[ET Net News Agency, 8 July 2020] Citi Research lifted its target price for China
Mengniu Dairy (02319) to HK$41.27 from HK$39.05 and maintained its "buy" rating.
The research house cited its recent checks expecting Mengniu's organic business sales
growth (excluding Junlebao & Bellamy) to further accelerate in June from double-digit
growth in April-May, given better-than-expected growth of high-margin premium products
(especially Milk Deluxe) & sustained strong sales via new channels (including group sales
to community purchase, home delivery of supermarkets & B2B e-commerce [eg. Alibaba LST]).
Mengniu has well managed-down market's expectation on 1H results by issuing a technical
profit warning on 9 June. Given its likely better June operation performance, Citi expects
its 1H net profit decline to fall into the low-end of its indicated range in the profit
warning. (KL)