JPMorgan issued a research report maintaining a "Neutral" rating on WANT WANT CHINA (00151) but lowered its target price from HK$5.1 to HK$4.9. For the first half of FY2026 ending September, the company reported a 2.1% year-on-year increase in sales but a 7.8% decline in earnings, missing expectations by 1% and 10%, respectively. The bank attributed this underperformance to a 1% drop in milk beverage sales, a 1.1 percentage point contraction in gross margin, and a 2.3 percentage point rise in the sales and administrative expense ratio.

Additionally, the rapid growth of discount snack stores contributed 15% to total sales in H1 FY2026, up from 10% in FY2025. However, the group expects operating margins from this channel to be slightly lower than traditional channels. Management anticipates maintaining advertising and promotional expenses at 3%-4% of revenue in H2 FY2026 and the next 1-2 years to drive product innovation. While JPMorgan views this strategy as beneficial for long-term sustainable growth, it will likely pressure short-term profitability. Consequently, the bank revised its earnings forecasts downward by 6%-9%, now projecting FY2026 sales growth of 1.6% and a 9% earnings decline year-on-year.