China Modern Dairy Holdings Ltd. (1117) AI Stock Analysis

• Market Cap: HK$11.52B
• Dividend Yield: 0.91%
• Average Volume (3M): 15.73M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.72
• Revenue Growth: -2.69%
• EPS Growth: -695.87%
• Country: HK
• Employees: 9,007
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Agricultural Farm Products
• EPS (TTM): -0.13
• Shares Outstanding: 7,915,662,000
• 10 Day Avg. Volume: 12,622,842
• 30 Day Avg. Volume: 15,732,775
• PEG Ratio: <0.01
• Price to Book (P/B): 0.71
• Price to Sales (P/S): 0.51
• P/FCF Ratio: -3.35
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: HK$1.50 ▲(3.45% Upside)

The overall stock score of 55 reflects significant financial challenges, including negative profitability and liquidity issues, despite some positive technical indicators. The valuation is also concerning due to a negative P/E ratio, suggesting caution for potential investors.

Positive Factors

Operational Efficiency

Stable EBIT and EBITDA margins indicate efficient operations, suggesting the company can manage costs effectively, which is crucial for long-term sustainability.

Market Demand

Growing demand for dairy products in China supports revenue potential, driven by consumer trends towards healthier diets and higher protein intake.

Economies of Scale

Economies of scale from large dairy farms enable cost-effective production, enhancing competitive advantage and supporting long-term profitability.

Negative Factors

Profitability Challenges

Negative net margin and shrinking revenue highlight profitability challenges, which could hinder financial stability and growth prospects.

Increased Leverage

Increased leverage with a higher debt-to-equity ratio poses financial risks, potentially limiting the company's ability to invest in growth or weather downturns.

Cash Flow Issues

Zero operating and free cash flows indicate liquidity issues, which can affect the company's ability to fund operations and invest in future growth.

China Modern Dairy Holdings Ltd. Business Overview & Revenue Model

Company Description

China Modern Dairy Holdings Ltd., an investment holding company, produces and sells milk in Mainland China. It produces and sells raw milk to customers for processing into dairy products; and liquid milk products. The company is also involved in breeding dairy cows; selling feeds; and producing fodder. As of December 31, 2021, it operated 33 farms. The company was founded in 2005 and is headquartered in Maanshan, the People's Republic of China. China Modern Dairy Holdings Ltd. is a subsidiary of China Mengniu Dairy Company Limited.

How the Company Makes Money

China Modern Dairy Holdings Ltd. generates revenue primarily through the sale of its dairy products, including liquid milk, yogurt, and cheese, to both retail consumers and food service providers. The company benefits from economies of scale due to its large dairy farms, which allow for cost-effective milk production. Additionally, it may engage in partnerships with supermarkets and distributors to enhance its market reach. The company's revenue model is supported by the increasing demand for dairy products in China, driven by consumer trends toward healthier diets and higher protein intake. Strategic investments in technology and farm management also contribute to optimizing production efficiency and reducing costs, further bolstering its earnings potential.

China Modern Dairy Holdings Ltd. Financial Statement Overview

Summary

China Modern Dairy Holdings Ltd. shows operational efficiency with stable EBIT and EBITDA margins. However, it faces significant profitability challenges with a negative net margin and shrinking revenue. The balance sheet reveals increased leverage and reduced equity, posing financial stability concerns. Cash flow issues amplify liquidity risks, requiring strategic financial management.

Income Statement

The income statement shows fluctuating revenues, with a recent decline from 2023 to 2024, resulting in a negative growth rate of -1.51%. Gross profit margin in 2024 was 26.05%, indicating decent operational efficiency, though net profit margin turned negative at -10.69% due to a significant net loss. EBIT and EBITDA margins were 16.93% and 19.65% respectively, reflecting stable operational performance before interest and taxes but highlighting concerns about net profitability.

Balance Sheet

The balance sheet indicates a strong asset base with a total of HKD 33.94 billion. However, the debt-to-equity ratio increased to 1.77 in 2024, suggesting increased leverage. Stockholders' equity decreased, leading to a lower equity ratio of 28.08%, down from previous years, which could pose financial risks. The return on equity has drastically fallen due to negative net income.

Cash Flow

Cash flows are under stress with zero reported operating and free cash flows in 2024. There is a significant drop from the previous year's operating cash flow of HKD 5.45 billion, indicating potential liquidity issues. Free cash flow growth rate is negative, signaling cash generation challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	12.91B	13.25B	13.46B	12.30B	7.08B	6.02B
Gross Profit	3.38B	3.45B	3.13B	3.27B	2.55B	2.46B
EBITDA	2.57B	2.60B	1.19B	1.40B	1.58B	2.15B
Net Income	-2.10B	-1.42B	175.16M	562.50M	1.02B	770.01M
Balance Sheet
Total Assets	33.39B	33.94B	31.39B	28.82B	23.67B	15.57B
Cash, Cash Equivalents and Short-Term Investments	3.90B	3.06B	1.96B	2.14B	1.89B	1.17B
Total Debt	19.28B	16.90B	13.52B	13.54B	9.06B	5.86B
Total Liabilities	23.33B	22.82B	19.55B	17.18B	12.56B	7.53B
Stockholders Equity	8.53B	9.53B	11.20B	11.26B	10.86B	7.90B
Cash Flow
Free Cash Flow	-1.94B	-2.02B	1.12B	-2.48B	-125.57M	454.39M
Operating Cash Flow	2.50B	2.40B	5.45B	1.58B	1.87B	1.94B
Investing Cash Flow	-4.13B	-3.97B	-3.88B	-3.99B	-2.87B	-765.73M
Financing Cash Flow	1.51B	2.00B	-1.63B	2.59B	1.64B	-963.99M

China Modern Dairy Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.45
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1117, the sentiment is Positive. The current price of 1.45 is above the 20-day moving average (MA) of 1.36, above the 50-day MA of 1.28, and above the 200-day MA of 1.19, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 64.24 is Neutral, neither overbought nor oversold. The STOCH value of 70.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1117.

China Modern Dairy Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1431	65 Neutral	HK$1.14B	3.79	5.66%	―	13.78%	432.26%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
9858	59 Neutral	HK$19.70B	-26.17	-5.81%	―	3.07%	-64.23%
1117	55 Neutral	HK$11.52B	-5.02	-21.76%	0.91%	-2.69%	-695.87%
1432	53 Neutral	HK$2.89B	83.75	0.82%	0.69%	-7.11%	―

China Modern Dairy Holdings Ltd. Corporate Events

China Modern Dairy Extends Offer Document Dispatch Timeline for Shengmu Acquisition

China Modern Dairy Holdings Ltd. has announced an extension for the dispatch of the offer document related to a possible mandatory conditional cash offer to acquire all issued shares of China Shengmu Organic Milk Limited. This extension is due to the need for additional time to satisfy conditions under the Share Purchase Agreements and to finalize information for the offer document. The extension aims to ensure all necessary conditions are met and is expected to impact the timeline for the acquisition process.

China Modern Dairy Reports Subsidiary’s Financial Performance

China Modern Dairy Holdings Ltd. announced the unaudited consolidated financial information of its non-wholly owned subsidiary, Modern Farming (Group) Co., Ltd., for the nine months ending September 30, 2025. The financial data, prepared according to PRC Generally Accepted Accounting Principles, highlights the company’s ongoing financial activities, including the issuance of domestic short-term debentures and medium-term notes. Stakeholders are advised to exercise caution as the information is limited to Modern Farming and may not fully represent the overall operational status of China Modern Dairy Holdings Ltd.

China Modern Dairy Expands Stake in Organic Milk Sector

China Modern Dairy Holdings Ltd. has entered into conditional agreements to purchase shares of China Shengmu Organic Milk Limited, totaling 107,200,000 shares for HK$37,520,000. This transaction is part of a broader strategic move, including a possible mandatory conditional cash offer and a major connected transaction, to strengthen its influence in the organic milk market. Additionally, Start Great has granted an irrevocable voting proxy to China Modern Dairy over a significant portion of its shares, enhancing CMD’s decision-making power within China Shengmu.

China Modern Dairy Announces Board Restructuring

China Modern Dairy Holdings Ltd. has announced changes to its board of directors, effective October 1, 2025. The board now comprises executive, non-executive, and independent non-executive directors, with Mr. SUN Yugang as CEO and Mr. CHEN Yiyi as Chairman. The board has also established five committees to oversee various aspects of the company’s operations, including audit, nomination, remuneration, strategy and development, and sustainability. These changes are expected to enhance the company’s governance and strategic direction, potentially impacting its market position and stakeholder relations.

China Modern Dairy Announces Board and Committee Changes

China Modern Dairy Holdings Ltd. has announced significant changes to its board of directors and committees, effective October 1, 2025. Mr. Wen Yongping will join as a non-executive director and chairman of the Sustainability Committee, while Mr. Li Shengli and Mr. Lee Kong Wai, Conway, will become members of the Nomination Committee. These changes are expected to enhance the company’s governance and strategic direction, particularly in sustainability, as Mr. Wen brings extensive experience from his tenure at China Mengniu Dairy Company Limited.