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2026-11-02 15:19:23 UBS published a research report saying that after recent discussions with management of MENGNIU DAIRY (02319.HK), management reiterated its FY2026 guidance of high-single-digit YoY revenue growth and operating margin of at least 8%. The management remains positive on maintaining solid sales growth next year and expects operating margin to further expand by 30 to 50 bps. Its mid-term target remains restoring revenue to above RMB100 billion, driven by a more diversified portfolio supported by higher value-added businesses. The broker noted that among liquid milk products, fresh milk continued to outperform with growth of about 30%, while chilled yogurt resumed growth. Deluxe Milk pricing and sales recovery were also better than expected. Milk powder maintained strong momentum, with Bellamy's driving growth of more than 50%. Cheese products recorded double-digit growth, while international business also achieved double-digit growth. The overall growth mix is gradually shifting from traditional liquid milk to higher value-added businesses such as cheese, milk powder, ice cream, international operations and medical nutrition, supporting portfolio improvement and margin expansion. Management expects raw milk supply and demand to tighten over the next two to three years, driving a moderate recovery in prices. Capital expenditure next year will remain disciplined at about RMB2 billion, while strong free cash flow provides room for further improvement in dividends and shareholder returns. The broker believes continued operating margin expansion, business mix improvement and stronger shareholder returns should drive further re-rating. It maintained the Buy rating and HKD22 TP. (gc/da)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |