MENGNIU DAIRY(02319) 国元国际·2025-05-06 08:23Investment Rating - The report assigns a "Buy" rating to the company 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 report anticipates that the supply-demand dynamics will improve, resulting in a more balanced market by 2026 [2][8]. - The management has guided for a low single-digit revenue growth in 2025, focusing on improving profitability through cost reduction and efficiency measures. The company aims for a stable operating profit margin (OPM) and a gradual improvement in operating profit margin by 30-50 basis points annually over the next three years [3][10]. - The first quarter of 2025 showed slow demand recovery, but a gradual improvement in revenue is expected in the second quarter due to favorable market conditions and lower comparative bases from the previous year [4][11]. Financial Summary - The company’s projected earnings per share (EPS) for 2025, 2026, and 2027 are 1.33, 1.46, and 1.60 HKD, respectively. The target price corresponds to a price-to-earnings (PE) ratio of 17 times for 2025 [6][14]. - Revenue is expected to decline by 10.09% in 2024 but recover slightly in 2025 with a growth of 1.39%. The gross margin is projected to stabilize around 39.7% in 2025 [7][10]. - The net profit margin is anticipated to improve significantly from 0.1% in 2024 to 5.8% in 2025, reflecting a recovery in profitability [7][10].