UBS maintains a "Sell" rating on BLUE MOON GROUP, facing challenges in balancing revenue and profit growth

UBS published a research report indicating that Blue Moon (06993.HK) saw a 3% year-on-year decline in revenue in the first half of the year, with a loss of HKD 435 million, narrowing by 34% year-on-year, which underperformed the bank's expectations. The net loss margin improved by 7 percentage points to 14%. Excluding the impact of exchange rates, the bank estimates the net loss margin improved by 5 percentage points to 16%. Management expects to achieve breakeven by 2025, but UBS believes Blue Moon still faces challenges in balancing revenue and profit growth, maintaining a "Sell" rating.

UBS stated that it has revised Blue Moon's earnings forecasts for 2025 to 2027 from an initial loss of HKD 2 million, a profit of HKD 22 million, and a profit of HKD 74 million, down to a loss of HKD 109 million, a loss of HKD 57 million, and a profit of HKD 2 million, with the target price lowered from HKD 1.70 to HKD 1.61