Morgan Stanley has issued a research report indicating that it has increased the target price for China Res Beer (00291) from HK$35 to HK$36, driven by the appreciation of the renminbi, though this is partly offset by a reduction in profit forecasts. The firm maintains an "Overweight" rating on the stock. Overall, the bank largely retains its sales and operating profit growth forecasts for the beer business, expecting ongoing efficiency improvements and a rising contribution from the Heineken brand to help counter the impact of higher raw material costs. Morgan Stanley has lowered its earnings per share forecasts for China Res Beer for 2025 to 2027 by 2% to 4%, citing challenges in the baiju segment due to a difficult demand environment and the time needed for business restructuring, alongside pressure on gross margins from rising aluminum prices. The bank projects that beer sales will grow by 2% in 2025 and 3% in 2026, with operating margin expansion driving recurring operating profit growth of 10% and 7%, respectively. It anticipates that the baiju business will record a loss in 2025, with a narrowing loss expected in 2026. Morgan Stanley forecasts overall recurring net profit growth of 11% in both 2025 and 2026.