Morningstar

China Mengniu Dairy Co Ltd 02319

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Stock XHKG Rating as of
HK$16.61 +0.07 (0.42%)
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As of Delayed Price Closed

Company Report

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Product Diversifications Across Liquid Milk and Other Segments To Drive Growth for Mengniu

Jacky Tsang

Mengniu is the second-largest dairy producer in China, with the majority of its revenue derived from the liquid milk business; ice cream and cheese are smaller segments. After a management change in 2016, Mengniu has restructured its organization and distribution channel, which in our view has rejuvenated its liquid milk business and resulted in rebounding profit growth. The company’s premium shelf-stable milk lineup, Deluxe, has been the number-one brand in China since 2020, which we think reflects improving channel execution and effective portfolio construction. Mengniu has currently built out a competitive liquid milk portfolio spanning shelf-stable, yogurt, and chilled products.

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Price vs Fair Value

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02319 is trading within a range we consider fairly valued.
Price
HK$16.61
Fair Value
HK$35.00
Uncertainty
Tbys
1-Star Price
HK$75.88
5-Star Price
HK$35.60
Economic Moat
Zzmtqbg
Capital Allocation
Zjnkxymr

Bulls Say, Bears Say

Bulls

Mengniu could leverage its liquid milk distribution network to boost sales for fresh milk, a growing, underpenetrated, and higher-margin product category.

Bears

Mengniu invested around 10% of its revenue in advertising and promotions annually, which shows customer switching costs could be low. Elevated selling expenses could erode profitability in the long term if it becomes inefficient.

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Trading Information

Previous Close Price
HK$16.54
Day Range
HK$16.35–16.70
52-Week Range
HK$13.88–18.07
Bid/Ask
HK$16.59 / HK$16.61
Shares Outstanding
3.87B
Market Cap
HK$64.26B
Volume/Avg
11M / 21M

Key Statistics

Price/Earnings (Normalized)
37.18
Price/Sales
0.72
Dividend Yield (Trailing)
3.61%
Dividend Yield (Forward)
3.61%
Total Yield
4.54%

Company Profile

China Mengniu Dairy is China’s second-largest dairy producer by market share. The company produces a wide range of dairy products, including liquid milk, yogurt, ice cream, infant milk formula, and cheese. Liquid milk, composed of milk, milk beverages, and yogurt, contributed roughly 80% of Mengniu’s revenue in 2024. Flagship lineups include Deluxe, Mengniu Pure Milk, Just Yoghurt, and Yoyi C. Mengniu also owns two infant formula brands, Yashili and Bellamy, as well as Milkground, a cheese brand.
Sector
Consumer Defensive
Industry
Packaged Foods
Stock Style Box
Large Value
Total Number of Employees
38,000
Website
https://www.mengniuir.com

Competitors

Valuation

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Metric
02319
600887
GIS
Price/Earnings (Normalized)
 37.1814.6410.10
Price/Book Value
 1.432.721.93
Price/Sales
 0.721.370.99
Price/Cash Flow
 7.439.448.24
Price/Earnings
02319
600887
GIS

Financial Strength

Metric
02319
600887
GIS
Quick Ratio
 0.840.260.30
Current Ratio
 1.000.690.56
Interest Coverage
 3.139.176.42
Quick Ratio
02319
600887
GIS

Profitability

Metric
02319
600887
GIS
Return on Assets (Normalized)
 4.89%7.68%5.51%
Return on Equity (Normalized)
 12.04%20.85%19.36%
Return on Invested Capital (Normalized)
 6.52%9.58%9.30%
Return on Assets
02319
600887
GIS

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