蒙牛乳业：周期底部向上，分红提升可期

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 15.97 HKD per share, based on a 13X PE for 2024 [3][58]. Core Views - The dairy industry is at a cyclical low, with supply-side adjustments underway. The overall demand for dairy products remains weak due to macroeconomic factors, leading to intensified price competition and promotional activities [2][11]. - The company has a solid operational foundation, with a leadership transition expected to usher in a new phase of development. The new management is experienced and familiar with the industry, which is anticipated to help navigate the current downturn [2][28]. - The company has demonstrated strong free cash flow generation capabilities, reaching a record high of 6.82 billion CNY in 2023, with an increased dividend payout ratio of 40% [2][50][56]. - Revenue and profit forecasts for 2024-2026 indicate a slight decline in 2024, followed by recovery in subsequent years, with expected revenues of 94.1 billion CNY in 2024, 98.57 billion CNY in 2025, and 102.84 billion CNY in 2026 [2][58]. Summary by Sections 1. Industry Overview - The dairy industry is experiencing a downturn, with production volumes declining and promotional activities increasing to manage inventory [2][11]. - The average price of raw milk has dropped significantly, with a year-on-year decrease of 14.4% as of August 2024 [19]. 2. Company Operations - The company has maintained its market leadership in high-end white milk and low-temperature yogurt, with a steady increase in revenue contribution from cheese products [2][32]. - The leadership transition is expected to enhance operational strategies and market positioning [2][28]. 3. Financial Performance - The company achieved a record free cash flow of 6.82 billion CNY in 2023, indicating strong cash generation capabilities [2][50]. - The dividend payout ratio has been increased to 40%, reflecting a commitment to returning value to shareholders [2][56]. 4. Revenue and Profit Forecast - Projected revenues for 2024-2026 are 94.1 billion CNY, 98.57 billion CNY, and 102.84 billion CNY, respectively, with a forecasted decline in net profit for 2024 followed by recovery [2][58].