[ET Net News Agency, 28 August 2020] Credit Suisse raised its target price for China
Mengniu Dairy (02319) to HK$44 from HK$40 and maintained its "outperform" rating.
The research house turned more constructive on Mengniu post its 1H results, given the
solid premiumisation trend in liquid milk segment and improving competitive dynamics into
2H 2020 and 2021.
Credit Suisse cited management conveying strong confidence on consistently achieving
30-50bps OPM improvement target per annum in the mid-term, underpinned by (1) product mix
upgrade on accelerating Deluxe's growth; (2) S&D expense savings on the back of RTM (Route
to Market) reform, cost savings from whole value chain, and digitalization-powered
business decision making.
Credit Suisse lifted its 2020/21/22 EPS forecasts by 2-6% to factor in better demand and
margin outlook. (KL)