Milkground(SH:600882) Orient Securities·2025-04-17 12:08Investment Rating - The report maintains a "Buy" rating for the company with a target price of 28.91 CNY, reflecting a potential upside from the current price of 28.39 CNY [4][7]. Core Views - The company is expected to benefit from the integration of Mengniu's cheese business, leveraging its distribution channels for accelerated growth. Long-term growth potential is viewed positively [4][12]. - The forecast for earnings per share (EPS) for 2025-2027 is adjusted to 0.47, 0.64, and 0.84 CNY, respectively, with a slight downward revision for 2025 from the previous estimate of 0.48 CNY [4][12]. Financial Performance Summary - Revenue: The company reported a revenue of 5,322 million CNY in 2023, with a projected decline to 4,844 million CNY in 2024, followed by a recovery to 5,444 million CNY in 2025, representing a growth rate of 12.4% [6][11]. - Net Profit: The net profit attributable to the parent company is expected to rise from 60 million CNY in 2023 to 240 million CNY in 2025, reflecting a significant growth of 111.1% [6][11]. - Gross Margin: The gross margin is projected to improve from 23.9% in 2023 to 29.3% in 2025, indicating enhanced profitability [6][11]. - Market Position: The company has expanded its distribution network significantly, increasing the number of distributors to 7,797 by the end of Q4 2024, following the integration of Mengniu's cheese assets [11]. Valuation Metrics - The company's equity value is estimated at 148 billion CNY, with a calculated WACC of 9.07% [12][13]. - The price-to-earnings (P/E) ratio is projected to decrease from 243.7 in 2023 to 61.0 in 2025, indicating an improving valuation as earnings grow [6][11].