- We lower our target price (TP) for SAB by 9.4% but reiterate our OUTPERFORM rating as the company’s share price has decreased 11.4% over the past three months. Our lower TP is mainly due to cutting our aggregate 2023-2024F NPAT-MI by 13% vs our previous forecast, which is partly offset by rolling our TP horizon forward from YE2023 to mid-2024. 

- For 2023F, we project revenue of VND33.2tn (USD1.4bn; -5.0% YoY) and NPAT-MI of VND4.9tn (USD209mn; -6.2% YoY). We forecast the revenue decline to be driven by weak consumer demand amid an economic slowdown, which was reflected in lower beer sales in Q1 2023. We expect SAB’s top line to experience a modest recovery in H2 2023 and a more meaningful rebound in 2024 as both the global and Vietnamese economy recover. In addition, we maintain our expectation for higher selling expenses/beer revenue as a result of intensified competition.

- We forecast a 2023-2025F EPS CAGR of 9% due to (1) medium-term resilient growth in beer consumption that is supported by Vietnam’s favorable demographics, (2) an improving product mix and (3) continuing margin enhancement initiatives.

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