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Mengniu Dairy 2018 Profit Surges, Lifted by Strong Sales

28 March 2019

HONG KONG - China Mengniu Dairy, the mainland’s second largest dairy producer, reported a 49 percent rise in 2018 net profit, bolstered by rising sales and the introduction of premium products.

Net profit was up 48.6 percent to a record 3.04 billion yuan (US$452 million) for the year ended 31 December, while revenue jumped 14.7 percent to 68.98 billion yuan.

The company declared a final dividend of 0.181 yuan per share, up 50.8 percent year on year.

Shares in Mengniu jumped 5.5 percent to close at HK$27.95 in Hong Kong on Thursday, following the year-end results' announcement on Wednesday night.

Analysts said Mengniu was facing stiff competition from rival dairy producer Yili Group.

"We expect escalated rivalry in the dairy market in 2019 to 2020. According to the management, Yili added 2.9 percentage point of market share in liquid milk in January to February this year, extending its leading position over Mengniu," said Summer Wang, an equity analyst at Jefferies.

Mengniu is expected to achieve 77 billion yuan in sales this year, in comparison with Yili’s 90 billion yuan target, according to Jefferies.

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Source: South China Morning Post

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