UBS lowers CR BEVERAGE's revenue and profit forecasts, maintains "Neutral" rating

UBS published a research report stating that during a recent investor event, they communicated with the management of CR BEVERAGE (02460.HK). The management revealed their outlook for the second half of the year and 2026, noting that the short-term fluctuations in packaged drinking water reflect intensified price competition. They expect a continued need to invest in marketing and promotional activities, while the beverage business is showing strong growth trends driven by new product launches.

UBS indicated that the company has a cautious view of the market outlook, expecting channel adjustments to continue until the first half of 2026, which will put pressure on profitability in the second half of this year. UBS has lowered its earnings forecasts for CR BEVERAGE for 2025 to 2027 by 14% to 17%, and revenue forecasts by 4% to 5%, reducing the target price from HKD 11.7 to HKD 10.75, maintaining a "Neutral" rating