Milkground(SH:600882) Xin Lang Cai Jing·2025-09-13 02:33Core Viewpoint - The company, Miaokelando, faces significant challenges in achieving its ambitious revenue targets due to a mismatch between aggressive goals and actual market conditions, particularly in the cheese sector, which remains underdeveloped in China compared to Western markets [2][9]. Market Potential and Consumer Demand - The cheese market in China is projected to have a "trillion scale" potential, but this is based on comparisons with high penetration rates in Western markets, which overlook the unique consumer demand in China [2][3]. - Cheese has not become a staple in Chinese diets, with recent data showing that the domestic cheese market growth has not exceeded single digits, primarily driven by children's snack segments, while adult consumption remains in a developmental phase [3][4]. Revenue Growth and Performance Metrics - Miaokelando set a target of 199 billion yuan in revenue over three years, requiring an annual growth rate of at least 16%, but actual revenue growth has been significantly lower, with a 7.98% increase in the first half of 2024 [4][5]. - The company has experienced a decline in growth, with revenue growth rates of only 9.2% in 2023 and a reliance on a single product category, cheese sticks, which constitutes nearly 70% of its revenue [5][6]. Profitability and Cost Management - Despite a reported 89.16% increase in net profit in 2023, this growth is attributed to short-term cost reductions rather than sustainable competitive advantages [6][7]. - The decline in international dairy prices has temporarily benefited Miaokelando, but this cost advantage may not be sustainable as prices are expected to rebound [6][7]. Market Position and Investor Confidence - Miaokelando's market capitalization of approximately 14 billion yuan does not reflect the over 4 billion yuan investment from its controlling shareholder, Mengniu, leading to a high dynamic price-to-earnings ratio of 80.66, indicating a crisis of confidence in the capital market [7][8]. - The company's stock has dropped 22% in the first half of 2024, significantly more than the average decline in the food and beverage sector, suggesting investor concerns about future performance [7][8]. Strategic Recommendations - To overcome its current challenges, Miaokelando should focus on realistic goal-setting and return to the fundamentals of dairy business, emphasizing product innovation and consumer education rather than relying on short-term marketing strategies [8][9]. - The company needs to balance revenue growth with profit quality, optimizing supply chains and diversifying its product offerings to reduce dependence on a single category [8][9].