[ET Net News Agency, 8 November 2017] Deutsche Bank raised its target price for China
Mengniu Dairy (02319) to HK$26.8 from HK$23.6, and maintained its "buy" rating.
The research house expects the dairy sector to enter an undersupply cycle from 2018. In
this new cycle, competition will switch from price to raw milk sourcing. Helped by their
closer relationship with dairy farms, Mengniu should be able to gain market share faster
in the next three years.
DB expects Mengniu to narrow its profitability gap with Yili, helped by recovering
efficiency after the company's organizational restructuring in 2016 and improving IMF
operations helped by industry recovery.
It forecast Mengniu's recurring EBIT margin to expand from 6.1% in 1H to 7% in 2019.
DB increased its earnings forecasts by 1-3% and expect a 31% recurring earnings CAGR in
2017-19. (KL)
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02319 MENGNIU DAIRY
Nominal 
15.200 -0.360 (-2.314%) Others
08/11/2017 17:45
[I-bank focus]DB lifts Mengniu Dairy (02319) to HK$26.8
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