MENGNIU DAIRY(HK:02319) Guan Cha Zhe Wang·2025-08-18 08:25Core Viewpoint - Mengniu has sold its New Zealand milk powder factory to a2 Milk Company for approximately NZD 282 million (around CNY 1.2 billion), as part of its strategy to manage capital expenditures and optimize its asset portfolio [1][3]. Group 1: Transaction Details - a2 Milk Company announced the acquisition of Yashili New Zealand Dairy Company Limited from Mengniu's subsidiary Yashili International Group Limited [1]. - The deal includes a factory located in Pokeno, New Zealand, and two registered formula products for infants [1]. - The transaction has been approved by New Zealand's Overseas Investment Office and is expected to be completed by September 1 [1]. Group 2: Factory Background - The Yashili New Zealand factory was the first overseas factory built from scratch by a Chinese company in New Zealand, with an investment of no less than CNY 1.1 billion [1]. - The factory commenced construction in 2013 and began operations in November 2015, covering an area of approximately 70,000 square meters [1]. - It has an annual production capacity of 52,000 tons of base powder and 25,000 tons of finished milk powder, supplying markets in China, New Zealand, and Europe [1]. Group 3: Financial Performance - In 2024, Mengniu reported revenue of CNY 88.675 billion, a year-on-year decline of 10.09%, and a net profit of CNY 105 million, down 97.83% [3]. - The milk powder segment generated revenue of CNY 3.32 billion, accounting for 3.74% of total revenue, with a year-on-year decrease of 12.66% [4]. - Other segments, including liquid milk, ice cream, and cheese, also experienced varying degrees of decline [4]. Group 4: Industry Context - The dairy industry is facing an oversupply situation, prompting companies to reduce production capacity [6]. - Selling the factory allows Mengniu to adjust its industrial structure and invest in new product development [6]. - Despite the challenges, Mengniu's infant formula segment is showing signs of recovery, with expectations to reach nearly CNY 1 billion this year [6].