Mengniu 2013 Profit Beats Estimates on Milk Beverage Demand
--> +ve for Danone
Mengniu 2013 Profit Beats Estimates on Milk Beverage Demand (1)
2014-03-26 01:49:41.267 GMT
(Updates with share surge in first paragraph.)
By Bloomberg News
March 26 (Bloomberg) -- China Mengniu Dairy Co., the
country’s largest dairy producer, posted profit that beat
analyst estimates last year as Chinese demand rose for liquid
milk and milk beverages. The stock surged the most in 10 months.
Net income climbed 25 percent to 1.63 billion yuan ($263
million) and sales increased 20 percent to 43.4 billion yuan,
the Hohhot, Inner Mongolia-based company said in a filing today.
Analysts projected profit of 1.5 billion yuan, according to the
average of 13 estimates compiled by Bloomberg.
Mengniu is winning back customers through increased foreign
partnerships such as with France’s Danone, after scandals
including melamine-tainted milk from the company led buyers to
shun Chinese food products. The company moved to strengthen its
supply chain and products through stake purchases in raw-milk
producer China Modern Dairy Holdings Ltd. and baby-milk maker
Yashili International Holdings Ltd. last year amid a government
push to raise food-industry standards.
“Earnings growth at the company this year was boosted by
their acquisitions of Yashili and Modern Dairy,” Charles Yan,
the Greater China consumer analyst at Standard Chartered Bank
(H.K.) Ltd., said before the earnings. “These helped consumer
confidence in Mengniu.”
Yan is one of 11 analysts tracked by Bloomberg who
recommend holding the stock, while 17 analysts suggest buying
and two suggest selling.
Mengniu gained as much as 8.4 percent, headed for the
largest advance since May 20. The stock rose 6.3 percent to
HK$37.80 as of 9:43 a.m. in Hong Kong trading.
Flavored Milk
The company, which sells dairy products including yogurt
and flavored milk under its namesake brand in China, said sales
of milk beverages jumped 30 percent to 10.4 billion yuan, and
rose 18 percent for yogurt. Mengniu will focus on developing
those two markets while the market matures for liquid milk,
sales of which rose 17 percent to 38 billion yuan, it said.
Mengniu has the biggest share in China’s drinking-milk
market, with about 34 percent in 2012, according to industry
analyst Euromonitor International.
In a separate statement, the company said four directors
have resigned to cut the size of the board, allowing more
efficiency in decision-making.
Food and drug safety was voted the third-biggest concern
for ordinary Chinese this year, up from seventh place in 2013,
according to an annual online poll of 3.26 million people by the
state-run People’s Daily in February.
Food Safety
In 2011, Mengniu said moldy cattle feed led to excessive
toxin levels in its milk. Mengniu also was among 22 dairy
companies found in 2008 to have sold milk products containing
melamine, a chemical used to make plastics and dishware, that
killed at least six infants in China.
Since then, Mengniu has entered into pacts to strengthen
control of its supply chain and expand its infant formula
business amid a government consolidation of the industry.
Mengniu agreed to buy about 27 percent of Modern Dairy in
May for HK$3.18 billion ($410 million), giving it preferential
purchase rights to Modern Dairy’s milk supply. A month later,
Mengniu offered to purchase 75 percent of Yashili International
Holdings Ltd. in a deal valued at about HK$12.5 billion.
The company also expanded its product lineup to tap
consumer demand for safer food, starting sales of organic infant
formula and organic milk with Danish partner Arla Foods amba in
the second half of 2013. In January, Mengniu formed a joint
venture with WhiteWave Foods Co., the maker of Silk plant-based
beverages and Horizon organic milk, to produce and sell
nutritious products in China.
Danone Shareholding
Last month, Danone, the world’s biggest yogurt maker,
agreed to pay 486 million euros ($672 million) to more than
double its stake in Mengniu, raising its holding to 9.9 percent.
Danone will help Mengniu expand in chilled products such as as
yogurt and will improve the Chinese company’s quality control
and production efficiency, Bessie Wu, Mengniu’s chief financial
officer, said Feb. 12.
China is seeking to create as many as five large domestic
infant-formula companies under a government plan to raise food
product standards by 2018, according to the China Securities
Journal in August.
For Related News and Information:
Danone Raises Mengniu Stake Amid China Food Safety Concerns
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Chinese Pay Double for Organic Kale After Food Scandals: Retail
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China Mengniu Offers $1.6 Billion to Buy Carlyle-Backed Yashili
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Bloomberg’s top consumer stories: RTOP <GO>
Mengniu income statement chart: 2319 HK <EQUITY> FA ISBAR <GO>
To contact Bloomberg News staff for this story:
Liza Lin in Shanghai at +86-21-6104-3047 or
llin15@bloomberg.net
To contact the editors responsible for this story:
Stephanie Wong at +852-2977-6036 or
swong139@bloomberg.net
Lena Lee
2014-03-26 01:49:41.267 GMT
(Updates with share surge in first paragraph.)
By Bloomberg News
March 26 (Bloomberg) -- China Mengniu Dairy Co., the
country’s largest dairy producer, posted profit that beat
analyst estimates last year as Chinese demand rose for liquid
milk and milk beverages. The stock surged the most in 10 months.
Net income climbed 25 percent to 1.63 billion yuan ($263
million) and sales increased 20 percent to 43.4 billion yuan,
the Hohhot, Inner Mongolia-based company said in a filing today.
Analysts projected profit of 1.5 billion yuan, according to the
average of 13 estimates compiled by Bloomberg.
Mengniu is winning back customers through increased foreign
partnerships such as with France’s Danone, after scandals
including melamine-tainted milk from the company led buyers to
shun Chinese food products. The company moved to strengthen its
supply chain and products through stake purchases in raw-milk
producer China Modern Dairy Holdings Ltd. and baby-milk maker
Yashili International Holdings Ltd. last year amid a government
push to raise food-industry standards.
“Earnings growth at the company this year was boosted by
their acquisitions of Yashili and Modern Dairy,” Charles Yan,
the Greater China consumer analyst at Standard Chartered Bank
(H.K.) Ltd., said before the earnings. “These helped consumer
confidence in Mengniu.”
Yan is one of 11 analysts tracked by Bloomberg who
recommend holding the stock, while 17 analysts suggest buying
and two suggest selling.
Mengniu gained as much as 8.4 percent, headed for the
largest advance since May 20. The stock rose 6.3 percent to
HK$37.80 as of 9:43 a.m. in Hong Kong trading.
Flavored Milk
The company, which sells dairy products including yogurt
and flavored milk under its namesake brand in China, said sales
of milk beverages jumped 30 percent to 10.4 billion yuan, and
rose 18 percent for yogurt. Mengniu will focus on developing
those two markets while the market matures for liquid milk,
sales of which rose 17 percent to 38 billion yuan, it said.
Mengniu has the biggest share in China’s drinking-milk
market, with about 34 percent in 2012, according to industry
analyst Euromonitor International.
In a separate statement, the company said four directors
have resigned to cut the size of the board, allowing more
efficiency in decision-making.
Food and drug safety was voted the third-biggest concern
for ordinary Chinese this year, up from seventh place in 2013,
according to an annual online poll of 3.26 million people by the
state-run People’s Daily in February.
Food Safety
In 2011, Mengniu said moldy cattle feed led to excessive
toxin levels in its milk. Mengniu also was among 22 dairy
companies found in 2008 to have sold milk products containing
melamine, a chemical used to make plastics and dishware, that
killed at least six infants in China.
Since then, Mengniu has entered into pacts to strengthen
control of its supply chain and expand its infant formula
business amid a government consolidation of the industry.
Mengniu agreed to buy about 27 percent of Modern Dairy in
May for HK$3.18 billion ($410 million), giving it preferential
purchase rights to Modern Dairy’s milk supply. A month later,
Mengniu offered to purchase 75 percent of Yashili International
Holdings Ltd. in a deal valued at about HK$12.5 billion.
The company also expanded its product lineup to tap
consumer demand for safer food, starting sales of organic infant
formula and organic milk with Danish partner Arla Foods amba in
the second half of 2013. In January, Mengniu formed a joint
venture with WhiteWave Foods Co., the maker of Silk plant-based
beverages and Horizon organic milk, to produce and sell
nutritious products in China.
Danone Shareholding
Last month, Danone, the world’s biggest yogurt maker,
agreed to pay 486 million euros ($672 million) to more than
double its stake in Mengniu, raising its holding to 9.9 percent.
Danone will help Mengniu expand in chilled products such as as
yogurt and will improve the Chinese company’s quality control
and production efficiency, Bessie Wu, Mengniu’s chief financial
officer, said Feb. 12.
China is seeking to create as many as five large domestic
infant-formula companies under a government plan to raise food
product standards by 2018, according to the China Securities
Journal in August.
For Related News and Information:
Danone Raises Mengniu Stake Amid China Food Safety Concerns
{NSN N0VLXA6KLVR4 <GO>
Chinese Pay Double for Organic Kale After Food Scandals: Retail
NSN N2E76M6TTDSA <GO>
China Mengniu Offers $1.6 Billion to Buy Carlyle-Backed Yashili
NSN MOL7K26TTDU1 <GO>
Bloomberg’s top consumer stories: RTOP <GO>
Mengniu income statement chart: 2319 HK <EQUITY> FA ISBAR <GO>
To contact Bloomberg News staff for this story:
Liza Lin in Shanghai at +86-21-6104-3047 or
llin15@bloomberg.net
To contact the editors responsible for this story:
Stephanie Wong at +852-2977-6036 or
swong139@bloomberg.net
Lena Lee