The regional unit of the world's biggest brewer, AB InBev's Budweiser Brewing Company, also known as Budweiser Asia, which sells its namesake beer, Corona, Stella Artois and other brands in the region, raised HK$39.20 billion ($5 billion) from its second try at an initial public offering (IPO) in Hong Kong giving the company a market capitalization of around $47 billion.
Opening at HK$27.40, it came as high as HK$28.90 before closing at HK$28.20 making Budweiser Asia now worth more than Japan's Asahi Group Holdings Ltd., Denmark's Carlsberg A/S and China Resources Beer (Holdings) Co.
Because 262 million Budweiser Asia shares changed hands, it is now the most actively traded stock in Hong Kong, advancing the city's Hang Seng Index by 0.5%.
Though the stock is not cheap at the initial offer price, Castor Pang, head of research at Core Pacific Yamaichi International, noted that it was not going to drop under that level because the offering's underwriters are going to keep that support.
However, he also noted that the stock is also unlikely to go up unless there is a development in the broader market sentiment.
Euan McLeish, a senior research analyst at Sanford C. Bernstein, in an earlier poll, said that most investors were willing to pay a little more than Budweiser Asia's listing price.
Analysts at Bernstein Research confirmed that Budweiser Brewing is the "highest quality consumer stock in China, if not Asia-Pacific."
They also added that the $27 offer price is a valuation that is 20.2 times the company's enterprise value over its earnings before amortization, depreciation, interest, and tax and that the brokerage saw an upside of 9% over a year from that level.
This stock price "carefully" weeded out investors looking for "a quick buck" and enticing long-term investors instead.
Subscribing to $1 billion of shares as a cornerstone investor in Budweiser Brewing's Hong Kong IPO is Singaporean sovereign wealth fund GIC Private.
The funds will be getting used by AB InBev to reduce debt acquired by buying rival SABMiller.
Though Budweiser Brewing's offering is smaller than the $9.8 billion issues it attempted in July, its IPO in Hong Kong's largest so far for 2019 and the second-largest IPO ever after the ride-hailing company Uber.
The company's offering doesn't include its Australian operations which it is selling to the Japanese brewer Asahi Group Holdings.
At the time of the IPO launch, Budweiser APAC CEO Jan Craps said that the company is "focused on growth" citing that Asia is the largest beer market with "a lot of opportunities."
He also added that the biggest markets in the region are China, South Korea, India, and Vietnam.
