Morgan Stanley has released a research report indicating that the management of China Res Beer (00291) holds a cautiously optimistic view of the company's prospects for 2026. The report noted that both beer sales volume and average selling price recorded positive growth in the first two months of this year. Management aims to achieve mid-single-digit growth in average beer price and moderate volume growth for the year, with gross profit margin expected to remain flat, primarily driven by premiumization efforts to offset rising raw material costs. Morgan Stanley has lowered its target price for China Res Beer from HK$36 to HK$35, which corresponds to a projected 2026 price-to-earnings ratio of 16 times and an enterprise value to EBITDA margin of 11 times. The bank forecasts a compound annual growth rate of 9% for recurring earnings from 2025 to 2027, with a price-to-earnings growth ratio of 1.9 times, and maintains an "Overweight" rating. Morgan Stanley has made minor adjustments to its profit forecasts for China Res Beer, raising net profit projections for this year and next by 1% to 3%, mainly reflecting operational expense savings. The bank anticipates a 10% growth in recurring operating profit this year and a 9% increase in recurring net profit, supported by a 5% rise in beer sales, a 9% growth in recurring operating profit, and a slight reduction in recurring operating losses from the spirits segment.