Budweiser Asia Climbs in Debut -- WSJ

By Yifan Wang 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 1, 2019).

Shares of the world's largest brewer's Asian operations climbed in their trading debut on Hong Kong's stock exchange Monday, joining the ranks of other richly valued regional beer companies.

Budweiser Brewing Co. APAC Ltd.'s shares opened slightly above their initial public offering price after the unit of Anheuser-Busch InBev SA raised $5 billion from the share sale. The shares closed at 28.20 Hong Kong dollars (US$3.60), about 4.4% higher than their IPO price of HK$27 a share, giving the business a market capitalization of roughly $47 billion.

The company, also known as Budweiser Asia, last week priced its shares at the lower end of an earlier indicative range, pulling off a slimmer IPO about two months after shelving a much larger share sale. Still, the $5 billion raised by Budweiser Asia made it, so far this year, Hong Kong's largest IPO and the world's second-largest, after U.S. ride-hailing company Uber Technologies Inc.'s $8.1 billion New York listing in May, according to Dealogic. The funds will be used by AB InBev to reduce debt.

Euan McLeish, a senior research analyst at Sanford C. Bernstein, said an earlier poll indicated most investors were willing to pay a little more than Budweiser Asia's listing price, which enabled the shares to trade higher Monday.

"We are not expecting it to go up at a rapid rate," Mr. McLeish said, adding that investors might find Budweiser Asia shares attractive in "turbulent times." The consumer staples sector, which includes companies that make food, beverages and other everyday essentials, tends to perform in a fairly predictable manner in good and bad economic conditions.

Analysts said Budweiser Asia's stock could, in the future, also be used as currency for acquisitions of other beer businesses.

Budweiser Asia, which sells its namesake beer as well as Corona, Stella Artois and other brands in the region, is now worth more than Japan's Asahi Group Holdings Ltd., Denmark's Carlsberg A/S and local rival China Resources Beer (Holdings) Co. At their IPO price, Budweiser Asia shares implied a price-earnings multiple of 37 times estimated 2020 earnings, according to Mr. McLeish.

In mid-July, Budweiser Asia called off a $10 billion IPO attempt due to lukewarm investor response. Later that month, it sold its Australian unit and came back to the market in early September as a smaller and faster-growing company that draws most of its sales from China, South Korea, India and Vietnam.

(END) Dow Jones Newswires

October 01, 2019 02:47 ET (06:47 GMT)

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