Milkground(SH:600882) Changjiang Securities·2025-08-21 02:18Investment Rating - The report initiates coverage with a "Buy" rating for the company [12]. Core Insights - Miaokelan Duo has transitioned from a niche product leader to an industry trendsetter, focusing on cheese products while optimizing its product structure to enhance profitability [3][10]. - The company is expected to enter a phase of dual improvement in revenue and profit, driven by a higher proportion of high-margin cheese business and cost reductions [10]. Summary by Sections Company Overview - Miaokelan Duo, formerly Guangze Dairy, has been deeply engaged in the cheese sector since 2007 and has established itself as a leading player in China's C-end cheese market [6][19]. - The company has integrated with Mengniu Dairy to strengthen its competitive advantage and is expanding its product offerings across various cheese categories [6][19]. Market Development - The cheese market in China is projected to reach approximately 20.9 billion yuan by 2024, with a CAGR of 14.89% from 2010 to 2024 [8][45]. - Despite a recent decline in C-end product sales due to market fluctuations, the cheese stick product line is stabilizing, indicating potential for future growth [8][10]. Product and Capacity Strategy - The company has a comprehensive product matrix covering various cheese types, with a focus on cheese sticks leading the market [9][28]. - Miaokelan Duo operates five modern production bases across China, ensuring robust capacity to meet market demands [9][28]. Financial Performance - In 2024, the company reported total revenue of 4.844 billion yuan, a slight decrease of 8.99% year-on-year, while net profit surged by 89.16% to 114 million yuan [20]. - The cheese business accounted for 77.56% of total revenue, reflecting a strategic focus on high-margin products [24]. Shareholder Empowerment and Incentives - The company has introduced a dual-track incentive mechanism for its core team, including stock options and employee stock ownership plans, to align interests with shareholders [6][37]. - The incentive plan sets ambitious revenue and profit targets for the next three years, reinforcing the commitment to growth [37][38].