CICC has released a research report adjusting its forecasts for IFBH. Due to the base effect impact from Innococo in 2025, the firm has lowered its net profit estimates for IFBH for 2025, 2026, and 2027 by 12.2%, 11.6%, and 11.7% respectively, to $23.34 million, $29.90 million, and $34.90 million. At the current share price, the stock is trading at a 2026/2027 P/E ratio of 17.1x and 14.6x. CICC has reduced its target price by 11.36% to HK$19.5, which corresponds to 2026/2027 P/E ratios of 22.4x and 19x, implying a potential upside of 31.05% from the current level. The Outperform industry rating is maintained.

Key points from CICC are as follows:

The company has issued its 2025 performance forecast, anticipating a full-year net profit decline of 27% to 32% year-on-year, to a range of $22.65 million to $24.32 million. Adjusted net profit, excluding listing expenses, is expected to decrease by 25% to 20% year-on-year, slightly below the firm's previous expectations.

The if brand continues to experience healthy growth, while Innococo is undergoing short-term channel adjustments. CICC forecasts a mid-single-digit decline in overall company revenue for the second half of 2025. Revenue from the if brand is projected to increase by 15% to 20% year-on-year, maintaining a relatively rapid growth pace. However, due to short-term channel adjustments for Innococo, a high double-digit decline in revenue is anticipated for 2H25, putting pressure on total company revenue.

Looking ahead to 2026, driven by consumer trends favoring healthy beverages, CICC believes the coconut water industry is still poised for double-digit growth, with the if brand expected to continue benefiting from these industry tailwinds. The company is actively addressing challenges; it appointed COFCO's Top Cellars as a distributor for Innococo in China in 2025, and CICC expects the channel adjustments to be nearing completion.

Profitability faced pressure in the second half of 2025 due to currency fluctuations and increased marketing expenses. According to the performance forecast, 2H25 net profit is estimated to decline by 51% to 41% year-on-year, to between $7.68 million and $9.34 million. The net profit margin is expected to decrease by 9.3 to 11.3 percentage points year-on-year, to a range of 9.2% to 11.2%. The appreciation of the Thai Baht against the US Dollar is anticipated to have continued the gross margin decline trend seen in the first half of 2025. The sales and distribution expense ratio is also expected to have been negatively impacted by foreign exchange volatility, leading to an increase in 2H25. Furthermore, despite lower Innococo revenue, marketing expense ratios rose due to the appointment of a brand ambassador and promotional activities. On administrative expenses, sequential savings from 1H25 are expected, primarily due to reduced listing expenses.

CICC anticipates that with the company's subsequent use of financial instruments to manage forex volatility, gross margins and distribution expense ratios could stabilize in 2026. Additionally, a recovery in Innococo revenue is expected to help lower the marketing expense ratio, leading to an improvement in overall profitability.

Risk factors include fluctuations in raw material prices, intensifying competition, product quality and safety concerns, reliance on sales channels, foreign exchange rate volatility, and risks associated with dependence on a single product or market, as well as potential underperformance in new product development.