Ge Long Hui·2025-12-27 12:18Core Viewpoint - Morgan Stanley reports that the stock price of Want Want China Holdings (0151.HK) has increased by approximately 36.6% over the past 12 months, but expects this strong momentum to reverse in the fiscal year 2023, predicting a decline in sales and profits by 1% and 5% respectively, leading to a downgrade of the rating from "Neutral" to "Underweight" and a target price reduction from HKD 6.7 to HKD 6.2 [1] Group 1 - The operating profit margin of Wangzai Milk decreased by 8 percentage points year-on-year in the second half of fiscal year 2022, attributed to rising costs of milk powder and tin cans, with increasing channel inventory requiring further discounts [1] - The management confirmed that price increases were fully implemented in April 2022, and additional rebates may continue in the second quarter of this year due to ongoing cost inflation [1] - The overall gross margin is expected to decline further by 50 basis points to 44.3% in fiscal year 2023 due to sustained pressure on gross margins for the next 6 to 9 months [1] Group 2 - The report suggests that with the macroeconomic situation in mainland China improving since April and the recent reduction of quarantine days to "7+3", investors should shift focus from defensive consumer goods to reopening themes, including beer, dining, sports products, and liquor [1]