Investment Rating - The investment rating for China Feihe (06186.HK) is "Outperform" (maintained) [1] Core Views - The company achieved revenue of 20.749 billion RMB in 2024, a year-on-year increase of 6.2%, and a net profit of 3.570 billion RMB, up 5.3% year-on-year. The company plans to distribute a dividend of 0.3264 HKD per share, with a payout ratio of approximately 76%, enhancing shareholder returns [3][4] - The company is a leader in the Chinese infant formula market, with a continuous increase in market share and solid brand and channel advantages. The forecast for net profit in 2025-2026 has been slightly lowered due to intense market competition and delayed effects of fertility policies [3][4] Financial Summary and Valuation Indicators - Revenue and net profit projections for the upcoming years are as follows: - 2025E Revenue: 22.234 billion RMB, YOY +7.2% - 2025E Net Profit: 3.868 billion RMB, YOY +8.4% - 2026E Revenue: 23.669 billion RMB, YOY +6.5% - 2026E Net Profit: 4.139 billion RMB, YOY +7.0% - 2027E Revenue: 25.208 billion RMB, YOY +6.5% - 2027E Net Profit: 4.416 billion RMB, YOY +6.7% [5] - The projected EPS for 2025, 2026, and 2027 are 0.43, 0.46, and 0.49 RMB respectively, with corresponding P/E ratios of 12.8, 11.9, and 11.2 times [5] Product and Growth Strategy - The company is focusing on high-end and ultra-high-end products, with the "Star Feifan Zhuorui" series gaining market share. The birth rate in China is expected to improve, with 9.54 million births in 2024, a 5.8% increase year-on-year, which may drive demand for infant formula in 2025 [4] - The company is implementing a full-age nutrition strategy, covering all life stages from infants to the elderly, which is expected to support sustainable growth [4]

Investment Rating - The investment rating for China Feihe (06186.HK) is "Outperform" (maintained) [1] Core Views - The company achieved revenue of 20.749 billion RMB in 2024, a year-on-year increase of 6.2%, and a net profit of 3.570 billion RMB, up 5.3% year-on-year. The company plans to distribute a dividend of 0.3264 HKD per share, with a payout ratio of approximately 76%, enhancing shareholder returns [3][4] - The company is a leader in the Chinese infant formula market, with a continuous increase in market share and solid brand and channel advantages. The forecast for net profit for 2025-2026 has been slightly adjusted downwards due to intense market competition and the delayed effects of fertility policies [3][4] Financial Performance Summary - In 2024, the revenue from infant formula, other dairy products, and nutritional supplements was 190.62 billion RMB (up 6.6%), 15.14 billion RMB (up 6.3%), and 1.73 billion RMB (down 25.4%) respectively. The company is focusing on high-end products, particularly the Xingfeifan Zhuorui series, which is expected to drive revenue growth [4] - The gross margin for 2024 was 66.3%, an increase of 1.5 percentage points year-on-year, primarily due to product structure optimization and a decrease in raw material costs. However, the net profit margin was slightly affected by increased expenses and reduced government subsidies [5] - The company expects to maintain a reasonable pricing strategy while optimizing its expense ratio, which is anticipated to enhance profitability in the future [5] Future Outlook - The company plans to launch more high-end products in the second half of 2025, which is expected to further drive performance growth and improve gross margins. The full-age nutrition strategy is being steadily implemented, covering the entire lifecycle from infants to the elderly [4][5]

Investment Rating - The report maintains a "Buy" rating for China Feihe (6186.HK) with a projected PE of 13, 12, and 12 times for the years 2025, 2026, and 2027 respectively, indicating a favorable outlook compared to the Hang Seng Index [5][7]. Core Insights - In 2024, China Feihe achieved a revenue of 20.749 billion yuan, representing a year-on-year increase of 6.23%, and a net profit attributable to shareholders of 3.570 billion yuan, up 5.31% [1][2]. - The company plans to distribute a final dividend of 0.1632 HKD per share, totaling approximately 2.72 billion yuan, with a payout ratio of about 76.19% [1]. - The infant formula segment showed steady recovery with revenues of 19.062 billion yuan, reflecting a growth of 6.63% year-on-year [2]. Revenue Breakdown - Offline and online revenues for 2024 were 15.997 billion yuan and 4.751 billion yuan, respectively, with year-on-year growth rates of 2.89% and 19.25% [2]. - The company reported revenues from its infant formula business in mainland China, the United States, and Canada of 20.546 billion yuan, 164 million yuan, and 39 million yuan, respectively, with growth rates of 6.52%, -20.61%, and 1.90% [2]. Production Capacity and Margins - By the end of 2024, the company's production capacity increased to over 365,000 tons, marking an annual growth of over 11.62% [2]. - The gross margin improved to 66.34%, up 1.51 percentage points year-on-year, primarily due to a 15% decrease in raw milk prices and product mix upgrades [2][3]. Profitability Metrics - The net profit margin for 2024 was 17.21%, a slight decrease of 0.15 percentage points year-on-year, attributed to reduced government subsidies and increased minority interest losses [3]. - Management expenses decreased, with the management expense ratio at 8.10%, down 0.92 percentage points year-on-year [3]. Market Outlook - The infant formula market is expected to stabilize gradually, supported by newborn support measures, with China Feihe positioned as a leading player due to its strong R&D capabilities and brand recognition [4]. - The high-end infant formula segment is anticipated to drive continued growth, supported by rising disposable income and demand for premium products [4].

Investment Rating - The report maintains a "Buy" rating for China Feihe (6186.HK) with a target price of HKD 6.65, indicating a potential upside of 13.3% from the current price of HKD 5.87 [3][6]. Core Views - China Feihe's net profit for 2H24 fell short of market expectations due to short-term inventory clearance in functional nutrition products, including adult milk powder, which affected overall gross margin performance. However, the infant formula business showed revenue growth in line with expectations, and profit margins remained robust. Management is confident that revenue growth in 2025 will exceed that of 2024, with a slight increase in gross margin expected year-on-year [1][6]. - As a leader in the infant formula market, China Feihe is expected to continue driving industry consolidation. The company is actively investing in brand marketing and product technology development to enhance brand strength and meet consumer demands with higher-end products [1][6]. Summary by Sections Financial Performance - For 2023, the company reported revenue of RMB 19,532 million, with a year-on-year decline of 8.3%. In 2024, revenue is expected to increase by 6.2% to RMB 20,749 million, and further growth is projected for 2025 with an estimated revenue of RMB 21,817 million, reflecting a 5.1% increase [8][10]. - The net profit for 2023 was RMB 3,390 million, down 31.4% year-on-year, but is expected to recover with a 5.3% increase in 2024 to RMB 3,570 million and a further 10.5% increase in 2025 to RMB 3,944 million [8][10]. Product Strategy - The company is focusing on high-end product offerings, with ultra-high-end products seeing a revenue increase of 17% in 2024, accounting for 69% of total revenue. The management anticipates continued growth in this segment, particularly for the Zhuorui brand, which has become the largest revenue contributor [6][11]. - A RMB 12 billion maternity subsidy plan is set to launch in April 2025, expected to have a limited negative impact on overall profit margins due to its structure and the company's marketing adjustments [6][11]. Dividend Policy - China Feihe plans to increase its dividend payout, with a projected dividend of HKD 0.3264 per share for 2024, raising the payout ratio to 76.1%. The management aims for a 10% annual increase in absolute dividend amounts over the next two years, assuming no major acquisitions [6][11].

Investment Rating - The report maintains a "Buy" rating for China Feihe (6186.HK) with a target price of HKD 6.65, indicating a potential upside of 13.3% from the current price of HKD 5.87 [3][6]. Core Insights - China Feihe's net profit for 2H24 fell short of market expectations due to short-term inventory clearance in functional nutrition products, including adult milk powder, which affected overall gross margin performance. However, the infant formula business showed revenue growth in line with expectations, and profit margins remained robust. Management is confident that revenue growth in 2025 will exceed that of 2024, with a slight increase in gross margin expected year-on-year [1][6]. - The company is positioned as a leader in the infant formula market, driving industry consolidation trends. The report suggests that Feihe will continue to capture market share through increased brand investment and product innovation [1][6]. Financial Performance and Projections - Revenue for 2023 was reported at RMB 19,532 million, with a projected increase to RMB 20,749 million in 2024, reflecting a year-on-year growth of 6.2%. The forecast for 2025 anticipates revenue of RMB 21,817 million, representing a growth of 5.1% [8][11]. - The net profit for 2023 was RMB 3,390 million, with expectations of growth to RMB 3,570 million in 2024 and RMB 3,944 million in 2025, indicating a year-on-year increase of 5.3% and 10.5%, respectively [8][11]. - The gross margin is expected to improve from 64.8% in 2023 to 66.3% in 2024, with further stability projected for 2025 [8][11]. Market Position and Strategy - China Feihe is focusing on high-end product offerings, with ultra-high-end products expected to see a revenue increase of 17% in 2024, contributing to 69% of total revenue. The company plans to launch even higher-end products in 2H25 [6][11]. - The management has announced a RMB 12 billion maternity subsidy plan, which is expected to have a limited negative impact on profit margins, as the actual costs will be lower than the total subsidy amount [6][11]. Dividend Policy - The company has increased its dividend payout, with a projected dividend of HKD 0.3264 per share for 2024, raising the payout ratio to 76.1%. Management aims for a 10% annual increase in absolute dividend amounts over the next two years [6][11].

Summary of the Conference Call for Feihe Company Overview - **Company**: Feihe - **Industry**: Infant Formula Milk Powder Key Points and Arguments Industry and Policy Impact - The Chinese government has introduced a series of child-rearing policies, including birth subsidies in cities like Hohhot, which are expected to stimulate market demand in the infant formula industry. An estimated population increase of approximately 500,000 is anticipated as a positive incentive for the industry [3][4] Financial Strategies and Subsidies - Feihe plans to implement a subsidy of 1.2 billion yuan starting from April 2025, targeting pregnant women, expectant mothers, and babies. This initiative aims to serve consumers while controlling the impact on company profits through adjustments in the cost structure [4][5] - The sales expense ratio for 2024 is expected to remain around 34%, influenced by low-end adult milk powder and promotional activities. The company aims to maintain this ratio at approximately 30% in the future [4][6] Product Performance and Growth - The flagship product, Zhuorui, generated 6.688 billion yuan in revenue in 2024, accounting for 32% of total revenue. It is expected to achieve single-digit growth in 2025, while the new product, Xinfeifan, is projected to grow by 57-58%, contributing around 900 million yuan in revenue [4][7] - Zhuorui's gross margin for the second half of 2024 is approximately 73%, with expectations to maintain this level in 2025 [4][9] Research and Development - Feihe's R&D investment reached 580 million yuan in 2024, focusing on breast milk and infant nutrition in collaboration with renowned institutions. The slogan for 2025 has shifted to "Smart Babies and Feihe," emphasizing brain development research [4][16] Market Position and Digital Strategy - Feihe's market share has shown steady growth, with a total market share of 20.5% and an offline market share of about 23% as of December last year. Digital channels are contributing significantly to sales, with monthly sales exceeding 100 million yuan [19] Future Directions and Challenges - The company aims to expand its product offerings in the infant formula sector, explore overseas markets, and develop health foods for children and adults. However, the reduction in government subsidies is expected to negatively impact net profit by approximately 200 million yuan in 2025 [12][11][26] - Feihe has not provided specific profit guidance for 2025, citing the influence of various factors on profitability, including the performance of new business segments [24][25] Capital Expenditure and Dividend Policy - Feihe's capital expenditure is expected to remain stable, with no significant growth anticipated. The company commits to a dividend payout of no less than 30% of net profit, with historical payout rates typically between 40% and 56% [20][21] Upcoming Events - Feihe plans to organize a reverse roadshow in mid-June 2025, inviting investors to visit its factories and farms, including the newly launched Harbin factory [28]

Investment Rating - The report maintains a "Strong Buy" rating for China Feihe (06186.HK) with a target price of HKD 7.5 [1][6]. Core Views - The company reported a revenue of CNY 20.749 billion for 2024, a year-on-year increase of 6.23%, and a net profit of CNY 3.654 billion, up 11.06% year-on-year. The second half of 2024 saw a revenue of CNY 10.654 billion, reflecting an 8.74% increase year-on-year, with a net profit of CNY 1.743 billion, a 4.25% increase year-on-year [1][6]. - The company announced a dividend of HKD 0.1632 per share, leading to a total dividend payout of CNY 2.72 billion, with a payout ratio of approximately 74% [1][6]. - The report highlights that the company is in a business turnaround cycle, with external demand recovering and continuous product upgrades expected to drive revenue growth in 2025 [6][7]. Financial Performance Summary - For 2024, the total revenue is projected at CNY 20,749 million, with a year-on-year growth rate of 6.2%. The attributable net profit is expected to be CNY 3,570 million, with a growth rate of 5.3% [7]. - The earnings per share (EPS) forecast for 2025-2027 is CNY 0.43, CNY 0.46, and CNY 0.50 respectively, with corresponding price-to-earnings (P/E) ratios of 13, 12, and 11 [6][7]. - The company’s gross margin for the second half of 2024 is reported at 64.88%, with a year-on-year increase of 0.54 percentage points, driven by product structure optimization [6][7]. Market Position and Strategy - The company has increased its market share to 20.5%, up 0.3 percentage points year-on-year, indicating a solid position in the infant formula market despite industry challenges [6][7]. - The report emphasizes the company's five-year development plan, aiming to significantly enhance its market position in the infant formula sector and diversify into functional nutrition and children's products by 2030 [6][7].

2025 年 3 月 31 日 | 总股本(亿股) | 90.67 | | --- | --- | | 总市值(亿港元)： | 532.25 | | 一年最低/最高(港元)： | 3.26/7.38 | | 近 3 月换手率(%)： | 21.16 | 公司研究 政府补助减少拖累 24H2 利润，开始实施全龄营养战略 ——中国飞鹤（6186.HK）2024 年年度业绩点评 买入（维持） 当前价：5.87 港元 作者 分析师：陈彦彤 执业证书编号：S0930518070002 021-52523689 chenyt@ebscn.com 分析师：汪航宇 执业证书编号：S0930523070002 021-52523174 wanghangyu@ebscn.com 分析师：聂博雅 执业证书编号：S0930522030003 021-52523808 nieboya@ebscn.com | 市场数据 | | --- | 股价相对走势 -20% 0% 20% 40% 60% 80% 100% 24/04 24/05 24/06 24/07 24/08 24/09 24/10 24/11 24/12 25/01 25/0 ...

Investment Rating - The report maintains an "Outperform" rating for China Feihe (06186) [2][17] Core Views - The infant formula business is expected to return to growth in 2024, with a positive outlook for 2025 [1][7] - Despite challenges in the infant formula industry due to declining birth rates, China Feihe's strong brand recognition and distribution network position it well for market share expansion [7][8] Financial Data and Profit Forecast - Revenue projections for China Feihe are as follows: - 2023: 19,532 million - 2024: 20,749 million (6% YoY growth) - 2025E: 21,751 million (5% YoY growth) - 2026E: 22,713 million (4% YoY growth) - 2027E: 23,630 million (4% YoY growth) [3][8] - Net profit forecasts are as follows: - 2023: 3,390 million - 2024: 3,570 million (5% YoY growth) - 2025E: 3,862 million (8% YoY growth) - 2026E: 4,024 million (4% YoY growth) - 2027E: 4,191 million (4% YoY growth) [3][8] - Earnings per share (EPS) projections: - 2023: 0.37 - 2024: 0.39 - 2025E: 0.43 - 2026E: 0.44 - 2027E: 0.46 [3][8] Market Data - As of March 31, 2025, the closing price is HKD 5.87, with a market capitalization of HKD 532.25 billion [4][7] - The 52-week high and low prices are HKD 7.38 and HKD 3.39, respectively [4] Business Performance - In 2024, the company achieved a revenue of 20,749 million, a 6.23% increase YoY, and a net profit of 3,570 million, a 5.31% increase YoY [7] - The company’s infant formula segment generated revenue of 19,062 million, with a 6.63% increase YoY, maintaining a market share of 20.5% [7][8] - The gross margin for 2024 was 66.34%, an increase of 1.5 percentage points YoY, driven by an improved product mix [7]

Investment Rating - The report maintains a "Strong Buy" rating for China Feihe (06186.HK) [1][2][3] Core Views - China Feihe is expected to benefit from a rebound in newborn numbers, leading to accelerated revenue growth in the second half of 2024. The company is improving its product structure, which is expected to enhance gross margins, despite a decrease in government subsidies and an increase in tax rates affecting net profit margins. The company has increased its cash dividend to 2.72 billion yuan, with a payout ratio of 76%, resulting in a dividend yield of approximately 5% [1][2][6] Financial Performance - For 2024, China Feihe's revenue is projected to be 20.75 billion yuan, representing a year-on-year increase of 6.2%, while net profit is expected to reach 3.65 billion yuan, up 11.1% year-on-year. The second half of 2024 is anticipated to show a revenue growth of 8.7% year-on-year [1][6][7] - The company achieved a gross margin of 66.3% in 2024, an increase of 1.5 percentage points year-on-year, driven by improvements in product structure and a decrease in raw material costs [6][7][12] - The earnings per share (EPS) forecast for 2025 and 2026 is 0.44 yuan and 0.49 yuan, respectively, with a current price-to-earnings (PE) ratio of 14 times for 2025 [1][2][7] Market Position - China Feihe's market share is steadily increasing, supported by ongoing investments in consumer education and a recovery in the infant formula sector. The company organized 920,000 face-to-face events in 2024, and online sales accounted for 22.9% of total revenue [1][2][6] Valuation Metrics - The current stock price is 6.59 HKD, with a total market capitalization of 59.8 billion HKD. The company has a return on equity (ROE) of 13.2% and a debt-to-asset ratio of 24.1% [3][6][12]