Lates News

Yamato published a research report stating that in the first half of the year, the revenue of Mengniu Dairy decreased by 6.9% year-on-year, which was 3% lower than market expectations, while operating profit reached 3.5 billion yuan, an increase of 13% year-on-year, which was 9% higher than market expectations. The management guided that the full-year revenue will decrease by a mid to high single-digit percentage, and the full-year operating profit margin will remain unchanged year-on-year. The bank estimates that this means the revenue in the second half of the year will decrease by 6 to 7% year-on-year, and the operating profit margin will narrow to about 8%, resulting in a drop in operating profit in the second half by approximately 20%. Due to weak channel capabilities, Mengniu is losing market share to Yili. The bank maintains a "buy" rating on Mengniu with a target price lowered from HK$26.5 to HK$22.