China Mengniu Dairy Co (2319) AI Stock Analysis

• Market Cap: HK$70.12B
• Dividend Yield: 2.98%
• Average Volume (3M): 18.82M
• Price to Earnings (P/E): 629.1
• Beta (1Y): 1.28
• Revenue Growth: -11.90%
• EPS Growth: -97.93%
• Country: HK
• Employees: 41,058
• Sector: Consumer Defensive
• Sector Strength: 68
• Industry: Packaged Foods
• EPS (TTM): 0.82
• Shares Outstanding: 3,912,040,500
• 10 Day Avg. Volume: 25,097,135
• 30 Day Avg. Volume: 18,824,589
• PEG Ratio: -1.41
• Price to Book (P/B): 1.64
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.96
• 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: HK$24.40
• Price Target Upside: 35.88% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 60 Neutral
• Price Target: HK$19.00 ▲(5.79%Upside)

The stock score is primarily influenced by solid financial performance marked by strong revenue generation and operational efficiency. Technical analysis indicates weak momentum, with the stock trading below short-term moving averages and negative MACD. Valuation is a significant concern due to an extremely high P/E ratio, although the dividend yield offers some relief. The absence of earnings call and corporate events data does not affect the score.

Positive Factors

Operating Margin

Operating margin rose due to lower raw milk prices and effective cost management.

Product Expansion

Mengniu is focusing on rolling out more value-for-money and targeted products to increase market penetration, especially in lower-tier markets.

Sales Growth

Shiny Meadow, Mengniu's fresh milk brand, delivered over 20% sales growth and is set to expand further.

Negative Factors

Consumption and Competition Risks

Key risks include weaker-than-expected consumption, volatility in raw material prices, keen competition, and execution risks on M&As.

Sales Forecast

Earnings were cut by 3% as sales forecasts were revised down.

China Mengniu Dairy Co Business Overview & Revenue Model

Company Description

China Mengniu Dairy Co., Ltd. is one of the leading dairy product manufacturers in China, specializing in the production and distribution of a wide range of dairy products. The company operates in various sectors including liquid milk, ice cream, milk formula, and other dairy-related products. Mengniu's core products include milk, yogurt, milk beverages, and infant formula, catering to a broad consumer base across China and expanding into international markets.

How the Company Makes Money

China Mengniu Dairy Co. generates revenue primarily through the sale of its diverse portfolio of dairy products. The company's key revenue streams include liquid milk, yogurt, and milk beverages, which constitute the largest portion of its income. Mengniu also earns from its ice cream products and infant formula, which have seen growing demand. The company leverages a robust distribution network and strategic partnerships with retailers and distributors to ensure widespread availability of its products. Additionally, Mengniu invests in marketing and brand-building initiatives to enhance its market presence and consumer loyalty, further driving sales. The company's earnings are also supported by its efforts in product innovation and expansion into international markets.

China Mengniu Dairy Co Financial Statement Overview

Summary

China Mengniu Dairy Co shows solid revenue generation and operational efficiency, but faces challenges in profitability and return on equity. The balance sheet indicates increased leverage, which may pose financial risks if not managed. Cash flows are generally strong, supporting operational stability. Despite some challenges, the company maintains a stable financial standing with room for improvement in profitability metrics.

Income Statement

China Mengniu Dairy Co has shown a consistent increase in total revenue over the years, although there was a decline in 2023. The gross profit margin is healthy, indicated by a 2023 margin of approximately 37.1%. EBIT margin shows improvement over recent years, closing at 6.8% in 2023, highlighting efficient operations. However, the net profit margin is relatively low, at just 0.1% in 2023, suggesting challenges in translating revenue into profit.

Balance Sheet

The company's debt-to-equity ratio has increased, standing at about 0.84 in 2023, reflecting a higher leverage than in previous years, which could pose financial risk. The equity ratio is stable, maintaining around 38.5% in 2023, demonstrating a solid equity base. However, the return on equity has significantly decreased, falling to around 0.2% in 2023, indicating challenges in generating returns for shareholders.

Cash Flow

Operating cash flow remains robust, slightly declining to HKD 8.3 billion in 2023. The free cash flow growth is positive, indicating effective capital spending control. The operating cash flow to net income ratio is strong, showcasing the company's ability to generate cash relative to its net income. Nonetheless, the free cash flow to net income ratio might highlight issues due to low net income in 2023.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
92.18B	88.67B	98.62B	92.59B	88.14B	76.03B
	Gross Profit
34.35B	35.09B	36.64B	32.69B	32.39B	28.63B
	EBIT
5.27B	7.68B	6.73B	8.05B	6.63B	5.32B
	EBITDA
7.97B	5.87B	11.18B	10.51B	9.01B	6.86B
	Net Income Common Stockholders
4.23B	104.51M	4.81B	5.30B	5.03B	3.53B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
10.27B	25.48B	13.66B	19.59B	15.88B	19.15B
	Total Assets
49.12B	106.29B	115.22B	117.81B	98.10B	80.15B
	Total Debt
8.64B	34.64B	37.41B	39.11B	27.03B	18.94B
	Net Debt
2.57B	17.30B	24.97B	26.34B	15.82B	7.55B
	Total Liabilities
23.62B	58.27B	64.57B	67.76B	56.10B	42.90B
	Stockholders Equity
20.84B	41.56B	44.32B	40.10B	36.83B	32.98B
Cash Flow		Free Cash Flow
3.22B	4.86B	4.21B	3.27B	1.32B	933.39M
	Operating Cash Flow
6.82B	8.33B	8.35B	8.33B	7.54B	5.35B
	Investing Cash Flow
4.75B	-3.50B	-285.83M	-14.86B	-15.44B	4.82B
	Financing Cash Flow
-9.01B	-6.33B	-6.80B	4.15B	6.77B	-4.57B

China Mengniu Dairy Co Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.96
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2319, the sentiment is Negative. The current price of 17.96 is below the 20-day moving average (MA) of 18.02, below the 50-day MA of 18.80, and above the 200-day MA of 16.89, indicating a neutral trend. The MACD of -0.27 indicates Negative momentum. The RSI at 44.46 is Neutral, neither overbought nor oversold. The STOCH value of 80.11 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:2319.

China Mengniu Dairy Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0151	79 Outperform	$61.61B	13.95	27.44%	4.96%	-3.11%	15.29%
0288	75 Outperform	HK$93.28B	7.42	15.73%	6.92%	-1.46%	155.31%
0322	69 Neutral	$72.37B	17.90	26.55%	2.32%	-1.69%	17.32%
1717	66 Neutral	HK$3.47B	13.57	4.14%	2.56%	-1.56%	30.87%
Sector *	65 Neutral	$8.88B	14.98	4.76%	203.76%	3.54%	-2.49%
2319	60 Neutral	HK$70.12B	629.07	0.21%	2.98%	-11.90%	-97.93%

China Mengniu Dairy Co Corporate Events

China Mengniu Dairy Announces 2025 AGM and Key Resolutions

China Mengniu Dairy Company Limited has announced its upcoming annual general meeting, scheduled for June 12, 2025, in Hong Kong. Key agenda items include the review of the 2024 financial statements, approval of a final dividend of RMB 0.509 per share, re-election of directors, and re-appointment of KPMG as auditors. Additionally, the company seeks approval for a share repurchase program, allowing the repurchase of up to 10% of its share capital, which could impact its market positioning and shareholder value.

China Mengniu Dairy Announces Board Composition and Committee Assignments

China Mengniu Dairy Company Limited has announced the composition of its board of directors, including executive, non-executive, and independent non-executive directors. The board has established five committees: Audit, Nomination, Remuneration, Strategy and Development, and Sustainability, with various directors assigned to each. This announcement highlights the company’s governance structure, which is crucial for strategic decision-making and maintaining stakeholder confidence.

China Mengniu Dairy Grants Restricted Shares to Key Employees

China Mengniu Dairy Company Limited has approved the grant of 5,643,871 restricted shares under its Restricted Share Award Scheme, representing approximately 0.158% of the company’s issued share capital. This initiative aims to reward and incentivize selected participants, including directors, senior management, and other employees, who have contributed to the company’s performance and will support its sustainable development. The shares will vest over three years, subject to performance targets related to the company’s financial performance, thereby aligning employee interests with the company’s growth objectives.

China Mengniu Dairy Announces Board Changes to Enhance Strategic Position

China Mengniu Dairy Company Limited announced a significant change in its board composition, effective April 1, 2025. Mr. Simon Dominic Stevens will resign from his roles, including as a non-executive director and chairman of the Sustainability Committee, to focus on personal commitments. He will be succeeded by Ms. Lillie Li Valeur, who brings extensive international experience from her previous roles at Arla Foods and other global companies. This appointment is expected to strengthen Mengniu’s strategic position in the global dairy market, leveraging Ms. Valeur’s expertise in commercial leadership and strategic partnerships.

China Mengniu Dairy Co Reports 2024 Financial Results Amid Strategic Shifts

China Mengniu Dairy Co reported a 10.1% decrease in revenue for 2024, attributed to an imbalance in supply and demand and lower consumer demand. Despite this, the company increased its gross profit margin and operating profit margin through strategic initiatives like channel optimization and new business development. The company faced challenges with impairment losses from its subsidiary Bellamy’s and associates, but maintained stable cash inflow. Mengniu is committed to shareholder returns, proposing a higher dividend payout ratio and a focus on sustainability initiatives, including a ‘GREEN’ strategy and a ‘1+N’ Sustainability Report Disclosure System.

China Mengniu Dairy Announces Final Dividend for 2024

China Mengniu Dairy Company Limited has announced a final cash dividend of RMB 0.509 per share for the financial year ending December 31, 2024. The dividend is set to be approved by shareholders on June 12, 2025, with the payment scheduled for June 27, 2025. This announcement reflects the company’s commitment to returning value to its shareholders and may positively impact its market positioning and investor relations.