Equity Analyst - Asia Consumer Sector, Investory

Devi Subhakesan

Equity Analyst - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Equity Capital Markets

Budweiser Brewing  APAC  / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/anheuser-busch-inbev-sa-nv" target="_blank" data-smartkarma-citation="entities:865:1" rel="noopener">Anheuser Busch Inbev Sa/Nv (ABI BB)</a> lived up to its reputation as master deal maker and pulled off an unanticipated Plan B, within a week of calling off the <a href="https://www.smartkarma.com/entities/budweiser-brewing-company-apac-limited" target="_blank" data-smartkarma-citation="entities:28077:1" rel="noopener">Budweiser Brewing Company APAC (1876 HK)</a> IPO, by announcing the sale of its Australian subsidiary to <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> for USD 11.3 bn. The deal values Carlton &amp; United Breweries (CUB), its Australian subsidiary, at 14.9X 2018 normalized EBITDA and will help raise more funds for AB InBev than the cancelled IPO. Notably, the valuation metric is not much higher than what we applied to <a href="https://www.smartkarma.com/entities/budweiser-brewing-company-apac-limited" target="_blank" data-smartkarma-citation="entities:28077:1" rel="noopener">Budweiser Brewing Company APAC (1876 HK)</a>'s Asia Pacific East assets (that include Australia) while arriving at an Enterprise value of USD50 bn for the company during IPO. Budweiser APAC's cancelled IPO pricing range had implied an EV/EBITDA of 21X - 24X 2018 (for the entire business). Reportedly, larger investors' reluctance to accept these valuations had led AB InBev to shelve the IPO. The Australia asset sale has effectively shown that investors were indeed right in their valuation of Budweiser APAC (See valuation table in the report below) and standing their ground on the same.AB InBev has left the door open for a potential Budweiser APAC (ex Australia) IPO at right valuation, according to the press release. Given it has already secured its immediate funding needs with the Aussie sale, it does not have a compulsive near term need to list Asia assets anymore. It has also stated it intends to accelerate its expansion into other fast-growing markets in the APAC region and globally. These could keep regional beer peers' valuations buoyant. We share the updated Beer Company Valuations comps in the note below. We also look at possible scenarios when AB InBev can successfully relaunch the Budweiser APAC IPO at valuations that meet their expectations, after having pulled it off once. Our earlier report <a href="https://www.smartkarma.com/insights/budweiser-apac-ipo-valuation-where-seller-s-need-meets-investor-s-willingness" target="_blank" data-smartkarma-citation="insights:30365" rel="noopener">Budweiser APAC IPO Valuation: Where Seller's Need Meets Investor's Willingness</a> had discussed challenges involved in pricing this IPO given seller's likely aggressive expectations.

Anheuser Busch Inbev Sa/Nv (ABI BB) lived up to its reputation as master deal maker and pulled off an unanticipated Plan B, within a week of calling off the Budweiser Brewing Company APAC (1876 HK) IPO, by announcing the sale of its Australian subsidiary to Asahi Group Holdings (2502 JP) for USD 11.3 bn. The deal values Carlton &amp; United Breweries (CUB), its Australian subsidiary, at 14.9X 2018 normalized EBITDA and will help raise more funds for AB InBev than the cancelled IPO. Notably, the valuation metric is not much higher than what we applied to Budweiser Brewing Company APAC (1876 HK)'s Asia Pacific East assets (that include Australia) while arriving at an Enterprise value of USD50 bn for the company during IPO. Budweiser APAC's cancelled IPO pricing range had implied an EV/EBITDA of 21X - 24X 2018 (for the entire business). Reportedly, larger investors' reluctance to accept these valuations had led AB InBev to shelve the IPO. The Australia asset sale has effectively shown that investors were indeed right in their valuation of Budweiser APAC (See valuation table in the report below) and standing their ground on the same.AB InBev has left the door open for a potential Budweiser APAC (ex Australia) IPO at right valuation, according to the press release. Given it has already secured its immediate funding needs with the Aussie sale, it does not have a compulsive near term need to list Asia assets anymore. It has also stated it intends to accelerate its expansion into other fast-growing markets in the APAC region and globally. These could keep regional beer peers' valuations buoyant. We share the updated Beer Company Valuations comps in the note below. We also look at possible scenarios when AB InBev can successfully relaunch the Budweiser APAC IPO at valuations that meet their expectations, after having pulled it off once. Our earlier report Budweiser APAC IPO Valuation: Where Seller's Need Meets Investor's Willingness had discussed challenges involved in pricing this IPO given seller's likely aggressive expectations.

AB InBev's Plan B - Aussie Asset Sales Price Validates Investor Valuation of Budweiser APAC

Japan

Asahi Holdings, Inc. is a holding company established by Asahi Pretec Corp. The Company collects and recycles precious and rare metals from dental, electronic and jewelry materials. Asahi Holdings engages in environmental protection business and offers total solutions for industrial waste treatment.

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Asahi Holdings (5857 JP)

AB InBev's Plan B - Aussie Asset Sales Price Validates Investor Valuation of Budweiser APAC

Anheuser Busch Inbev Sa/Nv (ABI BB) lived up to its reputation as master deal maker and pulled off an unanticipated Plan B, within a week of...

Devi Subhakesan

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