.

- For 2023-2025F, we forecast an EPS CAGR of 10% due to (1) resilient growth in beer consumption thanks to Vietnam’s favorable demographics, (2) an improvement in the product mix and (3) margin enhancement initiatives.

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