Mengniu Dairy (02319) rose more than 4%, as of publication, up 4.23% to HKD 13.52, with a turnover of 0.133 billion Hong Kong dollars.
According to the Zhongtong Financial APP, Mengniu Dairy (02319) rose more than 4%, as of publication, up 4.23% to HKD 13.52, with a turnover of 0.133 billion Hong Kong dollars.
GF SEC previously pointed out that the growth of the dairy product industry has slowed down in recent years. However, the leading dairy product companies have a good business model and strong discourse power in the industry chain, and have the ability to create free cash flow in the long term. Among them, both Yili and Mengniu will achieve record high free cash flow in 2023, and the dividend ratio will be increased. The bank said that in 2023, Mengniu will increase its dividend ratio to 40.0%, and it is expected that the dividend ratio of Mengniu will still have the potential to increase in the future.
Macquarie published a research report stating that due to weak demand for milk and fierce market competition, it is expected that Mengniu's performance in the first half of the year will be under pressure. However, considering that the price of raw milk in the industry fell by more than 10% in the first half of this year, Macquarie believes that the price decline is sufficient to offset the negative impact of market competition. The bank believes that the industry may reach supply-demand balance as early as the second half of this year. Under the weak industry demand, Mengniu is expected to control capital expenditures, enhance shareholder returns, and achieve a full-year dividend yield of 3.8%.