TC

18/09/2019 15:09

{I-bank focus}Mengniu Dairy's (02319) buy of Bellamy pricey

[ET Net News Agency, 18 September 2019] CCB International said China Mengniu Dairy's
(02319) acquisition of Bellamy was pricey and regulatory and execution uncertainty remains
a concern.
Mengniu has earlier announced a plan to acquire Bellamy, a leading Australian IMF brand,
for a total consideration of AUD1.46bn or HK$7.86bn, which translates to around 34x/66x
FY2018/FY2019 (year to P/E on reported net profit or 31x/49x on an adjusted basis
according to Bellamy' s annual filings.
CCBI said the acquisition will bring Mengniu one short step closer to its revenue goal
of RMB100bn by 2020, albeit at a relatively expensive price as Ausnutria (01717), H&H
(01112) and other IMF brands with more meaningful shares of the market are trading at mid-
to low-teen FY2020 P/Es.
It maintained its "outperform" rating on Mengniu, with an unchanged target price of
HK$34.4. (KL)

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