Milkground(600882) 东吴证券·2024-12-10 07:05Investment Rating - The report assigns a "Buy" rating for the company for the first time [1]. Core Views - The company is positioned as the leading cheese producer in China, benefiting from the support of Mengniu Dairy, which has strengthened its strategic direction and governance [1]. - The cheese market in China has significant growth potential, with a projected CAGR of 3.1% from 2024 to 2028, despite recent industry challenges [1]. - The company has successfully established a strong brand presence and product innovation, leading to a solid market share of 25.3% in 2023, surpassing foreign competitors [1]. - The merger with Mengniu's cheese business is expected to enhance revenue and profit margins, leveraging the current low raw milk prices to optimize supply chain costs [1]. - The company's earnings are projected to rebound, with expected revenues of 4.91 billion, 5.43 billion, and 6.25 billion yuan for 2024, 2025, and 2026, respectively, alongside significant growth in net profit [1]. Summary by Sections 1. Company Overview - The company, established in 2001, transitioned to focus on cheese production and became the first publicly listed cheese company in China in 2016 [1][100]. - Mengniu Dairy became the controlling shareholder in 2021, and the full acquisition of Mengniu's cheese business was completed in Q3 2024, enhancing strategic alignment [1][102]. 2. Cheese Industry Insights - The cheese market in China reached 135 billion yuan in 2022, with a low per capita consumption compared to international standards, indicating substantial growth potential [1][138]. - The market has faced challenges in 2023, with a 17.7% decline in size, but is expected to stabilize as consumer preferences evolve [1][138]. 3. Competitive Advantages - The company has a robust product innovation strategy, with successful launches of cheese sticks and a diversified product matrix catering to various consumer segments [1][114]. - Strong brand marketing efforts have established the company as a household name, with a shift from targeting children to a broader audience [1][121]. 4. Financial Performance and Projections - The company experienced significant revenue growth from 2018 to 2021, but faced challenges in 2022 due to economic conditions [1][114]. - Future revenue projections indicate a recovery, with expected growth rates of 21.2%, 10.7%, and 15.1% for the next three years [1][1].