MENGNIU DAIRY(02319) 国元香港·2025-05-06 06:09Investment Rating - The report assigns a "Buy" rating with a target price of 24.5 HKD per share, indicating a potential upside of 21.6% from the current price of 20.15 HKD [5][6]. Core Insights - The dairy industry is experiencing a reduction in cow inventory, leading to a stabilization of milk prices expected within the year. The domestic raw milk production is projected to decline by 2.8% year-on-year in 2024, marking the first decrease since 2018 [2][3][8]. - The management anticipates low single-digit revenue growth for 2025, focusing on improving profitability through cost reduction and efficiency measures. The operating profit margin (OPM) is expected to remain stable, with a target of improving the operating profit margin by 30-50 basis points annually over the next three years [10][11]. - The demand is slowly recovering, with expectations for revenue to improve gradually throughout 2025, particularly in the second quarter due to favorable market conditions and lower comparative bases from the previous year [4][11]. Financial Projections - The report forecasts earnings per share (EPS) for 2025, 2026, and 2027 to be 1.33, 1.46, and 1.60 HKD respectively, with corresponding price-to-earnings (PE) ratios of 17 times for 2025 [6][14]. - Revenue is projected to be 89.91 billion RMB in 2025, with a slight increase from 88.68 billion RMB in 2024, and a growth rate of 1.39% [7][18]. - The gross profit margin is expected to stabilize around 39.7% for 2025, with net profit margin improving to 5.8% [7][18].