Core Viewpoint - China Resources Beverage (2460.HK) issued a profit warning, expecting a 20%-30% decline in net profit for the first half of the year, which is below market expectations for double-digit growth [1] Group 1: Company Performance - The company's stock price dropped over 14% to HKD 11.16, marking a new low in over five months, with trading volume increasing to HKD 960 million [1] - The decline in net profit is attributed to intensified competition in the packaged water industry, leading to higher sales and distribution expenses, as well as changes in product mix resulting in lower gross margins [1] Group 2: Analyst Opinions - Goldman Sachs remains optimistic about the regional beverage business expansion and penetration potential of China Resources Beverage, but downgraded the investment rating from "Buy" to "Neutral" and reduced the target price from HKD 16.4 to HKD 12.1 [1] - Goldman Sachs adjusted sales forecasts for 2025 to 2027 down by approximately 5%, with a 6% reduction in packaged drinking water sales expectations, estimating a 1.6 percentage point narrowing in gross margin due to increased promotional and channel investment, leading to a 26%-27% downward revision in profit forecasts [1] - UBS anticipates that the profit warning will negatively impact the overall beverage industry and noted that the management did not provide specific guidance, with expectations of continued competitive uncertainty in the second half of the year [2] Group 3: Future Outlook - UBS highlighted that China Resources Beverage plans to distribute an interim dividend, despite the negative market reaction to the profit warning [2] - The management reiterated a focus on deepening channel reforms, particularly in online, home, and dining channels [2]