We joined SAB's online investor briefing on February 8. Our key takeaways from the meeting broadly align with our expectations for (1) growth of demand to be impacted by economic headwinds, (2) higher material costs potentially slowing the improvement of profitability and (3) higher advertising and promotion (A&P) expenses amid expected intensified competition in 2023F.

Solid sales revenue growth momentum to continue in 2023. Based on SAB’s 2022 results, management believes the company gained market share thanks to an improvement of brand awareness via effective marketing strategies (e.g., billboards, musical festivals and on-trade promotions). SAB states that it sustained its market share in the economy and mainstream segments while the sub-premium segment’s growth outperformed. Moreover, SAB solidified its position and market share in northern Vietnam. In 2023, SAB expects a slowdown of consumer demand due to global economic headwinds — especially in H1 2023. However, management expects this negative effect will be partly offset by (1) SAB’s strong position in the mainstream segment as consumers are expected to trade down, and (2) ample growth headroom as sales volume in 2022 remained under the pre-COVID level in 2019.