- We attended SAB’s annual general meeting (AGM) in HCMC on April 24, 2025.
- Shareholders approved the company’s 2025 guidance, including gross revenue of VND44.8tn (USD1.8bn; +9% YoY), net revenue of VND31.6tn (USD1.3bn; -1% YoY), and NPAT of VND4.8tn (USD193mn; +8% YoY). SAB noted that the 2025 guidance approved at the AGM was set before the announcement of US reciprocal tariffs. As such, the potential impacts of these tariffs are not reflected in the guidance. The net revenue and NPAT targets are equivalent to 98% and 97% of our respective full-year forecasts. We see potential downside risks to our 2025F forecasts, pending a more comprehensive review.
- The AGM approved a FY2024 cash dividend of VND5,000/share (10% yield). SAB paid VND2,000/share in 2024 and plans to pay the remaining amount of VND3,000/share on July 31, 2025 (record date: July 1, 2025). Shareholders also approved FY2025 cash dividend guidance of VND5,000/share (10% yield).
1. 2025 guidance:
* Revenue and earnings targets: Gross revenue YoY growth (including excise tax excluding sales deductions) reflects management’s expectations for both beer sales volume and average selling price (ASP) growth. Reported net revenue, however, is guided to decline slightly YoY due to the elimination of marked-up revenue from an excise tax on volume purchased from Sabibeco. This follows SAB's consolidation of Sabibeco as a subsidiary in January 2025 (vs its former status as an associate).
* Input costs:
- Malt: SAB used up nearly all of its over-hedged, high-cost malt by the end of Q1 2025. Management expects malt prices to normalize YoY in 2025.
- Aluminum: Prices have been trending downward post-tariff announcements. SAB has taken advantage of this environment to hedge aluminum prices for a certain volume.
- Overall, the developments in input prices, in addition to the positive impacts of the consolidation of Sabibeco, may support YoY GPM improvement in 2025.
* A&P spending: Management remains committed to efficient A&P spending but retains flexibility to increase it at least in line with the industry’s A&P growth rate to remain competitive.
2. Market dynamics:
* Consumer preferences:
- SAB sees a growing consumer preference for lower-alcohol beers, though demand for zero-alcohol options remains limited. SAB currently offers several lower-alcohol products, including 333 Pilsner, Lac Viet, and Saigon Chill.
- SAB has a recipe for a zero-alcohol beer, and may consider launching it when market conditions are favorable. At present, the zero-alcohol segment remains small in Vietnam’s beer market.
* Premiumization strategy: While SAB does not plan to launch new premium products to directly compete with international brands such as Heineken, Carlsberg, and AB InBev, the company aims to move up drinkers within its existing portfolio. Per SAB, Saigon Lager is the number one beer brand in Vietnam, which presents opportunities for the company to move drinkers of Saigon Lager up to consume higher price beer brands such as Saigon Special, 333 Pilsner, and Saigon Chill.
3. Excise tax hike:
* Proposal: SAB has been working with the Vietnam Beer-Alcohol-Beverage Association (VBA) to advocate for an excise tax rate in line with option 1 proposed by the Ministry of Finance (70%/75%/80%/85%/90% in 2026/27/28/29/30) and a one-year delay in implementation, starting from 2027 instead of 2026 (in line with the Ministry of Finance’s recent suggestion).
* Potential impacts: Based on observations for global beer markets, SAB sees that higher excise tax rates typically lead to a drop in beer consumption. In addition, the company plans to fully pass on the increased excise tax to consumers, aligning with the Government’s intent to curb alcohol consumption.
4. Sabibeco:
* Management outlined three key benefits from the acquisition of Sabibeco, including (1) access to Sabibeco’s capacity, especially aluminum can capacity, with six strategically located factories, (2) GPM improvements through consolidation, and (3) the addition of the Sagota beer brand (Sabibeco’s economy brand).
* Restructuring progress: The restructuring process began in January 2025. SAB personnel have taken on key roles within Sabibeco, and Sabibeco’s factories are switching to adopt SAB’s production standards. SAB aims to complete the restructuring by end-2025.
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