Morgan Stanley has issued a research report adjusting its profit forecasts for CHINA FOODS (00506), lowering the 2025 profit estimate by 4% while raising the 2027 profit projection by 2%. The revision primarily reflects higher gross margin expectations, with the firm upgrading its gross margin forecasts for 2025-27 by 1.2 percentage points, driven by higher average selling prices following 2024 price increases and an elevated base effect.
The investment bank has raised its target price from HK$2.6 to HK$2.9, reflecting improved earnings projections for 2027 and beyond, while maintaining its "Underweight" rating on the stock.