UBS: Raises target price for Mengniu Dairy to HKD 23.3, reiterates "Buy" rating
UBS released a research report stating that Mengniu Dairy has entered a stage of quality growth, with more disciplined cost control expected. It is anticipated that raw milk prices will bottom out and rebound in the second half of 2025, which will help enhance market competitiveness. In 2024, Mengniu Dairy's sales of liquid milk/ice cream/formula milk powder/cheese will be pressured under economic slowdown, while gross margins will decline due to the impact of raw milk prices. Overall, Mengniu Dairy's performance last year was basically in line with expectations. The bank slightly raised the group's earnings per share for 2025-2026 by 1-2% to reflect effective cost management. Based on the new DCF valuation, the target price was raised by 14%, from HKD 20.5 to HKD 23.3, reiterating the "Buy" rating
According to the Zhitong Finance APP, UBS has released a research report stating that Mengniu Dairy (02319) has entered a phase of quality growth, with more disciplined cost control expected. It is anticipated that raw milk prices will bottom out and rebound in the second half of 2025, which will help enhance market competitiveness. In 2024, Mengniu Dairy's sales of liquid milk/ice cream/formula milk powder/cheese will be under pressure due to the economic slowdown, while gross margins will decline due to the impact of raw milk prices. Overall, Mengniu Dairy's performance last year was basically in line with expectations. The bank slightly raised the group's earnings per share for 2025-2026 by 1-2% to reflect effective cost management. Based on the new DCF valuation, the target price has been raised by 14%, from HKD 20.5 to HKD 23.3, and the "Buy" rating has been reaffirmed
