Morgan Stanley has released a research report indicating that the management of China Res Beer (00291) holds a cautiously optimistic view on the company's prospects for 2026. The company recorded positive growth in both beer sales volume and average selling price during 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 current year. The gross profit margin is expected to remain stable, primarily supported by premiumization efforts to offset rising raw material costs. Morgan Stanley has adjusted the target price for China Res Beer downward from HK$36 to HK$35. This new target implies a 2026 forecasted price-to-earnings ratio of 16 times and an enterprise value to EBITDA margin of 11 times.

The report anticipates a compound annual growth rate of 9% for recurring earnings from 2025 to 2027, with a price-to-earnings to growth ratio of 1.9 times. The firm maintains an "Overweight" rating on the stock.

Morgan Stanley has made minor adjustments to its profit forecasts for China Res Beer, raising the net profit forecast for the current and next fiscal years by 1% to 3%. This revision primarily reflects anticipated savings in operating expenses. The firm projects a 10% growth in recurring operating profit for this year, with recurring net profit expected to increase by 9%. This is based on an estimated 5% growth in beer sales, a 9% rise in recurring operating profit, and a slight reduction in recurring operating losses from the spirits segment.