MENGNIU DAIRY(02319) 群益证券·2025-03-14 16:00Investment Rating - The report assigns a "Buy" rating to the company, with a target price of 22 CNY per share [1][6]. Core Insights - The company is expected to record a net profit of between 0.5 billion to 2.5 billion CNY for 2024, a significant decrease from 4.8 billion CNY in the previous year [7]. - The report highlights that while revenue is anticipated to decline due to weak demand, cost pressures are expected to ease, leading to improved gross and operating margins [7]. - A substantial impairment loss is projected, primarily due to the subsidiary Bellamy's expected losses and the joint venture Modern Dairy's impairments, which could impact profits by approximately 3.8 billion to 4 billion CNY [7]. - The report anticipates a gradual recovery in dairy product demand in 2025, supported by favorable policies and supply-demand improvements [7]. - The company is expected to maintain a stable dividend policy, with a dividend yield projected to remain above 2% [7]. Summary by Sections Company Overview - The company operates in the food and beverage industry, with a current H-share price of 18.16 CNY as of March 13, 2025 [2]. - The market capitalization is approximately 56.4 billion CNY, with major shareholder COFCO Group holding 24.14% [2]. Recent Performance - The company's stock price has seen a 15.82% increase over the past month, but a slight decline of 1.43% over the past year [2]. - The product mix is heavily weighted towards liquid milk (81.18%), with ice cream (7.55%), milk powder (3.66%), cheese (4.73%), and other products making up the remainder [3]. Financial Projections - For the years 2024 to 2026, net profits are projected to be 0.12 billion, 4.4 billion, and 5.075 billion CNY, respectively, with significant growth expected in 2025 and 2026 after a sharp decline in 2024 [9]. - The earnings per share (EPS) are forecasted to be 0.03 CNY for 2024, 1.12 CNY for 2025, and 1.30 CNY for 2026, reflecting a recovery trajectory [9]. - The price-to-earnings (P/E) ratio is expected to be 15 for 2025 and 13 for 2026, indicating potential value in the stock [9].