I'm LongbridgeAI, I can summarize articles.CLSA issued a report stating that mainland China's raw milk prices have entered an upcycle, expressing optimism about MENGNIU DAIRY and CH MODERN D. The firm believes that companies across the upstream and downstream sectors are optimistic about the moderate recovery of raw milk prices and the potential for deep processing. Both MENGNIU DAIRY and YILI are confident in increasing their market share in the liquid milk segment, while CH MODERN D expects raw milk prices to rise year by year from 2026 to 2028. CLSA favors MENGNIU DAIRY and CH MODERN D, believing they will benefit more from the rebound in net profit, and assigns both an "Outperform" rating. YILI is viewed as a stable investment target and is also given an "Outperform" rating
[Economic Information Network Exclusive Report on the 30th] A research report by CLSA points out that the turning point in mainland China's raw milk prices, the recapture of market share by leading companies in the liquid milk sector, and growth drivers beyond ambient liquid milk are the hottest topics among investors. Meanwhile, the firm notes that companies in both upstream and downstream sectors are optimistic about the moderate recovery of raw milk prices over the next two to three years, as well as the potential of the deep-processed dairy products business. YILI (SH: 600887) and MENGNIU DAIRY (02319) have both expressed confidence in accelerating the increase of their liquid milk market share by 2027.
The report mentions that YILI's management expects liquid milk growth in the second half of this year to accelerate compared to the first half, and anticipates a mid-to-high single-digit compound annual growth rate (CAGR) in overall sales volume over the next five years. MENGNIU DAIRY's management also expects raw milk prices to trend upward next year. As the upcycle for raw milk prices begins, the company's market share in liquid milk is expected to increase next year. As for CH MODERN D (01117), management believes that raw milk prices will rise by a low-to-mid single-digit percentage annually from 2026 to 2028.
Regarding stocks, the firm states a preference for MENGNIU DAIRY and CH MODERN D, expecting both to benefit more from the rebound in net profit during the upcycle in fresh milk prices. As for YILI, the firm views it as a stable investment target. (hp)
The table below lists the target prices and ratings for the aforementioned stocks:
| Stock | Target Price | Rating |
|---|---|---|
| MENGNIU DAIRY (02319) | HK$22.9 | High Conviction Outperform |
| CH MODERN D (01117) | HK$2 | Outperform |
| YILI (SH: 600887) | RMB35 | Outperform |
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