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.
etnet榮獲HKEX Awards 2023 「最佳表現證券數據供應商」大獎► 了解詳情
