Milkground(SH:600882) Orient Securities·2025-04-17 14:23Investment 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 ecological channels for accelerated growth. Long-term growth potential is viewed positively [4][12]. - The company’s revenue and gross margin forecasts for 2025 have been adjusted downwards, but the long-term growth outlook remains optimistic due to the synergies from the Mengniu integration [4][12]. Financial Summary - Revenue Forecasts: The company is projected to achieve revenues of 5,444 million CNY in 2025, with a growth rate of 12.4%, followed by 6,103 million CNY in 2026 and 6,824 million CNY in 2027 [6]. - Profitability: The net profit attributable to the parent company is expected to reach 240 million CNY in 2025, with a significant growth of 111.1% year-on-year, and further increase to 327 million CNY in 2026 and 429 million CNY in 2027 [6][11]. - Earnings Per Share (EPS): EPS is forecasted to be 0.47 CNY in 2025, 0.64 CNY in 2026, and 0.84 CNY in 2027, indicating a strong growth trajectory [6][12]. - Gross Margin: The gross margin is expected to improve to 29.3% in 2025, 29.6% in 2026, and 30.1% in 2027, reflecting enhanced profitability [6][11]. - Market Performance: The company has shown strong absolute performance over various time frames, including a 140.8% increase over the past year [8]. Business Strategy - The company is focusing on deepening the integration of Mengniu resources and enhancing its product offerings, particularly in the cheese segment. It aims to strengthen its position in both the children's cheese market and the adult snack segment [11][12]. - The company plans to expand its distribution channels, including supermarkets, mother-and-baby stores, and e-commerce platforms, while exploring opportunities in Southeast Asia [11]. Valuation Metrics - The company's equity value is estimated at 148 billion CNY, with a calculated WACC of 9.07% [12][13]. - The report includes a sensitivity analysis for the target price based on varying perpetual growth rates, indicating a robust valuation framework [14].