Our target price for Efes is 262 and is based on SOTP valuation for soft drinks (50.2% stake in CCI) and beer business. For CCI, we apply 7x target 2025e EV/EBITDA. For beer business, we apply 5x target 2025e EV/EBITDA to business ex Russia and 4x to the Russian business.    

We see the following are risks to investment case and target price: (1) Loss of business in Russia; (2) Macro in Russia  – most of international beer sales are generated from Russia. Worse economic prospects could drive lower-than-expected volume figures, (3) Regulations – Both Turkish and Russian beer markets have been under pressure from governments tightening alcohol regulations and higher excise taxes. Further tightening of these regulations could result in downside/upside for beer volumes, (4) Input cost pressures.