Sabeco (HOSE: SAB) | Initiation Report, BUY, FW2026 Upside 25.7%

Market Leadership, Margin Recovery and Superior Cash Returns Dominant

Rating: BUY - Target price 57,500 VND/share (+25.7%)

We initiate coverage of Sabeco (SAB) with a BUY rating and VND57,500 target price, implying 25.7% upside. While Vietnam beer demand has remained subdued amid tighter drink-driving enforcement, we believe these headwinds are increasingly reflected in valuation. Our positive view is underpinned by SAB's resilient market leadership, premiumization-led mix improvement, strong pricing potential, and an exceptional balance sheet.

Investment Rationales

• Market leadership is intact; competitive gap narrowing. 
• Distribution remains a difficult-to-replicate competitive moat.
• Premiumization offers a structural margin lever.
• Net cash and >10% dividend yield provide downside support.

Valuation and Rating

We forecast FY26E NPAT-MI of VND4,798bn (+8.5% YoY) and a 6.8% CAGR over FY26E-FY28E, underpinned by moderate volume growth, pricing and premiumization, alongside gradual gross-margin expansion. Our forecasts remain conservative relative to the broader Vietnam beer market, reflecting our expectation that SAB's mature core portfolio will grow more slowly than the industry.

We apply a blended valuation approach, assigning equal weights 50%/50% to both DCF and P/E methodologies, which give us a FY26E Target Price of VND 57,500 per share. At VND45,750/share as of August 17, 2026, our target price implies 25.7% upside. Accordingly, we initiate coverage with a BUY rating on SAB.