China Shengmu Organic Milk Ltd (1432) AI Stock Analysis

• Market Cap: HK$2.89B
• Dividend Yield: 0.67%
• Average Volume (3M): 9.89M
• Price to Earnings (P/E): 83.8
• Beta (1Y): 0.43
• Revenue Growth: -7.11%
• EPS Growth: N/A
• Country: HK
• Employees: 2,217
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Agricultural Farm Products
• EPS (TTM): >-0.01
• Shares Outstanding: 8,381,295,000
• 10 Day Avg. Volume: 11,822,501
• 30 Day Avg. Volume: 9,892,705
• PEG Ratio: 0.11
• Price to Book (P/B): 0.33
• Price to Sales (P/S): 0.42
• P/FCF Ratio: -2.69
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 53 Neutral
• Price Target: HK$0.50 ▲(51.52% Upside)

The overall stock score of 53 reflects significant financial performance challenges, including declining revenue, profitability, and cash flow issues. Technical analysis shows some short-term bullish momentum, but valuation concerns persist with a high P/E ratio and low dividend yield. The absence of earnings call and corporate events data limits further insights.

Positive Factors

Vertically Integrated Business Model

A vertically integrated model enhances control over production quality and cost efficiencies, supporting long-term competitive advantage.

Organic Certification

Organic certification enables premium pricing and aligns with growing consumer demand for organic products, boosting long-term revenue potential.

Strategic Partnerships

These partnerships expand distribution channels and brand visibility, potentially increasing market share and sustaining growth.

Negative Factors

Declining Revenue

Declining revenue indicates challenges in market demand or competitive positioning, potentially impacting long-term financial health.

Profitability Challenges

Negative profitability suggests inefficiencies and cost management issues, which could hinder sustainable growth and investor confidence.

Cash Flow Issues

Lack of cash flow generation poses liquidity risks, limiting the company's ability to invest in growth opportunities and manage debt.

China Shengmu Organic Milk Ltd Business Overview & Revenue Model

Company Description

China Shengmu Organic Milk Ltd (1432) is a leading producer and supplier of organic milk and dairy products based in China. The company specializes in the cultivation of organic dairy farming and is committed to producing high-quality, healthy dairy goods. Its core products include organic milk, yogurt, cheese, and other dairy items, catering to the increasing consumer demand for organic and nutritious food options within the growing health-conscious market in China.

How the Company Makes Money

China Shengmu Organic Milk Ltd generates revenue primarily through the sale of its organic milk and dairy products to both domestic and international markets. The company operates a vertically integrated business model, where it manages the entire supply chain from the breeding of dairy cows to the processing and distribution of dairy products. Key revenue streams include direct sales to retailers and supermarkets, distribution partnerships with food service companies, and online sales channels. Additionally, the company benefits from its certification as an organic producer, which allows it to command premium prices for its products. Strategic partnerships with local farmers for sourcing organic feed and collaborations with health-focused brands further enhance its market reach and profitability.

China Shengmu Organic Milk Ltd Financial Statement Overview

Summary

China Shengmu Organic Milk Ltd is facing challenges with declining revenue, profitability, and cash flow. The income statement reveals negative growth and reduced margins, while the balance sheet remains stable with manageable leverage. However, profitability has decreased as indicated by negative ROE. The cash flow statement reflects significant cash flow issues, posing potential liquidity risks. The company needs to address these areas to improve its financial health and sustainability.

Income Statement

The company experienced a negative revenue growth rate of -7.61% from 2023 to 2024, indicating a decline in sales. Gross profit margin decreased from 30.29% in 2023 to 28.95% in 2024, suggesting reduced efficiency in cost management. The net profit margin turned negative at -2.09% in 2024 from 2.54% in 2023, highlighting profitability challenges. The EBIT margin remained relatively stable at 22.41% in 2024. Overall, the company shows signs of declining performance with shrinking margins and negative growth.

Balance Sheet

The debt-to-equity ratio increased slightly from 0.54 in 2023 to 0.59 in 2024, indicating a moderate rise in leverage but still within a reasonable range. The equity ratio decreased marginally from 47.23% in 2023 to 46.82% in 2024, reflecting a stable balance sheet structure. However, return on equity (ROE) dropped significantly to -1.65% in 2024, suggesting inefficiencies in generating returns on shareholders' equity. Overall, the balance sheet remains stable but shows signs of strain on profitability.

Cash Flow

The company reported zero operating cash flow and free cash flow in 2024, indicating cash flow challenges. The previous year's operating cash flow was positive at 940.28 million, showing a significant decline. The free cash flow to net income ratio was not calculable for 2024 due to zero free cash flow, highlighting potential liquidity concerns. Overall, the cash flow position appears weak, with no clear signs of improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.08B	3.13B	3.38B	3.18B	2.98B	2.66B
Gross Profit	404.19M	925.89M	1.03B	1.01B	1.06B	1.03B
EBITDA	314.51M	809.48M	900.27M	922.50M	997.18M	991.51M
Net Income	29.86M	-65.50M	86.08M	416.46M	471.71M	406.68M
Balance Sheet
Total Assets	8.03B	8.46B	8.52B	7.89B	7.13B	6.73B
Cash, Cash Equivalents and Short-Term Investments	998.49M	697.23M	525.46M	994.08M	579.57M	367.17M
Total Debt	2.30B	2.33B	2.18B	1.85B	1.68B	1.37B
Total Liabilities	3.90B	4.29B	4.28B	3.63B	3.24B	3.31B
Stockholders Equity	3.92B	3.96B	4.02B	4.06B	3.68B	3.20B
Cash Flow
Free Cash Flow	43.64M	-482.21M	-375.46M	126.00M	224.27M	393.57M
Operating Cash Flow	698.60M	916.23M	940.28M	1.12B	1.03B	1.09B
Investing Cash Flow	-431.81M	-966.85M	-1.15B	-1.06B	-1.07B	-267.06M
Financing Cash Flow	-256.52M	86.06M	118.43M	-98.82M	238.32M	-625.45M

China Shengmu Organic Milk Ltd Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 0.33
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1432, the sentiment is Neutral. The current price of 0.33 is below the 20-day moving average (MA) of 0.34, below the 50-day MA of 0.33, and above the 200-day MA of 0.29, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 46.79 is Neutral, neither overbought nor oversold. The STOCH value of 44.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:1432.

China Shengmu Organic Milk 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%	0.67%	-7.11%	―

China Shengmu Organic Milk Ltd Corporate Events

China Shengmu Renews Key Milk Supply Agreement with Mengniu

China Shengmu Organic Milk Ltd has announced the renewal of its Raw Fresh Milk Supply Framework Agreement with Inner Mongolia Mengniu, a subsidiary of China Mengniu, for a three-year term starting from January 2026. This agreement, which is subject to shareholder approval due to its significant financial implications, underscores the company’s ongoing strategic partnership with China Mengniu and highlights its role as a key supplier in the organic milk sector.

China Shengmu Enters New Supply Framework Agreement with Dabeinong

China Shengmu Organic Milk Ltd has entered into a new 2026 Dabeinong Products and Services Supply Framework Agreement with Dabeinong Group and Yiyingmei Dairy, effective from January 1, 2026, to December 31, 2028. This agreement aims to enhance the flexibility and cost-effectiveness of the company’s procurement of products and services, including feed, additives, medicines, and milk powder, while also providing processing services for milk powder production. The agreement replaces previous framework agreements set to expire, and due to the involvement of connected persons, it requires independent shareholders’ approval under Hong Kong’s Listing Rules.

China Modern Dairy Proposes Acquisition of China Shengmu Organic Milk

China Modern Dairy Holdings Ltd has announced a possible mandatory conditional cash offer to acquire all issued shares of China Shengmu Organic Milk Ltd, not already owned by them or Start Great Holdings Limited. An independent board committee has been established to evaluate the fairness and reasonableness of the offer, which is priced at HK$0.35 per share, and provide a recommendation to shareholders.

China Shengmu Organic Milk Ltd Announces Board Changes

China Shengmu Organic Milk Ltd announced a significant change in its board composition, with the resignation of Mr. Zhao Jiejun due to personal health reasons and the appointment of Mr. Bai Fengming as a non-executive director. Mr. Bai brings extensive experience from the Mengniu Group, where he has demonstrated strong leadership and innovative sales strategies in the dairy sector. This strategic appointment is expected to enhance the company’s market positioning and operational effectiveness.

China Shengmu Organic Milk Updates Board of Directors

China Shengmu Organic Milk Limited has announced an update to its board of directors, effective October 6, 2025. The company, incorporated in the Cayman Islands, operates within the dairy industry, focusing on organic milk production. The new board structure includes executive directors, non-executive directors, and independent non-executive directors, with specific roles assigned within four board committees: Audit, Remuneration, Nomination, and Strategy and Sustainability. This restructuring is expected to enhance the company’s governance and strategic direction, potentially impacting its market positioning and stakeholder relations.