|Bid||5,334.00 x 0|
|Ask||5,336.00 x 0|
|Day's Range||5,320.00 - 5,380.00|
|52 Week Range||4,023.00 - 5,380.00|
|Beta (3Y Monthly)||0.19|
|PE Ratio (TTM)||16.06|
|Earnings Date||Nov 5, 2019 - Nov 8, 2019|
|Forward Dividend & Yield||108.00 (2.03%)|
|1y Target Est||6,030.80|
(Bloomberg Opinion) -- Hong Kong’s IPO market is unexpectedly coming back to life. It may be a brief revival.Companies from Anheuser-Busch InBev SA’s Asian unit to Megvii Technology Ltd. aim to raise more than $10 billion selling shares before the year is out. It’s a turnaround that appeared improbable as recently as mid-August, when the Hang Seng Index erased its gain for the year amid anti-government protests and concerns over weakening global growth.Hong Kong’s benchmark stocks gauge has bounced 8% since Aug. 13, among the best-performing indexes worldwide in that period, as traders bet that China’s government will try to buoy investor spirits in the run-up to Oct. 1, when the country celebrates the 70th anniversary of the founding of the People’s Republic. That’s created a window of opportunity for companies that previously struggled to generate enough investor interest.Budweiser Brewing Company APAC Ltd. is the prime example. The unit of AB InBev, the world’s largest brewer, pulled what would have been the world’s biggest initial public offering in mid-July after failing to draw sufficient demand for the $9.8 billion sale. The company is back with a pared-down $5 billion offering and aims to list by the end of September, Carol Zhong, Julia Fioretti, Jinshan Hong and Crystal Tse of Bloomberg News reported last week, citing people familiar with the matter.The brewer is seeking to list minus its Australian operations, which the company agreed to sell to Asahi Group Holdings Ltd. for $11.3 billion soon after withdrawing its IPO in July. That hived off a slower-growing part of its operations, which may help attract investors who balked at Budweiser Brewing’s valuation last time around.Other than a rising stock market, a simple technical reason may account for the brewer’s haste to try again. A company that seeks to list within six months of its first application doesn’t need to prepare a new set of accounts, meaning Budweiser Brewing can just strip the Australian operations from its financials when pitching to investors this time around.Others lining up at the IPO well include Megvii, a Beijing-based artificial intelligence startup that’s seeking $1 billion; consumer lender Home Credit NV, which is targeting as much as $1.5 billion; Chinese sportswear retailer Topsports International Holdings Ltd., which aims to raise about $1 billion; and ESR Cayman Ltd., a logistics real estate developer backed by Warburg Pincus that earlier shelved a $1.2 billion deal. The first to list of the current crop may be biotechnology firm Shanghai Henlius Biotech Inc., which has already started taking orders for a $477 million sale.The biggest flotation of all may come in October, when New York-traded Alibaba Group Holding Ltd. will seek to raise as much as $15 billion in a secondary listing, Reuters reported last month.The resurgence in the IPO market is a tonic for Hong Kong Exchanges & Clearing Ltd., which has faced skepticism over its $36.6 billion bid for London Stock Exchange Group Plc and whose shares have dropped 16% from this year’s high. Hong Kong has slipped in the pecking order of global stock exchanges after topping the rankings in 2018. Companies raised $10.8 billion in IPOs this year through Sept. 13, less than half of the total in the same period last year.The question is whether there will be enough investor demand to soak up all the stock that an eager and growing group of listing candidates is waiting to thrust on buyers. Meanwhile, Hong Kong’s economy is deteriorating and the protests haven’t gone away. Companies must also consider whether China’s feelgood efforts will extend beyond Oct. 1.Time may be of the essence for this crowd. To contact the author of this story: Nisha Gopalan at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Asahi Group Holdings Ltd. is already getting a headache from its $11 billion Australian foray.Japan’s biggest brewer, seeking to escape a slow-growing, aging market at home, is buying the Australian assets of Anheuser-Busch InBev NV, which owns iconic but low-priced beers such as Victoria Bitter. To do so, Asahi will double its debt load and issue about 10% more in new shares. That’s becoming a hangover for investors, who lopped $2 billion from the brewer’s market value on Monday.The deal is the latest in an overseas buying spree by Asahi, which picked up Fuller, Smith & Turner Plc’s brewing business for $330 million earlier this year and made a $11 billion push into Europe two years ago. The Japanese brewer, along with Kirin Holdings Co. and Sapporo Holdings Ltd., has seen domestic beer shipments decline for 14 straight years as fewer people reach legal drinking age. To stay ahead of rivals, Asahi now appears to be more willing to weigh down its balance sheet.“The question is whether Asahi can effectively manage the business, while improving profits and cash flows,” said Toshiyasu Ohashi, chief credit analyst at Daiwa Securities Group Inc., who added that Asahi’s credit profile will be hurt as debt grows faster than cash flow. “Can they generate synergies, and can they improve their financials after the deal?”Shares of Asahi dropped 8.9% in Tokyo trading on Monday, the biggest decline since 2011. The stock was up 18% this year before the deal with AB InBev was announced on Friday.Asahi said it’s securing a 1.2 trillion yen ($11.1 billion) bridge loan and selling 200 billion yen worth of shares to pay for AB InBev’s Melbourne-based Carlton & United Breweries. The Japanese brewer is already on the hook for about 1 trillion yen in interest-bearing debt. The company is betting that cash from the Australian business will help pay down debt. The purchase may lift Asahi’s per-share earnings by as much as 20%, according to SMBC Nikko Securities.There are already early signs of concern over Asahi’s creditworthiness. Moody’s Japan placed the company’s ratings on review for downgrade on Monday, saying the deal will “significantly raise Asahi’s financial leverage.” Rating & Investment Information Inc. said it would place the brewer on its rating monitor with a view to downgrading.A representative for Tokyo-based Asahi declined to comment on Monday.The timing of Asahi’s 200 billion yen share sale isn’t ideal, either. That figure represents about a fifth of total equity issued in Japan this year. Companies have issued 1.1 trillion yen of stock so far, down 43% from the same period last year, according to data compiled by Bloomberg.Asahi has been here before. In 2016, it agreed to buy European beers including Peroni, Grolsch and Pilsner Urquell in two transactions from AB InBev for about $11 billion. Since then, the Japanese brewer’s shares have climbed more than 30%, making it easier for Chief Executive Officer Akiyoshi Koji to justify the latest deal to shareholders.What Bloomberg Opinion Says“Asahi is paying a hefty price, almost 15 times the business’s $760 million of Ebitda in 2018. By comparison, Asahi, Kirin Holdings Co. Ltd. and Sapporo Holdings Ltd. trade on an average of about 11 times.”Andrea Felsted, consumer and retail columnistClick here to read the pieceAsahi said the Carlton purchase would give it greater access to distribution across the Australian market, letting it cross-sell its own brands, including Super Dry and Peroni. “Australia is an attractive market enjoying sustainable economic growth,” the brewer said in a statement.Tomonobu Tsunoyama, an analyst at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo, agreed. “It’s a mature market, but in terms of making money from premium brands, Australia is very similar to eastern Europe,” he said.Even so, total beer consumption in Australia has more than halved in the past four decades, to 84 liters per person a year, while lower-alcohol brews make up one fifth of the total. With total alcohol consumption declining, InBev had been pushing weaker ales on Australians.“The Australian market is very high margin, but very slow growth,” said Duncan Fox, a Bloomberg Intelligence analyst.Carlton’s portfolio of beers, which account for almost half the Australian market, has something for almost any palate. The collection is built on the 165-year-old Victoria Bitter, still portrayed as the brew of choice for hot and thirsty Aussie laborers, but also includes foreign brands such as Stella Artois and Beck’s. InBev has in recent years added craft beers including 4 Pines, which is made in the Sydney beachside suburb of Manly.Although Carlton fits with Asahi’s long-term strategy, it’s unlikely to deliver benefits beyond the continent, according to Naomi Takagi, an analyst at SMBC Nikko Securities.“The deal is unlikely to lead to expansion in other countries and thus synergies look thin,” Takagi wrote in a research note.(Updates shares, Australian market figures.)\--With assistance from Shiho Takezawa, Angus Whitley and Takashi Nakamichi.To contact the reporter on this story: Kantaro Komiya in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Rachel Chang at email@example.com, Reed Stevenson, Jeff SutherlandFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Moody's Japan K.K. has placed Asahi Group Holdings, Ltd.'s Baa1 issuer and senior unsecured ratings on review for downgrade. The rating action follows Asahi's announcement on 19 July 2019 that it had entered into a share purchase agreement with Anheuser-Busch InBev SA/NV (ABI, Baa1 stable) to acquire a 100% equity stake in ABI's Australian subsidiary CUB Pty Ltd, for a consideration of AUD16 billion (about JPY1.2 trillion) in cash. "This large, mostly debt-financed acquisition will significantly raise Asahi's financial leverage," says Moody's Vice President and Senior Credit Officer Motoki Yanase.
(Bloomberg Opinion) -- Foster’s: Australian for debt reduction. That may not be the advertising strapline owner Anheuser-Busch InBev NV would choose for the lager, but it should be. On Friday, it agreed to sell Carlton & United Breweries, the maker of Foster’s and Victoria Bitter, to Japan’s Asahi Group Holdings Ltd. for $11.3 billion.The sale proves that AB InBev has other ways to make a dent in its more than $100 billion of borrowings after it embarrassingly pulled the initial public offering of its Asian arm last week. Shares of the Leuven, Belgium-based brewer rose 5% on Friday.Asahi is paying a hefty price, almost 15 times the business’s $760 million of Ebitda in 2018. By comparison, Asahi, Kirin Holdings Co. Ltd. and Sapporo Holdings Ltd. trade on an average of about 11 times. While the brewery is highly profitable, it is growing at a slower rate than AB’s other operations in the region.The IPO would have raised up to $10 billion. So the sale effectively does the same job in terms of cutting borrowings. According to analysts at Jefferies, net debt should fall to $87 billion at the year-end. That would equate to 3.9 times Ebitda, allowing AB InBev to meet a key debt-reduction target a year early.There will of course be the loss of earnings, but in the context of the AB InBev’s $22.1 billion of Ebitda in 2018, that should be easily managed. Duncan Fox, an analyst at Bloomberg Intelligence, says the proceeds could quickly be reinvested in businesses in faster-growing Asian markets such as China or India. That might offset the progress on deleveraging, but would be no bad thing.By shedding the Australian business and adding faster growing units, AB InBev could make its Asian division more attractive to investors. They balked at the valuation – about $60 billion – last time.On Friday, the group said that the IPO was still a possibility. But it’s hard to see why investors would be willing to pay a higher price if it came back to the market in its current form.Rejigging the Asian operation – by, for instance, offloading the Korean and Japanese units – would make it more focused on China and other faster-growing markets. That might persuade investors to ascribe a higher value to the unit next time round.In AB InBev’s case, spilling some of the Amber Nectar isn’t such a bad thing.To contact the author of this story: Andrea Felsted at firstname.lastname@example.orgTo contact the editor responsible for this story: Edward Evans at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
As soon as supermarket manager Cho Min-hyuk got to work the day after Tokyo imposed curbs on exports to South Korea, he pulled all Japanese products off the shelves. It was Cho's way of taking a stand against Japan in a quickly worsening political and economic dispute between the two east Asian neighbours.
(Bloomberg Opinion) -- Anheuser-Busch InBev NV is pushing its luck as it prepares to sell shares of its Asian business in what may be the region’s biggest initial public offering this year. At as much as $64 billion, the brewer’s valuation of the operation will certainly test investors’ thirst for a taste of the Chinese brewing market.Carving out Budweiser Brewing Co. APAC Ltd., as the business is known, makes sense. Analysts reckon AB InBev’s market capitalization doesn’t reflect the division’s full value. A listing should attract a dedicated following and, hopefully, a higher valuation from investors. Above all, selling a stake on the stock market would raise cash: the brewer needs to cut net debt – which stands at almost five times Ebitda – following its 2016 takeover of rival SABMiller.It looks likely that BBC APAC would go public with negligible borrowings. Net debt fell from $1.5 billion to $819 million last year. In that case, the valuation at the top end of the mooted range would equate to 22 times the business’s Ebitda for 2019 as estimated by analysts at Jefferies. A strong performance this year, would change matters. But as things stand, the valuation looks punchy.BBC APAC runs at two speeds: A sparkling west Asian side, which includes China, and a less bubbly east Asian business comprising Australia, Japan and South Korea. Each arm contributed roughly equal amounts of Ebitda last year.Valuing the more mature eastern side, whose Ebitda is increasing organically at 3% annually, is relatively easy. Jefferies puts the figure at about 10 times Ebitda, implying a valuation of roughly $15 billion, which feels about right. Asahi Group Holdings, Kirin Holdings Co. Ltd. and Sapporo Holdings Ltd. trade on an average of 11 times.The argument will be over the right number for the faster-growing piece. There, organic Ebitda growth was 23% last year. To justify the highest price AB Inbev is putting on the whole business would mean valuing that bit at about $49 billion – or almost 30 times estimated Ebitda.Only a handful of brewers in emerging markets command such a steep valuation – think of India’s United Breweries Ltd. Pricing comparably looks ambitious.The political turmoil in Hong Kong adds uncertainty. That said, Asian IPOs have performed relatively well in 2019, which tends to fuel further demand.The saving grace is that the company will offer singular exposure to the expansion of the Chinese brewing market in a very liquid stock. By the same token, BBC APAC will have both the paper currency and the balance sheet to attempt M&A in the region. Even so, investors should be wary of pricing in those benefits before they have been realized.To contact the author of this story: Chris Hughes at firstname.lastname@example.orgTo contact the editor responsible for this story: Edward Evans at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
For generations, Czechs have consumed world-beating volumes of beer in the smoky, wood-panelled rooms of their local pubs, all but indistinguishable from each other bar the brand of lager flowing from the taps. Czechs are increasingly shunning fusty old watering holes and draft beer sales are sliding, so the world-famous brewers of pilsner are looking to inject some pizzazz into the traditional pub and attract younger patrons looking for a hip, modern feel. People like Marcel are the kinds of drinkers with disposable income that breweries such as Plzensky Prazdroj, the maker of Pilsner Urquell, are seeking to lure back with new concept bars designed to recharge the traditional Czech pub.
** Embraer SA has signed the "master transaction agreement" for a tie-up with Boeing Co and called a shareholder assembly for Feb. 26 to approve the partnership, the Brazilian planemaker said in a securities filing on Thursday. ** Evergrande Health Industry Group Ltd will pay 1.06 billion yuan ($156 million) for a majority stake in an automobile battery maker based in China, the firm said on Thursday, as it pieces together its electric vehicle production chain. ** China Three Gorges halted talks with EU regulators about its proposed 9 billion euro ($10.3 billion) takeover of Portugal's EDP-Energia de Portugal over a month ago, two sources close to the matter said, casting doubt on whether the deal will progress.
The purchase, worth 250 million pounds including debt, raises Asahi's British presence by adding London Pride ale, Frontier lager and Cornish Orchards cider to its Asahi Super Dry, Peroni Nastro Azzurro and Meantime brands. Fuller's shares jumped 21 percent to 1100 pence on Friday, their highest level in 19 months, after Asahi's move, which follows Japanese Prime Minister Shinzo Abe voicing his concerns over the risk of a disorderly British exit from the European Union in March and its impact on business. Asahi plans to continue operations at the Griffin Brewery in Chiswick, London, where beer has been made since 1654, while a long-term supply agreement and strategic alliance between the firms will allow Fuller's pubs to continue to sell its beer.
Moody's Japan K.K. has upgraded the long-term issuer and senior unsecured ratings of Asahi Group Holdings, Ltd. to Baa1 from Baa2. At the same time, Moody's has changed the ratings outlook to stable from positive. "Asahi's leverage has fallen faster than our initial expectations," says Motoki Yanase, a Moody's Vice President and Senior Credit Officer.