Glonghui, April 17 | Morgan Stanley released a report on the Mainland's food and beverage industry, indicating that with the recovery in tourism demand, the beverage business growth will improve this year. Benefiting from falling raw material costs, profit margins will increase, but the year-on-year increase will be small. Compared to unification, the bank favors Master Kong. The bank believes that unification is facing challenges including slow recovery in demand for noodles; if palm oil prices rise, profit margins in the noodle business will be under pressure; and there are no plans to raise prices. However, the market has fully considered Master Kong's downside risks and made more conservative predictions. Furthermore, the bank indicated that the valuation of Chinese food is reasonable, and the performance of the carbonated beverage business will remain the focus of attention. The bank lowered Master Kong's target price from HK$16 to HK$11, maintaining the rating of “increase in holdings”. The unified target price was also lowered from HK$6.7 to HK$4.9 to reflect the reduction in profit forecasts, etc., to maintain the rating of “reduced holdings”. At the same time, the bank lowered the target price of Chinese food from HK$3.6 to HK$3.4, and downgraded the rating from “increasing holdings” to “synchronizing with the market.”