Brewers The Chinese promise (full report released today)

In this note we are delving into the exciting prospects that the Chinese beer market has to offer. We are also updating our earnings forecasts for the brewers following the weakness in EM currencies

News published on September Thursday 24, 2015
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AB InBev Bud on tap (Neutral, TP EUR96 vs. 109)

Following the drop in the real and peso we are lowering our earnings forecasts, leading to a 12% lower fair value of EUR96.


 Carlsberg (Neutral, DKK519 vs. 629)

Strong in the West, but where is it going?

On the back of the further weakness in the Russian rouble and the Russian macro economic outlook, we have reduced our earnings forecasts and are now expecting a declining EBIT by respectively 4% and 10% for 2015 and 2016.  As a result of our review, we have lowered our price target by 17% to DKK519 (from DKK629).


Heineken (Buy Top Picks, EUR75 vs. 78)

Diversification pays off

We are lowering Heineken’s fair value by 4% to EUR75 from EUR78, following an update which takes into account the further weakening of some of emerging market currencies.  However, we find that because of the company’s diversification the impact is mitigated as some markets (currency and operations) are holding up very well.


SABMiller (Buy, 5000p vs. 4700)

A very special snowflake

Following an update of our model which takes into account the lower developing market currencies, we derive a standalone fair value of 3,300p. Adding the 1,700p of potential cost savings value and the bid premium from AB InBev (based on USD2.2bn of synergies), brings our total fair value of the company to exactly 5,000p.

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