China Mengniu Dairy 2319

[winston]

Not vested

DJ MARKET TALK: DBS Vickers Ups China Mengniu Target To HK$25.30

1222 [Dow Jones] STOCK CALL: DBS Vickers raises China Mengniu's (2319.HK) target to HK$25.30 from HK$24.90, after slightly adjusting its earnings forecast by 1%-2% to reflect expenses of recent share option issues (estimates CNY35 million over 5 years) and the Junlebao deal.

The house says, immediate contribution from the recently acquired Junlebao is insignificant, but the deal could enhance the company's product mix and strengthen its leading position in the high-growth yogurt market, with market share at over 30% against 21%-22% of closest peer.

Keeps a Buy rating, citing the company's strong net cash of over HK$5 billion and potential M&A opportunities, as the industry will likely further consolidate amid challenging cost environment. The stock is down 1.4% at HK$21.20.

Source: Dow Jones Newswire

[eauyong]

Mengniu (02319) year net up 11% to Rmb1.24bn; div Rmb0.16

<ET Net News Agency, 1 April 2011>

China Mengniu Dairy (02319) said its net profit rose 10.9% to Rmb1.24 billion for the year ended 31 December 2010.

Its basic and diluted earnings per share were Rmb71.2 cents and Rmb71.1 cents.

The revenue was Rmb30.27 billion, an increase of 17.7%; with a profit from operating activities of Rmb1.45 billion.

The final dividend will be Rmb16 cents (2009: Rmb14.13 cents) per share, payable on or about 20 June 2011. (HL)

[winston]

Not vested

Down 7%. Another food scare ?

PE 27. Not cheap ...

[winston]

Not vested

DJ MARKET TALK: Mengniu Down 1.2%; Founder Resigns As Chairman

1107 [Dow Jones] Mengniu Dairy (2319.HK) is down 1.2% at HK$24.70, mostly in line with the HSI's 0.7% decline, shrugging off news Niu Gensheng resigned as chairman.

Niu is the founder of China's largest milk producer, but likely had a diminished role following the takeover of Mengniu in 2009 by the stated-owned COFCO, after the melamine scandal. Mengniu says it has appointed nonexecutive director Ning Gaoning as chairman, effective immediately, while Niu remain as nonexecutive director and will continue to be involved in strategic planning of the company.

According to Thomson Reuters consensus, Mengniu is tipped to earn CNY1.63 billion this year, then CNY2.04 billion in FY12, valuing the stock at 22X/19X forward P/Es, not expensive vs other Chinese consumer staples.

Volume is light at HK$17.5 million.

Source: Dow Jones Newswire

[winston]

Not vested

China Mengniu Diary (2319) saw its first-half net profit jump 27.6 percent to 789.8 million yuan (HK$963.5 million), or 45.4 fen per share, on robust sales growth from a year back.

Revenue rose 28.7 percent year on year to 18.6 billion yuan for the six months ended June 30 with sales volume rising by 18-20 percent .

Shares of the mainland's top dairy firm rose 4.9 percent to HK$26.60 yesterday on the strong earnings, outperforming a 1.7 percent gain in the Hang Seng Index.

Gross profit margin stood at 26 percent despite the rising cost of raw milk and other materials.

"We might raise retail prices if the cost continues to climb,"said chief financial officer Wu Jingshui.

Source: The Standard HK

[winston]

Not vested

DJ MARKET TALK: Mengniu's L/T Growth Story On Track - BarCap

0900 [Dow Jones] STOCK CALL: Barclays Capital raises its Mengniu Dairy (2319.HK) target to HK$31.00 from HK$30.00 and keeps the stock at Overweight.

Its 1H net profit rose 27% on year to CNY790 million, and the house says this was higher than its forecast for 23% growth, primarily led by strong revenue growth, and stable gross and operating margins.

It believes the 3- to 5-year story of margin improvement driven by product mix improvement "is very much on track," while net cash at about US$1 billion "should mean leeway for more acquisitions."

The key risk to its thesis is a surge in raw milk prices and any product safety concerns or incidents, the house adds. The stock ends up 4.9% at HK$26.60 Tuesday post-results.


Source: Dow Jones Newswire

[winston]

not vested. PE 24. Forward PE 21.

BUY China Mengniu (2319 HK).

Management expects the rise in raw milk prices to moderate from 6-7% in 1H11 to 3-5% for FY11 and 2-3% for FY12.

With increased upstream investments over the past two years, raw milk demand and supply can reach a balance in the future. A better price mix and rising ASP could raise gross margin in 2012.

In 1H11, China Mengniu’s ASP increased 9-10% yoy, including a 3-4% direct price increase and the rest from product mix upgrade.

High-end products with more than 28% gross margin accounted for 24-27% of total sales in 1H11 (22-24% in 1H10).

China Mengniu is trading at 16.3x FY12F PE, slightly higher than Hong Kong-listed F&B peers’ 15.4x. We believe it deserves to trade at a premium to its peers due to steady growth, large market share and improving margins.

Source: UOBKH

[winston]

Toxin found in Chinese milk

China has discovered excessive levels of a cancer-causing toxin in milk produced by one of the nation's leading dairy companies, the firm said, in the latest in a series of food safety alarms.

The government's quality watchdog found high levels of an aflatoxin, which is caused by mould, in milk produced by the Mengniu Dairy Group, the company said in a statement issued Sunday.

Mengniu said the milk, produced at one of its plants in the southwestern province of Sichuan, was tested before being sold, so the contaminated milk never reached the market.

China is trying to crack down on product safety violations to reassure citizens and restore faith in the government after a series of high-profile scandals.

Milk was at the centre of China's biggest food safety scandal in 2008, when the industrial chemical melamine was found to have been illegally added to dairy products, to give the appearance of higher protein content.

At least six babies died and another 300,000 became ill after drinking milk tainted with melamine.

Product safety problems have been found in goods ranging from pharmaceuticals to cooking oil. In September, the government arrested 32 people over the sale of cooking oil made from leftovers taken from gutters.

Aflatoxins can be found in milk after cows consume feed contaminated by mould and can increase the risk of cancer, including liver cancer, according to the World Health Organisation.

Mengniu said the products had been destroyed, and apologised to consumers.

The General Administration of Quality Supervision, Inspection and Quarantine made the latest discovery in nationwide testing of 200 dairy products made by 128 companies, the agency said separately.

http://sg.news.yahoo.com/toxin-found-ch ... 20730.html

[winston]

not vested

DJ MARKET TALK: Mengniu Dairy Down 20.5%;Woes Different From 2008's

1053 [Dow Jones] There're two major differences between the latest tainted-milk incident and that occurred in 2008:

First, the current incident is confined to Mengniu Dairy (2319.HK) vs an industry-wide contamination in 2008;

Second, the latest contamination was being blamed on spoiled cow feed, rather than the devastating 2008 scandal when producers added the industrial chemical melamine to milk.

Hence, while Mengniu shares was mauled, falling 20.5% to HK$20.90 Monday morning, it's perhaps unrealistic to expect a share-price meltdown which resembles that of 2008's, when Mengniu shares plunged from around HK$25 to HK$6.

Mengniu is the most heavily-traded Hong Kong stock with HK$731.2 million.

Source: Dow Jones Newswire

[winston]

DJ Mengniu Shares Open Down 24% At 8-Month Low After Carcinogen Scare

HONG KONG (Dow Jones)--Shares of China Mengniu Dairy Co. (2319.HK) opened down 24% Wednesday to their lowest-traded level since April, reflecting significant investor concern over the quality of the company's products following discovery of elevated levels of a cancer-causing substance in a batch of product.

At 0202 GMT the Hong Kong-listed company was down 19.6% at HK$21.15--recovering slightly from its opening trade of HK$19.96, which is its lowest since it hit an intraday low of HK$19.94 on April 1.

The Hong Kong-listed company said over the weekend it destroyed product found to be contaminated with carcinogens. It blamed this on spoiled cow feed. It is the latest scare for China's scandal-hit dairy industry. The markets in Hong Kong were closed Monday and Tuesday for the Christmas holidays.

Mengniu and government regulators said none of the affected product reached stores but the contamination poses a risk for the company as it seeks to regain consumer trust.

In 2008, Mengniu was among producers found to be at fault in a scandal that involved the industrial chemical melamine being added to products and causing the deaths of six infants and illnesses in 300,000 others.

Government testers found traces of toxic melamine in nearly 10% of milk samples tested from Mengniu and rival Inner Mongolia Yili Industrial Group Co. In the aftermath of the 2008 scandal, Mengniu's shares plunged to HK$6 a share from HK$25.

"We believe some consumers could give up drinking milk or switch to other brands in the future, which will affect Mengniu's sales," said brokerage UOB KayHian in a research note.

It added Mengniu's stock is trading at 19 times forecast 2012 earnings--higher than the average of its food and beverage peers of around 12.5 times.

UOB noted it previously believed Mengniu should trade at a big premium to its peers because of its leading position, high earnings growth and good fundamentals. But, it now thinks this premium perhaps isn't warranted anymore partly because of fundamental changes and low organic growth in the dairy industry.

The Inner Mongolia-based dairy producer said in a statement Sunday it destroyed product containing the toxin, a naturally occurring chemical that is considered to be cancer-causing at high levels and with chronic exposure.

It apologized to consumers after government safety inspectors found the contamination at a plant in China's southwestern Sichuan province.

Source: Dow Jones Newswires