EBSCN·2024-03-31 16:00Investment Rating - The report maintains a "Buy" rating for Mengniu Dairy (2319.HK) [3] Core Views - Mengniu Dairy's 2023 annual report shows a stable operating performance with a revenue of 98.624 billion yuan, a year-on-year increase of 6.51%, while net profit decreased by 9.31% to 4.809 billion yuan. The second half of 2023 saw revenue of 47.506 billion yuan, up 5.87%, and net profit increased by 15.28% to 1.789 billion yuan [2] - The liquid milk business remains robust, while the milk powder segment is undergoing adjustments. Revenue from liquid milk, ice cream, milk powder, cheese, and other dairy products for 2023 was 82.071 billion, 6.026 billion, 3.802 billion, 4.357 billion, and 2.368 billion yuan respectively, with notable growth in cheese products due to the consolidation of Miao Ke Lan Duo [2] - The company is focusing on optimizing channel layouts and quality development, with expectations for steady revenue growth in 2024. The decline in raw milk prices is anticipated to enhance gross margins, while marketing efficiency is expected to improve [2] Summary by Sections Financial Performance - In 2023, Mengniu Dairy achieved a gross margin of 37.15%, an increase of 1.85 percentage points year-on-year, primarily due to declining raw milk prices and product structure optimization. The sales expense ratio rose to 25.54%, up 1.41 percentage points, reflecting increased brand promotion activities [2] - The company forecasts net profits of 5.497 billion, 6.107 billion, and 6.631 billion yuan for 2024, 2025, and 2026 respectively, with corresponding EPS of 1.40, 1.55, and 1.69 yuan. The current stock price corresponds to P/E ratios of 11, 10, and 9 for 2024-2026 [2][7] Market Data - The total share capital is 3.935 billion shares, with a total market capitalization of 661.13 billion HKD. The stock price has fluctuated between 16.00 and 34.55 HKD over the past year [4][5]