Morgan Stanley has lowered its target price for China Resources Beer (00291) from HK$35 to HK$30 in its latest research report, while maintaining an "Overweight" rating on the stock. The adjustment reflects the company's first-half performance and a weaker short-term demand outlook.

The brokerage has cut its full-year net profit forecast for the current year by 9.5% to RMB 5.5 billion, citing persistently soft demand in the foodservice channel and unfavorable weather conditions that are expected to slow beer sales volume growth. The group's premiumization strategy, which aims to enhance its overall product mix, will take time to materialize, with average selling price growth currently remaining moderate.

Additionally, Morgan Stanley notes that rising packaging costs and reduced operating leverage will pressure China Resources Beer's gross margins in the near term. With a lowered base established in 2026, the firm has also reduced its earnings estimates for 2027 and 2028 by 12%, although the medium-term premiumization trend remains intact.

The investment bank projects that China Resources Beer's beer sales will grow 3% year-on-year in 2026, driven by a 0.9% increase in sales 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.