Morgan Stanley has issued a research report adjusting its outlook for Eastroc Beverage (Group) Co., Ltd. (HKG: 09980). The firm has lowered its target price for the stock from HK$227 to HK$195, while maintaining an "Overweight" rating.

Concurrently, Morgan Stanley has reduced its profit forecast for the company for 2026 by 13%. This revision reflects several headwinds, including recent soft demand, unfavorable weather conditions, heightened competition, and foreign exchange losses stemming from the appreciation of the Renminbi. Profit projections for 2027 and 2028 have also been trimmed by 14% and 13%, respectively.

The report notes that demand for Eastroc's energy drinks in the second quarter was weaker than anticipated. However, the company's electrolyte hydration brand, "Hydration Now," is expected to show a sequential improvement in shipment growth following capacity adjustments. Other beverage segments are projected to maintain robust growth momentum.

Based on current estimates, Morgan Stanley forecasts that Eastroc's sales and profit for the first half of the year will increase by approximately 16% year-on-year. For the full year, growth in both sales and profit is anticipated to be around 15%.