研究报告全文：21Feb2023CMBInternationalGlobalMarketsEquityResearchCompanyupdateMengniuDairy2319HKAlaggardplaytothisearly-stagedconsumption-BUYMaintainledrecoveryTargetPriceHK520PreviousTPHK505OurviewtodairysegmentsoutlookremainsmediocreaswebelieveplayersUpDownside409shouldingeneralsharelesssensitivitytothereopeningthemerelativetotheirCurrentPriceHK369peersinthebeerandcosmeticssegmentrespectivelyThatsaidweseetradingChinaConsumeropportunityonMengniuintoresultsseasonThiswouldmainlybeunderpinnedFoodandBeverageby1aneasyandstabilizingearningsexpectationforboth2H22and2023Ewhenweseesubdueddownsiderisktocurrentconsensusestimatesand2aJosephWongmoderatelylaggingvaluationtopeerswhohavealreadybeenre-ratedon85239000838reopeningsentimentOurcalldoesnotindicateanypreferencechangesinourjosephwongcmbicomhkstructuralpicksInsteadwearguethestockcouldplayneartermcatch-upcatalyzedbythisexpectationmismatchwhenalikelyinline2HcouldrefreshStockDatamarketexpectationdespiteanyearningsmisslastyearwhichlookstobenotMktCapHKmn144168Avg3mthstoHKmn36057uncommonasweobservedWearebuy-ratedonMengniuandinthelongterm52wHighLowHK507247westicktoCRBeer291HKBuyProya603605CHBuyandCTGDFTotalIssuedSharesmn3955601888CHBuyasourpreferredqualityplaysaroundthisearly-stagedSourceWindconsumption-ledrecoveryShareholdingStructureCOFCODairyInvestmentCo13922H22previewWeforecastrevenuetogrowat67YoYordown55GendarLtd749HoHGivenaHSDgrowthfor3Qthisimpliesthatof4QwouldonlybeaBrownBrothersHarriCo729LSDonewhenNovembersaleswashardlyhitbylockdownsMeanwhileweSourceWindexpectrecurringdragssuchasadowngradingmixandrisingrawmaterialSharePerformancecoststocontinuetoweighonGPMThisshouldputthenumbertodeclineAbsoluteRelativeYoYandHoHto348onourestimatesOnapositivenotewedonot1-mth-2838envisageanyone-offinventoryclearancecosttolingerabout10pperosion3-mth113-276-mth9550to1H22GPMandthisshouldsetstageforanearningsrecoveryoverSourceWind1H23ESeparatelywelookforaYoYflatrecurringEBITmarginsex-educationalsurchargeat67forFY22Eandthisimpliesthatof2Htobe12-mPricePerformance71expandingby11ppYoYand08ppHoHrespectivelyHKD6002319HKHSCEIrebasedEarningschangeWecutour2Hrevenueby24mainlytoreflectaweak500400Novemberin2022Wealsolowerour2HGPby32tofactor-intheabove300Theseexplaina29cutinnetprofitsExtrapolationoftheseassumptions200hasledtoanaverage35and49cutinour202324Erevenuenetprofits10000respectivelyOurestimatesarenowlargelyinlinewithconsensusFeb-22May-22Aug-22Nov-22ValuationUponourearningschangeournewTPisbasedonanSourceBBGunchanged260xbutrolled-forwardend-23EPEwhichrepresentsitslongAuditorKPMGtermaverageRelatedReports1KweichowMoutai600519CHEarningsSummaryProxyofChinasconsumption-YE31DecFY20AFY21AFY22EFY23EFY24Eledrecovery6Feb2023RevenueRMBmn7603588141928021023931140482CRBeer291HKAnotherYoYgrowth3815953103114positiveyearfor2023ourNetincomeRMBmn35255026589867717938preferredpickforChinasre-EPSRMB0913151720opening22Jan2023YoYgrowth76420173148172ConsensusEPSRMBnana1518213ChinaFeihe6186HKcouldremainabetaplaywhenbirthratePExnana207180154onlystartinflectingpost3Q3PBxnana292623Jan2023Divyieldnana151720ROE95120126130137Netgearing19428220986NetcashSourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk21Feb2023Figure1EarningsrevisionNewOldDiffRMBmnFY22EFY23EFY24EFY22EFY23EFY24EFY22EFY23EFY24ERevenue9280210239311404895060105988118303-24-34-36GrossProfit331303706641856342223889844009-32-47-49RecurringEBIT620574608880639479059705-30-56-85Netprofit589867717938607571208342-29-49-48EPSRMB149171200153179210-29-47-47GrossMargin357362367360367372-03ppt-05ppt-05pptEBITMargin67737867758200ppt-02ppt-04pptNetMargin64667064677100ppt-01ppt-01pptSourceCompanydataCMBIGMestimatesFigure2CMBIGMestimatesvsconsensusCMBIGMConsensusDiffRMBmnFY22EFY23EFY24EFY22EFY23EFY24EFY22EFY23EFY24ERevenue9280210239311404893531106576116048-08-39-17GrossProfit331303706641856341353925842906-29-56-24RecurringEBIT620574608880639076549105-29-25-25Netprofit589867717938582666127815122416EPSRMB149171200147167197112215GrossMargin357362367365368370-08ppt-06ppt-03pptEBITMargin677378687278-01ppt01ppt-01pptNetMargin64667062626701ppt04ppt02pptSourceCompanydataCMBIGMestimatesFigure312MforwardPEbandFigure412MtrailingPBbandx1-yrfwdPELTaverage-2SDx1-yrtrailingPBLTaverage38-1SD1SD2SD-1SD1SD802SD-2SD3328602340181320Jun22JunJun18Jun19Jun20Jun21JunMar18MarMar19Mar20Mar21Mar22MarSep20Sep21DecSep18Sep18Dec19Sep19Dec20Dec21Sep22Sep22DecJun20JunJun18Jun19Jun21Jun22JunMar19Mar22MarMar18Mar20Mar21MarDec18Dec19Sep19Dec20Sep20Dec21Sep21Dec22Sep22Dec18SepSourceCompanydataBloombergCMBIGMestimatesSourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE21Feb2023FinancialSummaryIncomestatementCashflowsummaryYE31DecRMBmnFY20AFY21AFY22EFY23EFY24EYE31DecRMBmnFY20AFY21AFY22EFY23EFY24ERevenue760358814192802102393114048Netincome35255026589867717938LiquidMilk6775176514800848848399184DA20422396265227522852Others828411627127181391014865Changeinworkingcapital96714593519546663Others11871336113915271562Grossprofits2862932390331303706641856Netcashfroperatingact53487545389274518565DA20422396265227522852Capexinvestments611565640640640Sellingexpense2154123488236652600828968Acquisition26830---Administrationexpenses29153524380541984676Others545914045657421421Otheroperatingexpenses17831629160010001000Netcashfrinvestingact48221544017219219Others30293780505243524452EBIT33775132646174608811Equityraised-----ChangeofDebts39268013---EBITDA5419752991131021311664Dividendpaid8851282163718982204Others24142---Financecostsnet572743743743743Netcashfrfinancingact45716773163718982204Non-operating13501479147715431614Preincomeexpense-taxprofit41555868719582609683Netchangeincash55991123227253346142Cashatthebeginningoftheyear597012351109811325318587Incometax653905110912731493Exchangedifference17211---LessMinorityinterests2362188216253Cashattheendoftheyear1139711217132531858724729Netprofit35255026589867717938Lesspledgedcash-----BalancesheetKeyratiosYE31DecRMBmnFY20AFY21AFY22EFY23EFY24EYE31DecFY20AFY21AFY22EFY23EFY24ENon-currentassets4864067081663256553464715SalesmixPPEFixedassets1254717335158001422412607LiquidMilk891868863864870Goodwill48834858485848584858Others109132137136130Deferredtaxassets12771561156115611561Othernon-currentassets2993343327441054489045689PLratiosGrossmargin377367357362367Currentassets3150731020336574009447576Operatingmargin4458707377Cash1139711217132531858724729Pre-taxmargin5567788185Accountreceivable29274160438048325382Netmargin4657646670Inventory55126485686675178307Effectivetaxrate157154154154154Othercurrentassets116709158915891589158BalancesheetanalysisCurrentliabilities2614429072261542671127389Currentratiox0404040505Borrowings49244265426542654265Netreceivabledays141172172172172Accountpayables79698804588564437120Inventoryturnoverdays424425420420420Otherpayables832611737117371173711737Netpayabledays383365360360360Leaseliabilities49244265426542654265Netdebttoequity19428220986NetcashNon-currentliabilities1675427030270302703027030ReturnsBorrowings1369618786187861878618786ROE95120126130137Deferredtaxliabilities22802456245624562456DividendyieldNANA151720Othernon-currentliabilities7795787578757875787PershareMinorityInterest42655174536255775830EPSRMB0913151720DPSRMB0304040506Totalnetassets3724841999467985188657873BVPSRMB8393104117131Shareholdersequity3298336826414374630952043EVEBITDANANA145124103SourceCompanydataCMBISestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE321Feb2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBIGMwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBIGMGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBIGMGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBIGMGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBIGMGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE4