[ET Net News Agency, 31 December 2020] Morgan Stanley raised its target price for China
Mengniu Dairy (02319) to HK$50 from HK$45 factoring in higher earnings growth in outer
years and maintained its "overweight" rating.
The research house expects on-track growth in 2H at low teens percentage in top line and
30-50bps expansion in OPM organically. Sales growth in 3Q-October was slightly ahead of
target but growth in November and December was weaker due to late CNY timing in 2021.
Morgan thinks Mengniu could deliver low double-digit sales growth and OPM expansion from
continued penetration and mix upgrade via new products (such as IMF and cheese) in the
next 2-3 years. (KL)