J.P. Morgan Chase Yurun Food (1068.HK) reduced its holdings rating, with a target price of HK$7.6; believing that it still faced a difficult business environment in the first half of 2012, management estimated that sales of upstream and downstream products increased slightly by only 5% year-on-year and remained flat; pointing out that last year, Yurun changed distribution channels and supplied more directly to third party distributors and restaurants, which had an impact on gross margin, and believed that its profit prospects were still difficult to predict; however, in response to better sales expectations, it increased the 2012/13 profit forecast by 4%/6%.