Daiwa downgraded Nongfu Shanquan to outperform the market. Although farmers are industry leaders and have strong management skills, Daiwa thinks its valuation is on the high side. Daiwa raised the company's target price slightly to HK $45.1, but the target price implies downside risks to the share price. According to Daiwa, the valuations of their peers Coca-Cola and Pepsi are significantly lower than those of the company, while the market capitalization of farmers is about 45 per cent of that of the first two companies.