Morgan Stanley lowered its earnings per share forecast for Want Want China (00151.HK) in the current fiscal year by 4%, and in the next fiscal year and 2026 by 8%. It is expected that the demand for dairy products and ice cream will continue to be under pressure, as well as cost support weakening.

The bank lowered the target price for the stock by 4% to 4.8 yuan, with the new target price based on a forecast PE ratio of 14 times next fiscal year, already fully reflecting the company's prospects, and rated 'in line with the market'.

The report pointed out that the snack sector was affected by weak ice cream sales, with sales continuously declining year-on-year. Sales in the dairy product sector fell in the first half of the fiscal year, affected by soft industry demand. The bank maintains a cautious outlook for the second half of the fiscal year, based on the possible recovery of sales during the Lunar New Year due to gifting traditions.

On the other hand, the company's overseas business showed strong growth, with double-digit growth recorded in the previous fiscal year and the first half of the current fiscal year. The bank believes that the company's overseas business is a long-term growth driver, based on a wide range of products meeting domestic demand, and the brand attractiveness to overseas Chinese. However, the contribution of overseas business income is still small, only in the mid to high single digits, and has not had a significant impact on the company's business in the short term.