Beer sales are sluggish, and the giant Bud APAC is also anxious, bringing in a "firefighter" to serve as the president of the China region

After three years of vacancy, Budweiser China welcomes a new "helmsman." According to reports from the media outlet Xiaoshidai, Fabio Sala will serve as the president of Budweiser China, reporting directly to Jan Craps, the CEO of Budweiser APAC (01876.HK). Since entering the Chinese market in 1984, Budweiser Group has developed in China for forty years. In 1995, Budweiser established a brewery in Wuhan and currently operates over 30 breweries in China, managing more than 50 beer brands under Budweiser APAC, including Budweiser，时代， Corona, and Hoegaarden. China is the largest overseas market for Corona and Hoegaarden. Fabio Sala, 47 years old and from Brazil, has extensive experience in the beer industry and AB InBev. As early as 2001, he served as the sales director for a beer company under Brazilian beer giant Ambev (later merged into AB InBev). He has held various sales management positions, primarily in the South American and European markets. Since July 2020, he has been the president of AB InBev for the markets of Belgium, the Netherlands, France, and Luxembourg. Previously, through strategies of increasing brand investment and expanding dining channels, Fabio Sala helped boost the sales of 时代 beer in 2021 to levels seen before the pandemic in 2019, restoring the former glory of this well-known Belgian beer brand that had been declining since the 1970s. Additionally, Zhou Zhen, the Chief Sales Officer of Budweiser APAC China, will be promoted to Global Strategic Vice President of Budweiser Group; Liu Zhuxi, the president of Budweiser China's East China Division, will take over Zhou Zhen's position and report to the new president, Fabio Sala. Both Zhou Zhen and Liu Zhuxi have extensive experience within the Budweiser system. According to information, Zhou Zhen has served as Vice President of Strategy and Business Transformation for Budweiser APAC, Vice President of Business for the China Division, and President of Budweiser China's South China Division. Zhou Zhen's focus has been on expanding Budweiser China from the southeast and southern coastal areas to the inland, emphasizing the need to develop the ultra-premium segment as the next blue ocean for Budweiser China. Liu Zhuxi joined Budweiser Group in 2010 and has successively become responsible for the western, northeastern, southern, and eastern markets. The appointments of these core executives may be closely related to the significant decline in Budweiser APAC's performance in the Chinese market. In the first three quarters of this year, Budweiser APAC's beer sales, revenue, and net profit all experienced declines, with the Chinese market's revenue leading the downturn compared to other regions. According to Budweiser APAC's Q3 2024 financial report, in the first three quarters of this year, it achieved revenue of approximately $5.104 billion, a year-on-year decline of 6.1%; the profit attributable to equity holders decreased from $875 million in the first three quarters of last year to $742 million, with total sales declining by 8.1% to approximately 7.12 billion liters. The report pointed out that Budweiser APAC's performance in China in the first three quarters was affected by industry slowdowns, particularly the continued weakness in the dining channel, which significantly impacted the company's overall performance. Budweiser APAC stated that in Q3 2024, the Chinese beer industry showed signs of slowdown, with weak consumer willingness, especially in the dining channel, where foot traffic and consumption decreased, leading to a 14.2% drop in sales in the Chinese region Due to a high base and weak performance in the restaurant channel, which is the focus of Budweiser APAC's business, the company's revenue in the Chinese market decreased by 16.1%. Data released by the National Bureau of Statistics in mid-October showed that in the first nine months of 2024, the beer production of large-scale enterprises nationwide totaled 29.302 million kiloliters, a year-on-year decrease of 1.5%. Shenwan Hongyuan pointed out in a research report released on November 1 that the pressure on the restaurant channel is the main reason for the weak beer consumption. Not only Budweiser APAC, but several other listed beer companies have also performed poorly this year, especially in the third quarter. In the first three quarters of this year, Tsingtao Brewery's revenue fell by 6.52% year-on-year, with net profit slightly increasing by 1.67%; Chongqing Brewery's revenue increased by 0.26% year-on-year, while net profit decreased by 0.9%; Yanjing Beer’s revenue growth was less than 5% year-on-year. Cai Xuefei, an analyst in the liquor industry, stated in an interview with Time Finance that due to the overall economic weakness in the country, the contraction of the restaurant market, and the push of domestic beers into the high-end segment, Budweiser's performance, especially in the high-end market, has declined. In the short term, Sala's work in Budweiser's Western European region has been good, and this important personnel adjustment in Budweiser China aims to further promote its sales growth and business expansion in the Chinese market. Cai Xuefei also pointed out that the Chinese beer market is currently in a deep adjustment cycle, and Budweiser faces considerable pressure to maintain its competitive advantage in the high-end market. However, in the long term, Budweiser still has brand image, product structure, and channel advantages in the high-end beer market in China, and the new leadership can reorganize Budweiser's Asia-Pacific resources. Moreover, from the current information, Budweiser may further expand into new channels such as e-commerce beyond traditional restaurants and supermarkets, increasing brand market investment, which has positive value for Budweiser's continued efforts in the high-end beer market. Previously, several brokerages lowered Budweiser APAC's target price. Bank of America Securities lowered Budweiser APAC's target price to HKD 12 in August; Morgan Stanley lowered Budweiser APAC's target price to HKD 12.5 at the end of September, expecting its sales and profit momentum to continue improving, but pressure on its Chinese business may still exist. As of the close on November 8, Budweiser APAC's stock price rose slightly by 0.58%, closing at HKD 8.66 per share, with a total market capitalization of HKD 114.688 billion