Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Q1 cost pressures surprised the market but the share price has already discounted the news</li>
<li>Underlying beer demand is solid as global economies recover from 2 years of Covid restrictions</li>
<li>Improving sales mix and higher prices should offset the cost pressures. With Asahi trading at the bottom of its valuation range, our glass is half full on the stock</li>
</ul>


Q1 cost pressures surprised the market but the share price has already discounted the news
Underlying beer demand is solid as global economies recover from 2 years of Covid restrictions
Improving sales mix and higher prices should offset the cost pressures. With Asahi trading at the bottom of its valuation range, our glass is half full on the stock


Asahi (2502 JP) | Is Your Glass Half Full or Half Empty?

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/asahi-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10482:1" rel="noopener">Asahi Group Holdings (2502 JP)</a>’s 1Q22 OP of ¥9.0bn from ¥496.9bn revenue was significantly below the consensus OP of ¥34.0bn from ¥489.4bn revenue.</li>
<li>Yet the company maintained its aggressive 2022 guidance, which expects domestic beer volume growth while prices are scheduled to increase by 6-10%.</li>
<li>We don’t find this estimate credible, especially given that Asahi generates most of the domestic revenue from the price-sensitive high malt beer segment.</li>
</ul>



Asahi Group Holdings (2502 JP)’s 1Q22 OP of ¥9.0bn from ¥496.9bn revenue was significantly below the consensus OP of ¥34.0bn from ¥489.4bn revenue.
Yet the company maintained its aggressive 2022 guidance, which expects domestic beer volume growth while prices are scheduled to increase by 6-10%.
We don’t find this estimate credible, especially given that Asahi generates most of the domestic revenue from the price-sensitive high malt beer segment.


Asahi: More Downside Left After Maintaining The Optimistic 2022 Guidance

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>On 5th May 2022, Thai Beverage announced that BeerCo will resume its Proposed Spin-off Listing. This time the company is aiming to raise less than US$1bn, as per media reports.</li>
<li>We have looked at various aspects of the deal earlier, as the company had tried to spin-off BeerCo in 2021 as well before finally calling it off in April 2021.</li>
<li>In this note we undertake a peer comparison and talk about valuations</li>
</ul>


On 5th May 2022, Thai Beverage announced that BeerCo will resume its Proposed Spin-off Listing. This time the company is aiming to raise less than US$1bn, as per media reports.
We have looked at various aspects of the deal earlier, as the company had tried to spin-off BeerCo in 2021 as well before finally calling it off in April 2021.
In this note we undertake a peer comparison and talk about valuations


ThaiBev BeerCo 2022 Pre-IPO - Peer Comp and Thoughts on Valuation

<ul>
<li>On 5th May 2022, Thai Beverage announced that BeerCo will resume its Proposed Spin-off Listing. This time the company is aiming to raise less than US$1bn, as per media reports.</li>
<li>We have looked at various aspects of the deal earlier, as the company had tried to spin-off BeerCo in 2021 as well before finally calling it off in April 2021.</li>
<li>In this note, we talk about the recent updates for BeerCo.</li>
</ul>


On 5th May 2022, Thai Beverage announced that BeerCo will resume its Proposed Spin-off Listing. This time the company is aiming to raise less than US$1bn, as per media reports.
We have looked at various aspects of the deal earlier, as the company had tried to spin-off BeerCo in 2021 as well before finally calling it off in April 2021.
In this note, we talk about the recent updates for BeerCo.


ThaiBev BeerCo Pre-IPO - Back for Another Round

<ul>
<li>
<a href="https://www.smartkarma.com/entities/asahi-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10482:1" rel="noopener">Asahi Group Holdings (2502 JP)</a> announced yesterday that it will raise the prices of a majority of its domestic beverage brands to pass the rising cost of raw materials to customers.</li>
<li>Although beers as a whole has a relatively inelastic demand, the price elasticity in different categories of beer varies quite a bit with high malt beers having highly elastic demand.</li>
<li>We think the price hike could be more detrimental to Asahi than its competitors as the company generates most of its domestic revenue from the price-sensitive high malt beer segment.</li>
</ul>



Asahi Group Holdings (2502 JP) announced yesterday that it will raise the prices of a majority of its domestic beverage brands to pass the rising cost of raw materials to customers.
Although beers as a whole has a relatively inelastic demand, the price elasticity in different categories of beer varies quite a bit with high malt beers having highly elastic demand.
We think the price hike could be more detrimental to Asahi than its competitors as the company generates most of its domestic revenue from the price-sensitive high malt beer segment.


Asahi Raises Domestic Beverage Prices: Elastic “Beer” Demand Makes the Price Hike Unfavourable

Japan

Asahi Group Holdings, Ltd. produces beer and other beverages including non-alcoholic drinks. The Company sells its products in Japan and overseas.

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Asahi Group Holdings (2502 JP)

Asahi (2502 JP) | Is Your Glass Half Full or Half Empty?

The share price now is trading at the bottom of the pre-covid valuation range. We are bullish due to two key catalysts: improving mix/price hikes...

Mark Chadwick

Asahi: More Downside Left After Maintaining The Optimistic 2022 Guidance

With gross profit depressed and Opex elevated due to increased advertising and sales promotion expenses in line with product renewals, we suspect...

Oshadhi Kumarasiri

ThaiBev BeerCo 2022 Pre-IPO - Peer Comp and Thoughts on Valuation

Thai Beverage recently announced that BeerCo will resume its Proposed Spin-off Listing. In this note, we talk about peer comparison and look at...

Sumeet Singh

ThaiBev BeerCo Pre-IPO - Back for Another Round

Thai Beverage plans to resume BeerCo's proposed spin-off listing. This time the company is aiming to raise less than US$1bn, as per media reports.

Sumeet Singh

Asahi Raises Domestic Beverage Prices: Elastic “Beer” Demand Makes the Price Hike Unfavourable

We think the price hike could be more detrimental to Asahi than its competitors as Asahi generates most of its domestic revenue from the more price...

Oshadhi Kumarasiri

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