According to the report released by Morgan Stanley, Jiuxing (01836.HK) saw a year-on-year increase of 5.7% in sales in the second quarter, but the average selling price dropped by 5%. The company also announced a profit warning, with net profit for the first half of the year expected to be at least $90 million, a year-on-year increase of at least 63%. Management expects net profits for the whole year to grow by a low to mid-teen percentage, meaning that net profits for the second half of the year are expected to fall by 14% to 22% year-on-year.

The bank has lowered Jiuxing's target price from HKD 15.6 to HKD 11.4. Due to the uncertain prospects for the company next year, the bank has downgraded its rating from "outperform" to "underperform".