This article first appeared on GuruFocus.
Budweiser Brewing Co APAC Ltd. (BDWBF) shares moved lower, falling as much as 5.3%, after the company posted its sharpest profit contraction since 2020 a result that could reinforce concerns around the durability of China’s consumer recovery. Net income came in at $489 million, below the $602 million analysts had projected. Normalized net income declined 14% to $666 million, while normalized Ebitda dropped 9.8%. Beer volumes in China slid 8.6% in 2025, suggesting that operating leverage is moving in the wrong direction in what remains one of the group’s most critical markets.
Fourth-quarter revenue was $1.07 billion, down 6% year over year and broadly in line with expectations. Volumes in South Korea decreased by low single digits during the quarter, adding another layer of pressure across North Asia. Management acknowledged that 2025 performance in China was below its potential, with Chief Executive Officer Yanjun Cheng outlining steps to enhance the in-home route-to-market model, enrich the portfolio, and increase innovation behind its megabrands. Notably, the company continued to deliver strong growth in India, which could offer a degree of geographic diversification as China resets.
Looking ahead, leadership signaled a shift toward prioritizing top-line growth in China, with plans to increase commercial investments as a percentage of net revenue. At the same time, Chief Financial Officer Ignacio Lares emphasized financial discipline, noting that initiatives will be tested before being scaled. The upcoming transition to Bernardo Novick who previously held roles at parent Anheuser-Busch InBev (NYSE:BUD) and is set to replace Lares from April 2026 may also be pivotal as the company works to stabilize its China footprint in a deflationary consumer landscape. Over the past year, shares have risen 6%, trailing the Hang Seng Index’s 24% gain, a relative performance gap that could keep investor focus squarely on execution in the quarters ahead.