Shares of Uni-President China (0220) plunged after investment houses said they held a bearish view on the beverage business and market watchers advised investors to keep an eye on domestic consumption amid the Sino-US trade war.
Uni-President's shares fell 12.44 percent to HK$1.09 yesterday as the group announced that profit after tax rose 19 percent in the first nine months to RMB1.113 billion, over the previous year.
Morgan Stanley said the company recorded RMB399 million profit in the third quarter, 3 percent lower than their expectation. They said Uni-President's management team had also adopted a conservative attitude toward their beverage market in next year.
Bank of America Merrill Lynch said the fourth quarter is traditionally a slack season for the beverage market and lowered Uni-President's expectation price from HK$10.3 to HK$9.6.
The bank however, still recommends buying the company's shares.
Meanwhile, CIMB thought that the group's operating expense ratio was higher than market expectations and lowered the expectation price from HK$9.8 to HK$7.8 while suggesting that investors reduce their holding.