Morgan Stanley has released a research report adjusting its price target for CHINA RES BEER (00291) downward from HK$35 to HK$30, while keeping an "Overweight" rating intact.

Based on the first-half performance and a weakening near-term demand outlook, the firm has trimmed its full-year net profit forecast for 2025 by 9.5% to RMB 5.5 billion. It notes that demand within the餐饮渠道 remains sluggish, compounded by adverse weather conditions, which is expected to decelerate beer sales volume growth. Additionally, the group's premiumization strategy, aimed at upgrading its overall product mix, will take time to materialize, resulting in more moderate average selling price growth at present.

Furthermore, with rising packaging costs and diminished operating leverage, Morgan Stanley anticipates short-term pressure on the company's gross margins. Given a lower base established in 2026, earnings projections for 2027 and 2028 have also been revised down by 12%, though the medium-term premiumization trend remains unchanged.

Morgan Stanley projects that CHINA RES BEER's beer sales will grow 3% year-on-year in 2026, driven by a 0.9% increase in volume and a 1.7% rise in average selling price. Recurring net profit is expected to decline 3% year-on-year to RMB 5.5 billion.