In "Major Banks," China International Capital Corporation: Mengniu Dairy's performance during the Spring Festival exceeded expectations, and the fundamentals are expected to gradually improve this year

CICC published a research report stating that Mengniu Dairy (02319.HK) performed better than expected during the Spring Festival, with demand expected to stabilize in 2026. According to the announced revenue range, revenue in the second half of 2025 is expected to decline by 7.1% to 9.1% year-on-year, mainly due to weak demand and intensified competition at the terminal level. The firm expects that ambient white milk will be the most pressured, while cheese and milk powder businesses will grow double digits year-on-year, low-temperature yogurt will see slight year-on-year growth, and low-temperature fresh milk will grow double digits year-on-year.

The company is actively adjusting its sales structure and distribution model in 2025, and is lowering the ex-factory price of its basic product, Telunsu, to improve channel profits, with channel health expected to significantly improve in 2025. The firm anticipates that the company's sales and shipment performance will be good this Spring Festival, with improved product freshness, healthy inventory, and strengthened terminal service efforts. It is expected that liquid milk demand will stabilize in 2026, and revenue growth is expected to turn positive.

CICC maintains a "Outperform Industry" rating on Mengniu Dairy, with a target price of 23 yuan