Broker Name: China Galaxy International Securities (CGSI)
Date of Report: March 10, 2026
Excerpt from China Galaxy International Securities report.
Report Summary
- Mengniu Dairy reported a 7-8% year-on-year sales decline for FY25, attributed to weak dairy demand, shifting consumer channels, and increased competition. A one-off write-off of RMB2.2-2.4bn for idled capacity and receivables led to a sharp drop in reported net profit for FY25.
- Despite recent challenges, channel checks indicate that Mengniu saw a return to positive sales growth in Jan-Feb 2026, driven by Chinese New Year demand and improved inventory management. The company is expected to achieve revenue and core net profit growth of 4.1% and 17% respectively in FY26, supported by the recovery of liquid milk sales and expansion in B2B dairy products like cheese and butter.
- The report maintains an “Add” rating with a slightly reduced DCF-based target price of HK\$19.70. Key risks remain higher raw material costs and weak macroeconomic conditions impacting dairy demand, but margin expansion is anticipated in the medium term due to an improving product mix and cost efficiencies.
Above is an excerpt from a report by China Galaxy International Securities. Clients of China Galaxy International Securities can be the first to access the full report from the China Galaxy International Securities website : https://www.chinastock.com.hk/
