Shares of EASTROC Beverage (09980) have tumbled close to 4%, hitting a new all-time low during the trading session.

At the time of writing, the stock is down 3.73% to HKD 105.7, with a turnover of HKD 30.01 million.

Brokerage Actions and Price Target Cuts

The decline follows recent research reports from major financial institutions. Morgan Stanley has revised its price target for the company downward from HKD 227 to HKD 195, while maintaining an "Overweight" rating.

The firm also reduced its 2026 profit forecast by 13%, citing factors including recent weak demand, unfavorable weather conditions, heightened competition, and foreign exchange losses due to the appreciation of the Renminbi.

Profit forecasts for 2027 and 2028 were also lowered by 14% and 13%, respectively.

Morgan Stanley noted that demand for EASTROC's core energy drinks in the second quarter was weaker than anticipated. However, it expects shipments for its electrolyte water brand, "Hydration," to improve quarter-on-quarter following production capacity adjustments, while other beverage segments are projected to maintain strong growth momentum.

Further Downgrades from Other Institutions

Citigroup also weighed in, pointing to a slowdown in the company's sales destocking rate during Q2, primarily attributed to adverse weather and increased market competition, which led to decelerating growth in both energy and other beverages.

Consequently, Citigroup has cut its profit forecasts for 2026 and 2027 by 10% and 15%, respectively. Sales projections for those years were also reduced by 7% and 12%.

The bank made a significant adjustment to its H-share price target, slashing it from HKD 310.8 to HKD 161.7.