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China Feihe Ltd Ordinary Shares 06186

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Stock XHKG Rating as of
HKD 4.55 −0.01 (0.22%)
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Company Report

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Feihe To Improve Distribution Efficiencies and Maintain Retail Pricing Amid Shrinking Market Size

Jacky Tsang

Feihe strives to be a topnotch domestic infant milk formula, or IMF, producer in China. It has been able to price its products at a premium comparable with imported products, and is marketed as tailored for Chinese babies. The company has invested considerably in building out its sales network in maternity stores across China, as the category is mainly sold through this channel. Feihe possesses a scalable distributing and retail outlet network in the country.

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Price vs Fair Value

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06186 is trading at a 695% premium.
Price
HKD 4.55
Fair Value
HKD 3.60
Uncertainty
High
1-Star Price
HKD 5.38
5-Star Price
HKD 6.83
Economic Moat
Xcytfkg
Capital Allocation
Gsgpgycb

Bulls Say, Bears Say

Bulls

Feihe had early-mover advantage in the infant milk formula market in China, which gives the company an advantage in distribution that would take a long time for new entrants to replicate.

Bears

Any potential mishap in Feihe’s product quality would be a heavy blow to its brand reputation and revenue, with potentially long-lasting adverse impact.

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News

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Trading Information

Previous Close Price
HKD 4.56
Day Range
HKD 4.50–4.61
52-Week Range
HKD 3.42–5.13
Bid/Ask
HKD 4.55 / HKD 4.56
Market Cap
HKD 41.26 Bil
Volume/Avg
16.0 Mil / 19.9 Mil

Key Statistics

Price/Earnings (Normalized)
8.76
Price/Sales
1.91
Dividend Yield (Trailing)
6.75%
Dividend Yield (Forward)
6.52%
Total Yield
6.76%

Company Profile

Feihe is the number one infant milk formula producer in China, with a premium market positioning among domestic and foreign competing brands. The company utilizes the flagship Astrobaby lineup to promote its “more suitable for Chinese babies” proposition. It has a nationwide distributor network covering maternity stores, supermarkets and traditional retailers, as well as a direct sales network in e-commerce.
Sector
Consumer Defensive
Industry
Packaged Foods
Stock Style Box
Large Value
Total Number of Employees
9,554
Website
https://www.feihe.com

Competitors

Valuation

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Metric
06186
600887
02319
Price/Earnings (Normalized)
 8.7618.0910.87
Price/Book Value
 1.523.031.39
Price/Sales
 1.911.430.61
Price/Cash Flow
 8.339.287.72
Price/Earnings
06186
600887
02319

Financial Strength

Metric
06186
600887
02319
Quick Ratio
 2.690.730.85
Current Ratio
 3.060.981.05
Interest Coverage
 83.446.483.95
Quick Ratio
06186
600887
02319

Profitability

Metric
06186
600887
02319
Return on Assets (Normalized)
 9.63%6.65%5.03%
Return on Equity (Normalized)
 14.14%18.63%14.54%
Return on Invested Capital (Normalized)
 11.45%8.50%6.45%
Return on Assets
06186
600887
02319
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