Morgan Stanley raised its target price for Budweiser Brewing (BUD APAC)(01876) to HK$31 from HK$28 and maintained its "overweight" rating.
The research house said BUD recorded mid-single-digit volume growth in May and June in China, and also recorded its highest monthly volume on record in China with healthy channel inventory.
Morgan expects a gradual recovery in the nightlife channel (80% opening rate as of the end of June, versus 90% in the restaurant and 100% in in-home channels) to support high-single-digit volume growth with an improvement in pricing in 2H.
Morgan increased its 2021-22 reported earnings by 4-5% and normalized EBITDA by 3-4%, respectively, factoring in stronger-than-expected recovery.
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