STOCKS NEWS EUROPE-Remy falls, UBS sees no China pain relief

Shares in Remy Cointreau (Frankfurt: RMC.F - news) fall by over 3 percent, leading decliners on the Paris bourse as UBS (Xetra: UB0BL6 - news) predicts the French spirits group's fourth-quarter cognac sales will still be heavily impacted by destocking in China, following a government crackdown on gift giving and personal spending by civil servants.

Cognac accounts for 80 percent of Remy's operating profit, with China making roughly half of that. The group is due to unveil full-year sales on April 17.

"We expect Remy's cognac organic sales to decline by 25 percent in the fourth quarter year on year (-32 percent in Q3 year on year). This performance will still be heavily impacted by China destocking...and we do not believe that the Chinese New Year (in February) has shown a meaningful inflection point in trend," UBS analysts write in a note.

Remy Cointreau's fiscal year ends on March 31. The group warned in November that full-year operating profit would fall by at least 20 percent, blaming slowing China demand.

"Given greater-than-expected China destocking in the fourth quarter, we lower our assumption (of full-year operating profit) from minus 22 percent to minus 33 percent," said UBS analysts, cutting their price target to 60 euros from 61 euros while keeping a "neutral" rating on the stock.

China is the second-largest market of French peer Pernod Ricard (Frankfurt: PER.F - news) , which holds a conference call with analysts on Asia on March 27.

Pernod shares were off 0.11 percent on the Paris bourse.

Reuters messaging rm://dominique.vidalon.thomsonreuters.com@reuters.net