2024-04-02 16:00Investment Rating - The report maintains an "Outperform" rating for China Mengniu Dairy [2][4][10] Core Views - In 2023, the company's revenue reached 98.62 billion yuan, a year-on-year increase of 6.5%, with an operating profit of 6.17 billion yuan, up 13.8% year-on-year, while net profit attributable to the parent company decreased by 9.3% to 4.81 billion yuan [9][10] - The report highlights a steady increase in Operating Profit Margin (OPM), which rose by 40 basis points to 6.3% in 2023, driven by a decline in raw milk prices and improved product mix [4][10] - Non-recurring and non-operating items caused fluctuations in net profit, with expectations that these impacts will diminish in 2024 [4][10] Financial Performance Summary - Revenue for 2023 was 98.62 billion yuan, with a year-on-year growth of 6.5% (endogenous growth of 2.6%) [9] - Operating profit for 2023 was 6.17 billion yuan, reflecting a 13.8% increase year-on-year [9] - Net profit attributable to the parent company was 4.81 billion yuan, down 9.3% year-on-year [9] - The company’s OPM increased to 6.3%, with expectations for continued margin expansion in 2024 [4][10] Future Projections - Revenue projections for 2024, 2025, and 2026 are 101.49 billion yuan, 105.53 billion yuan, and 109.60 billion yuan, respectively, with year-on-year growth rates of 2.9%, 4.0%, and 3.9% [10] - Net profit attributable to the parent company is expected to be 5.42 billion yuan, 6.22 billion yuan, and 6.75 billion yuan for the same years, with growth rates of 12.7%, 14.7%, and 8.6% [10] - The report sets a target price of HK$29.80 for 2024, based on a 20x PE ratio [10]