China Mengniu Dairy Co., Ltd.

Company Background

China Mengniu Dairy is a Chinese manufacturer and distributor of dairy products, including raw milk, yogurt, milk beverages, ice cream and milk powder. The state-owned company held the largest share of the domestic milk market until 2014. Mengniu Dairy became the first dairy products maker to be included on the Hang Seng Index in 2014.

In August 1999, Mengniu Dairy was established as a private company in Hohhot, the Inner Mongolia Autonomous Region. In 2009, however, China National Cereals, Oils and Foodstuffs (COFCO), China's largest state-owned agricultural conglomerate, acquired a stake in the company, becoming its biggest shareholder. It listed on the Hong Kong Stock Exchanges and Clearing (HKEX) in June 2004. It has more than 50 plants in over 20 provinces in China, with an annual production capacity of more than 8.1 million tons.

The company has formed strategic alliances with makers of dairy products in Denmark, France, the U.S. and New Zealand. In 2008, it was revealed that milk powder manufactured by Chinese dairy company Sanlu Group was contaminated with the toxic chemical melamine. Mengniu Dairy's milk powder was also found to be tainted with the substance, shaking the Chinese public's sense of safety regarding domestic milk powder.

It plans to expand its business overseas. In April, the company announced its strategic alliance with Shanghai Disney Resort, scheduled to open in the spring of 2016. It aims to increase its name recognition among overseas visitors by selling its own-brand milk and ice cream, along with other products, at the theme park.

Business Summary

China Mengniu Dairy Co., Ltd. is an investment holding company, which engages in the manufacture and distribution of dairy products. It operates through the following segments: Liquid Milk Products, Ice Cream Products, Milk Powder Products, and Others. The Liquid Milk Products segment produces and distributes ultra-high temperature milk, milk beverages, and yogurt. The Ice Cream Products segment offers its products under the Deluxe, Mood for Green, Ice+, and Suibian brands. The Milk Powder Products segment includes infant milk formula brand products such as Milex, Meimengyi, Ruipuen Oushi Series, Yashily Super a-Golden, Yashili Golden Ambery, Arla Merla, Arla Baby & Me, and Dumex Series. The Others segment comprises of cheese products, plant-based nutrition product, and trading business. The company was founded on February 16, 2004 and is headquartered in Hong Kong.

Financial Highlights

Dec 2021	HKD	USD
Revenue	106,229.07M	13,666.70M
Gross Profit	39,036.67M	5,022.19M
Operating income	5,386.96M	693.05M
Income before tax	6,236.76M	802.37M
Net income	6,056.83M	779.23M
EBITDA	8,269.67M	1,063.92M
Diluted EPS	1.52	0.19
Dividends Per Share	0.44	0.05
Total Assets	120,004.00M	15,392.43M
Total liabilities	68,043.02M	8,727.60M
Total equity	45,047.71M	5,778.08M
Operating cash flow	10,695.94M	1,376.06M
	Currency in HKD	Currency in USD

Historical Data

HKD | USD

	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021
Revenue	69,364.65M	81,700.15M	89,613.25M	85,439.84M	106,229.07M
Gross Profit	24,451.87M	30,531.94M	33,653.06M	32,175.66M	39,036.67M
Operating income	3,725.90M	4,048.38M	4,589.75M	3,633.92M	5,386.96M
Income before tax	3,026.80M	4,563.37M	6,157.60M	4,190.00M	6,236.76M
Net income	2,361.33M	3,604.32M	4,655.22M	3,961.06M	6,056.83M
EBITDA	5,659.47M	6,187.12M	7,147.72M	6,030.74M	8,269.67M
Diluted EPS	0.60	0.92	1.18	1.00	1.52
Dividends Per Share	0.14	0.20	0.19	0.32	0.44
Total Assets	69,792.36M	75,785.00M	87,851.58M	95,024.60M	120,004.00M
Total liabilities	36,364.06M	40,068.56M	50,236.76M	50,364.42M	68,043.02M
Total equity	27,135.19M	28,751.09M	32,587.23M	39,105.54M	45,047.71M
Operating cash flow	7,354.52M	8,725.91M	8,361.06M	7,322.72M	10,695.94M

	Dec 2017	Dec 2018	Dec 2019	Dec 2020	Dec 2021
Revenue	8,901.10M	10,424.20M	11,437.26M	11,015.97M	13,666.70M
Gross Profit	3,137.74M	3,895.60M	4,295.11M	4,148.48M	5,022.19M
Operating income	478.12M	516.53M	585.78M	468.53M	693.05M
Income before tax	388.41M	582.24M	785.88M	540.22M	802.37M
Net income	303.01M	459.87M	594.14M	510.71M	779.23M
EBITDA	726.24M	789.42M	912.25M	777.55M	1,063.92M
Diluted EPS	0.07	0.11	0.15	0.12	0.19
Dividends Per Share	0.01	0.02	0.02	0.04	0.05
Total Assets	8,927.93M	9,679.60M	11,274.87M	12,255.15M	15,392.43M
Total liabilities	4,651.74M	5,117.73M	6,447.38M	6,495.40M	8,727.60M
Total equity	3,471.17M	3,672.22M	4,182.24M	5,043.37M	5,778.08M
Operating cash flow	943.75M	1,113.34M	1,067.11M	944.13M	1,376.06M

Valuation Measures

Dec 2021
PER	28.78
ROA	5.63%
ROE	14.39%
Operating margin	5.07%
Profit margin	5.70%

Key executives

Chief Executive Officer & Executive Director: Min Fang Lu
Chief Financial Officer, Executive Director & VP: Ping Zhang
Vice President, Head-Research & Development: Lu Dai
Vice President: Jie Jun Zhao
Vice President & Head-Human Resources: Lijun Liu

Shareholders

China State-Owned Assets Supervision & Admn Commission (24.0%)
First Sentier Investors (Hong Kong) Ltd. (3.9%)
FIL Investments International (3.5%)
The Vanguard Group, Inc. (2.4%)
FIL Investment Management (Singapore) Ltd. (2.1%)
BlackRock Fund Advisors (1.7%)
FIL Investment Management (Hong Kong) Ltd. (1.5%)
First Sentier Investors (UK) IM Ltd. (1.5%)
FIL Investment Advisors (UK) Ltd. (1.5%)
Schroder Investment Management (Hong Kong) Ltd. (1.4%)

Contact Details

Website:http://www.mengniuir.com
Address: 32/F, COFCO Tower, 262 Gloucester Road, Hong Kong, Hong Kong
Phone: +852.2180.9050

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Competitors

Xinjiang Western Animal Husbandry Co., Ltd. Class A
China Modern Dairy Holdings Ltd.

Last Updated on 20 Mar, 2023