Summary of China Mengniu Dairy Conference Call Company Overview - **Company**: China Mengniu Dairy - **Industry**: Dairy Products - **Market Position**: Second-largest dairy producer in China, following Inner Mongolia Yili - **Key Shareholders**: COFCO (13.5%) and DANONE (7.5%) [10][26] Key Points and Arguments Industry and Market Dynamics - **Liquid Milk Sales Recovery**: After two years of pressure, liquid milk sales are showing early signs of stabilization in 2026, with January sales estimated to have mid- to high-single-digit year-over-year (YoY) growth, a significant improvement from the high-single-digit decline in the second half of 2025 [2][4] - **Raw Milk Price Stabilization**: Following herd destocking, raw milk prices have stabilized around Rmb3/kg, with expectations of a price recovery in 2026 due to continued herd contraction [3][4] - **Impact of Subsidies**: Last year's delivery subsidies boosted demand for freshly prepared milk beverages, cannibalizing packaged liquid milk sales. As these subsidies phase out, Mengniu is expected to regain some market share [3] Financial Performance and Forecasts - **Sales Growth Forecast**: Projected sales growth of 4.6% in 2026, primarily driven by the recovery in liquid milk [4] - **Operating Profit Growth**: Expected operating profit to grow by 10.6% YoY, with an improvement in operating profit margin (OPM) by 40 basis points [4] - **Net Profit Projection**: Anticipated net profit of Rmb5.1 billion, reflecting a 32.8% YoY growth, supported by operational improvements and reduced impairment losses related to raw milk prices [4] Valuation and Investment Recommendation - **Valuation Metrics**: Mengniu's valuation is attractive with an estimated P/E of 11.8x for 2026 and a projected 20% EPS CAGR from 2025 to 2027 [5] - **Target Price**: Reiterated Buy rating with a target price of HK$20.5, implying a 15x P/E for 2026 [5][6] - **Market Capitalization**: Approximately HK$66.9 billion (US$8.57 billion) with a free float of 75% [6] Risks and Challenges - **Economic Sensitivity**: Risks include significant economic slowdown, competition, cost inflation, price resistance, changes in government policies, and regulatory challenges [12] - **Industry Vulnerability**: The dairy industry is sensitive to external risks, including disease outbreaks and regulatory changes that could hinder growth [12] Additional Insights - **Herd Contraction**: The milkable cow herd has been contracting since February 2024, with a 9% reduction from peak levels by the end of 2025 [3] - **Market Trends**: The overall dairy value chain is expected to experience reduced competitive intensity as raw milk prices stabilize [2][3] This summary encapsulates the critical insights from the conference call regarding China Mengniu Dairy's market position, financial outlook, and the broader industry context.

Group 1 - The core viewpoint of the article highlights the strong performance of Hong Kong consumer stocks, with notable increases in share prices for companies such as Mengniu Dairy and Sun Art Retail, both rising over 2% [1] - Other companies in the consumer sector, including Haidilao, Zhou Hei Ya, and Bosideng, also experienced share price increases, indicating a positive trend in the market [1]

Group 1 - FIL Limited increased its stake in Mengniu Dairy (02319.HK) by purchasing 1,886,000 shares at an average price of HKD 16.4611 per share, totaling approximately HKD 31.0456 million [1] - Following the acquisition, FIL Limited's total shareholding in Mengniu Dairy reached 194,973,414 shares, raising its ownership percentage from 4.98% to 5.03% [1]

公司名稱: 中國蒙牛乳業有限公司 呈交日期: 2026年2月4日 I. 法定/註冊股本變動 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2026年1月31日 狀態: 新提交 致：香港交易及結算所有限公司 | 根據《主板上市規則》第13.32D(1)條或第19A.28D(1)條 / 《GEM上市規則》第17.37D(1)條或第25.21D(1)條，我們在此確認，就上述所列股份類別而言，截至本月底: | | --- | | ✔ 已符合適用的公眾持股量要求（見下方） | | 未符合適用的公眾持股量要求（見下方） | | 根據《主板上市規則》第13.32B條或第19A.28B條 / 《GEM上市規則》第17.37B條或第25.21B條（視情況而定）所載的有關股份類別的最低公眾持股量要求為： | | 適用的公眾持股量門檻 初始指定門檻 - 上市股份所屬類別的已發行股份總數(不包括庫存股份)的25% | | 額外信息 | | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- ...

Core Viewpoint - Morgan Stanley maintains an "Overweight" rating on Mengniu Dairy (02319), anticipating strong sales during this year's Lunar New Year to act as a short-term catalyst [1] Sales and Profit Forecast - The bank expects sales and adjusted profits to increase by 2% and 17% year-on-year, respectively, this year [1] Competitive Environment - The competitive landscape is expected to improve, despite moderate overall demand and competition from other beverages such as coffee and tea [1] - The company is actively optimizing its product mix and expanding new channels to regain market share [1]

Core Viewpoint - Morgan Stanley maintains an "overweight" rating on Mengniu Dairy (02319), anticipating strong sales during this year's Lunar New Year as a short-term catalyst [1] Sales and Earnings Forecast - The bank expects sales and adjusted earnings to increase by 2% and 17% year-on-year, respectively, this year [1] Competitive Environment - The competitive landscape is expected to improve, despite moderate overall demand and competition from other beverages such as coffee and tea [1] - The company is actively optimizing its product mix and expanding new channels to regain market share [1]

Core Viewpoint - Mengniu Dairy (02319) is experiencing a near 3% increase in stock price, reflecting positive market sentiment and expectations for recovery in profitability in 2023 [1] Group 1: Price Trends - As of January 15, the average price of fresh milk is 3.03 yuan per kilogram, showing a week-on-week increase of 0.01 yuan per kilogram, with raw milk prices at levels last seen in October 2010 [1] - Since the second half of 2025, raw milk prices have fluctuated between 3.02 and 3.04 yuan per kilogram, indicating a sustained low price environment [1] - The price for culling mother cows is 19.93 yuan per kilogram as of January 23, reflecting a 2.5% increase since the beginning of the year, suggesting a gradual shift in industry supply and demand dynamics [1] Group 2: Market Outlook - Citigroup's report indicates that among large consumer staple companies in China, Mengniu Dairy is expected to show a more significant cyclical profit recovery compared to its peers this year [1] - The group anticipates sales to recover to high single-digit growth from January to February, with an overall expected growth of 5% for the year [1] - With raw milk prices stabilizing mid-year and positive operating leverage alongside a low comparative base, the company's operating profit margin is projected to expand again this year [1]

Core Viewpoint - Mengniu Dairy (02319) is experiencing a near 3% increase in stock price, currently at HKD 16.13, with a trading volume of HKD 312 million. The company is expected to see a significant recovery in cyclical profits this year compared to its peers in the essential consumer goods sector [1]. Group 1: Dairy Industry Insights - As of January 15, the average price of fresh milk is at RMB 3.03 per kilogram, showing a week-on-week increase of RMB 0.01 per kilogram, with raw milk prices at levels last seen in October 2010 [1]. - Since the second half of 2025, raw milk prices have fluctuated between RMB 3.02 and RMB 3.04 per kilogram, indicating a sustained low price environment and accelerated capacity reduction in farms [1]. - As of January 23, the price for culling cows is RMB 19.93 per kilogram, which is a 2.5% increase compared to the beginning of the year, suggesting an approaching turning point in industry supply and demand [1]. Group 2: Company Performance Expectations - Citigroup forecasts that Mengniu Dairy's sales will recover to high single-digit growth from January to February this year, with an overall expected growth of 5% for the year [1]. - The stabilization of raw milk prices in the middle of this year, combined with positive operating leverage and a relatively low comparison base, is anticipated to lead to an expansion in the company's operating profit margin [1].

智通财经APP获悉，蒙牛乳业(02319)涨近3%，截至发稿，涨2.68%，报16.13港元，成交额3.12亿港元。 东海证券发布研报指出，截至1月15日生鲜乳均价3.03元/公斤，周环比+0.01元/公斤，原奶价格处于 2010年10月水平。2025年下半年以来，原奶价格维持在3.02-3.04元/公斤震荡，价格持续低位，牧场产 能加速去化。截至1月23日，淘汰母牛价格19.93元/公斤，较年初+2.5%，行业供需拐点逐步到来。此 外，乳制品及牛肉进口政策落地提振国内需求替代，利好2026年肉奶价格。 花旗发布研报称，在中国大型消费必需品企业中，预期蒙牛乳业的今年周期性盈利复苏将较同业更为显 着。该行预期，集团销售额将于今年1月至2月恢复至高单位数增长，全年有望增长5%。随着原奶价格 在今年中周期性回稳，加上正面经营杠杆及比较基数较低，公司的经营利润率将于今年重新扩张。 ...

Group 1 - The core viewpoint of the report is that Mengniu Dairy (02319) is expected to experience a more significant cyclical profit recovery this year compared to its peers in the Chinese consumer staples sector [1] - The sales of the company are projected to return to high single-digit growth from January to February this year, with an overall expected growth of 5% for the year [1] - The operating profit margin is anticipated to expand this year due to the cyclical stabilization of raw milk prices, positive operating leverage, and a relatively low comparison base [1] Group 2 - The target price for Mengniu Dairy has been raised from HKD 18.8 to HKD 21.1, while maintaining a "Buy" rating [1]