蒙牛乳业（02319）：供给去化，周期反转

Investment Rating - The report maintains an "Outperform" rating for China Mengniu Dairy [2][6]. Core Views - Supply depletion is occurring in the raw milk market, with prices stabilizing at a low level, indicating a potential reversal in the cycle [3][11]. - The reversal of milk prices is expected to positively impact Mengniu's profitability, as the company is increasingly affected by the upstream raw milk cycle [4][12]. - The company is focusing on improving operating profit margins and shareholder returns, with a planned increase in dividend payout [5][13]. Financial Summary - The current share price is HK$19.76, with a target price set at HK$27.60, indicating a potential upside [2]. - Market capitalization stands at HK$77.38 billion (approximately US$9.98 billion) [2]. - Revenue projections for 2025-2027 are estimated at Rmb 91.44 billion, Rmb 95.82 billion, and Rmb 101.30 billion, respectively, with year-on-year growth rates of 3.1%, 4.8%, and 5.7% [6][13]. - Net profit attributable to the parent company is forecasted to be Rmb 5.41 billion, Rmb 5.81 billion, and Rmb 6.42 billion for the same period, with significant growth expected in 2026 and 2027 [6][13]. - The diluted EPS is projected to increase from Rmb 1.38 in 2025 to Rmb 1.64 in 2027 [6][13]. Market Dynamics - The price of raw milk has been on a downward trend for nearly four years, reaching a 14-year low, which has led to a reduction in upstream production capacity [3][11]. - The national dairy herd has decreased by 5.8%, with expectations that a balance between supply and demand will be achieved at around 5.9 million heads [3][11]. - If the raw milk cycle reverses, it could lead to improved sales prices and reduced competition among dairy companies [4][12].