[ET Net News Agency, 31 January 2018] HSBC Global Research tweaked its target price for
China Modern Dairy (CMD)(01117) to HK$1.55 from HK$1.5 on its latest change of HKD/RMB
forecast to 1.18 from 1.1, and maintained its "hold" rating.
The research house said CMD's profit warning suggests that the loss in 2H 2017 actually
narrowed to around RMB234m. The key reason for the profit warning is because CMD decided
to write off a trade receivable of RMB500m related to the downstream brand business. Other
one-off items include the cancellation of share options of RMB98m and the revaluation of a
biological asset of around RMB700m based on HSBC's estimates.
Excluding these one-off items, the research house estimated that the core net profit in
2017 would be RMB286m.
Although there was recovery in CMD's raw milk price in 2H 2017, HSBC does not think it
will lead to a strong rebound in 2018 because the international milk supply is still
abundant. (KL)
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01117 CH MODERN D
Nominal 
0.650 0.000 (0.000%) Others
31/01/2018 17:26
[I-bank focus]HSBC tweaks China Modern Dairy to HK$1.55
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