[ET Net News Agency, 20 July 2018] Moody's Investors Service has affirmed China Mengniu
Dairy Company Limited's Baa1 issuer rating and Baa1 senior unsecured debt rating.
The ratings outlook is stable.
"The affirmation reflects Mengniu's solid financial profile, as we expect the company to
maintain EBITDA growth in 2018 and 2019, which will enable a gradual reduction in its
leverage," said Lina Choi, a Moody's Vice President and Senior Credit Officer.
Moody's expects total revenue will grow by around 10% in 2018, as the company leverages
its extensive distribution network, effective online channel, and its exclusive status as
the milk sponsor for the FIFA World Cup 2018.
Moody's also expects Mengniu to maintain moderate EBITDA growth, helped by ongoing
product upgrades, steady raw milk prices and the reduction in losses from Yashili,
Mengniu's infant milk formula business.
Yashili reported a reduction in the net loss attributable to shareholders by 43.8% to
RMB179.8 million in 2017. Moody's believes the infant milk powder business is completely
integrated into Mengniu's operating and distribution platforms, and that it will continue
to enhance revenue and profit margins in 2018. (KL)