Investment Rating - The investment rating for the company is "Outperform the Market" [1] Core Views - The report highlights that the company achieved a main operating revenue of 44.671 billion yuan in H1 2024, a year-on-year decrease of 12.61%, and a net profit attributable to shareholders of 2.446 billion yuan, down 19.03% year-on-year. The company plans to repurchase up to 2 billion HKD of shares within the next twelve months based on market conditions [3][6] - The report indicates that the dairy product industry is under short-term pressure, but the company is enhancing its operating profit margin, achieving a year-on-year increase of 0.46 percentage points to 7.26% due to a decrease in raw milk prices, despite a decline in gross profit [3][6] - The liquid milk segment showed improved profitability, with revenue of 36.262 billion yuan in H1 2024, a year-on-year decrease of 12.92%, but a profit margin increase of 0.25 percentage points to 6.93% [3][6] - The ice cream segment faced challenges with a revenue of 3.371 billion yuan, down 21.75% year-on-year, and a profit margin decrease of 5.20 percentage points [4] - The infant formula segment reported revenue of 1.635 billion yuan, down 13.67% year-on-year, but achieved a profit margin increase of 8.48 percentage points [6] Summary by Sections Financial Performance - The company reported a main operating revenue of 44.671 billion yuan in H1 2024, down 12.61% year-on-year, and a net profit of 2.446 billion yuan, down 19.03% year-on-year [3][6] - The gross profit margin improved by 1.86 percentage points to 40.26%, despite a gross profit decline of 8.38% [3] - The operating profit margin increased by 0.46 percentage points to 7.26% [3] Business Segments - Liquid Milk: Revenue of 36.262 billion yuan, down 12.92% year-on-year, with a profit margin of 6.93%, up 0.25 percentage points [3] - Ice Cream: Revenue of 3.371 billion yuan, down 21.75% year-on-year, with a profit margin of 11.32%, down 5.20 percentage points [4] - Infant Formula: Revenue of 1.635 billion yuan, down 13.67% year-on-year, with a profit margin of 1.43%, up 8.48 percentage points [6] - Cheese: Revenue of 2.114 billion yuan, down 6.28% year-on-year, with a profit margin of 5.60%, up 2.27 percentage points [6] Future Outlook - The company expects revenues for 2024-2026 to be 91.674 billion yuan, 97.464 billion yuan, and 100.970 billion yuan respectively, with net profits of 4.305 billion yuan, 5.017 billion yuan, and 5.358 billion yuan respectively [6][8] - The report assigns a PE valuation range of 12-15 times for 2024E, corresponding to a per-share value range of 13.08 to 16.35 HKD, with a reasonable value range of 14.37 to 17.97 HKD per share [6][8]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 16.4, indicating a potential upside of 28% from the current stock price [1][2][4]. Core Insights - The dairy industry is under pressure with oversupply leading to a decline in performance, resulting in a revenue drop of 12.6% to HKD 446.7 billion and a net profit decrease of 17.2% to HKD 25.3 billion in the first half of 2024 [1]. - The company has adjusted its net profit forecasts for 2024, 2025, and 2026 to HKD 44.4 billion, HKD 49.4 billion, and HKD 53.3 billion respectively, with corresponding EPS of HKD 1.20, HKD 1.33, and HKD 1.44 [1][2]. Revenue Breakdown - Liquid milk revenue fell by 12.9% to HKD 362.6 billion, while operating profit decreased by 9.5% to HKD 25.5 billion, maintaining a profit margin of 7.2% [1]. - Ice cream revenue dropped by 21.8% to HKD 33.7 billion, with operating profit down 46% to HKD 3.8 billion, resulting in a profit margin of 11.4% [1]. - Cheese revenue decreased by 6.3% to HKD 21.1 billion, but operating profit increased by 56% to HKD 1.2 billion, achieving a profit margin of 5.6% [1]. - Milk powder revenue fell by 13.7% to HKD 16.4 billion, but the business turned profitable for the first time in three years with an operating profit of HKD 0.23 billion [1]. Profitability and Cost Management - The company's operating profit for the first half of 2024 was HKD 31.2 billion, with an operating profit margin of 7%, and a gross margin of 40.3% [1]. - The report highlights the company's efforts in cost control, which led to a slight increase in operating profit margin despite rising sales expenses [1]. Shareholder Returns - The company announced a share buyback plan of up to HKD 2 billion, representing 4% of its total market capitalization, and plans to increase its dividend payout ratio, which was 40% in 2023 [2]. Valuation Analysis - The report employs comparable company analysis and DCF methods for valuation, concluding a target price of HKD 16.4 based on a 2025 forecast PE of 12x and a DCF valuation suggesting a price of HKD 16.8 [8]. Financial Forecasts - The company forecasts a revenue of HKD 90.1 billion for 2024, with a projected net profit of HKD 4.4 billion, reflecting a net profit margin of 4.9% [13]. - The report anticipates a gradual recovery in revenue growth rates in the following years, with expected growth rates of 4.5% for 2025 and 4.5% for 2026 [13].

Investment Rating - The report maintains a "Buy" rating for Mengniu Dairy (2319.HK) [3] Core Views - Mengniu Dairy's H1 2024 revenue decreased by 12.61% year-on-year to CNY 446.71 billion, with net profit down 19.03% to CNY 24.46 billion [2] - The liquid milk segment is undergoing adjustments, while the low-temperature business is experiencing growth [2] - The company is optimistic about H2 2024 performance due to inventory adjustments and declining raw milk prices, which are expected to improve gross margins [2] Summary by Sections Financial Performance - H1 2024 revenue breakdown: liquid milk CNY 362.62 billion (-12.9%), ice cream CNY 33.71 billion (-21.8%), milk powder CNY 16.35 billion (-13.7%), cheese CNY 21.14 billion (-6.3%), other dairy products CNY 12.88 billion (+26.3%) [2] - Gross margin for H1 2024 was 40.26%, up 1.86 percentage points year-on-year, primarily due to lower raw milk prices [2] - Net profit margin for H1 2024 was 5.48%, down 0.43 percentage points year-on-year [2] Profit Forecast and Valuation - Revised net profit forecasts for 2024-2026 are CNY 43.30 billion, CNY 50.91 billion, and CNY 52.92 billion, representing decreases of 21.22%, 16.64%, and 20.19% respectively [2] - Corresponding EPS for 2024-2026 are projected at CNY 1.10, CNY 1.29, and CNY 1.34 [2] - Current P/E ratios for 2024-2026 are 11, 9, and 9 times respectively [2] Market Data - Total shares outstanding: 3.935 billion [4] - Current market capitalization: CNY 508.44 billion [4] - 1-year price range: CNY 11.82 to CNY 28.25 [4]

Investment Rating - The report indicates a positive outlook for the company, highlighting its resilience in a challenging market environment [20]. Core Insights - Despite facing significant challenges in the dairy industry, including oversupply of raw milk and declining consumer demand, the company has managed to improve its core profitability metrics [20]. - The company announced a substantial share buyback plan of up to HKD 2 billion, reflecting its commitment to enhancing shareholder value [19]. Summary by Sections Core Profitability Indicators - In the first half of 2024, the company reported revenue of HKD 446.7 billion, a decrease of 12.6% year-on-year, and a net profit of HKD 2.45 billion, down 19.0% year-on-year [3][4]. - The gross profit reached HKD 179.9 billion, with a gross margin of 40.3%, an increase of 1.9 percentage points year-on-year [4]. Maintaining Business Fundamentals and Focusing on Premiumization - The company has maintained a stable core business, with liquid milk accounting for 81% of total revenue, generating HKD 362.6 billion [6]. - The introduction of premium products, such as the "Desert Organic Milk," has contributed to brand value enhancement and market share growth in the high-end dairy segment [7]. Enhancing Operational Efficiency and Increasing Shareholder Returns - The company has successfully reduced operational costs, with inventory turnover days decreasing to 40.3 days, reflecting improved inventory management [15]. - The cash dividend for 2023 was HKD 2.15 billion, with a dividend payout ratio of 39.9%, up from 29.5% the previous year, indicating a focus on returning value to shareholders [19].

Investment Rating - The report maintains a "Buy" rating for Mengniu Dairy (2319.HK) with a target price of HKD 16.25 [1][3]. Core Views - The company reported a revenue of RMB 447 billion for the first half of 2024, a decrease of 12.6% year-on-year, and an operating profit of RMB 31.2 billion, down 4.8% year-on-year. The decline in revenue is attributed to inventory digestion and controlled shipment pace [2]. - The gross margin improved to 40.3%, up 1.9 percentage points year-on-year, primarily due to lower raw milk prices. The operating profit margin also increased to 7%, up 0.6 percentage points year-on-year [2]. - The company plans to repurchase up to HKD 2 billion of its shares and increase its dividend payout, emphasizing shareholder returns [2]. Summary by Sections Financial Performance - Revenue for the first half of 2024 was RMB 447 billion, a decline of 12.6% year-on-year. The breakdown by product categories shows liquid milk at RMB 362 billion (-12.9%), ice cream at RMB 33.7 billion (-21.8%), milk powder at RMB 16.4 billion (-13.7%), and cheese at RMB 21.1 billion (-6.3%) [2]. - The company achieved a gross margin of 40.3%, an increase of 1.9 percentage points year-on-year, and an operating profit margin of 7%, up 0.6 percentage points year-on-year [2]. Profit Forecast - The forecast for net profit attributable to shareholders for 2024-2026 is RMB 45.0 billion, RMB 50.2 billion, and RMB 55.8 billion, respectively. The corresponding EPS is projected to be RMB 1.14, RMB 1.28, and RMB 1.42, with dynamic PE ratios of 11x, 9x, and 9x [3][4]. Strategic Initiatives - The company is focusing on enhancing its product offerings and expanding its market presence, particularly in the liquid milk and ice cream segments. It aims to leverage online and offline channels and explore new consumption scenarios [8]. - The company is also committed to its FIRST strategy, which aims to drive high-quality development in operations and management [2].

Investment Rating - The investment rating for Mengniu Dairy (2319.HK) is not explicitly stated in the provided documents, but the report indicates a focus on potential recovery and growth in the second half of the year [2]. Core Views - The report highlights that Mengniu Dairy's revenue for the first half of 2024 was RMB 44.671 billion, a decrease of 12.6% year-on-year, with a net profit attributable to shareholders of RMB 2.446 billion, down 19.0% year-on-year [2]. - The report emphasizes that the overall demand in the dairy product industry was below expectations, leading to increased channel inventory and pressure on revenue across various business segments [2]. - Despite the challenges, the report notes operational improvements and a commitment to enhancing shareholder returns, including a share buyback plan of up to HKD 2 billion and an increase in cash dividend payout [2]. Summary by Sections Financial Performance - In H1 2024, revenue from liquid milk, ice cream, milk powder, and cheese was RMB 41.640 billion, RMB 4.309 billion, RMB 1.894 billion, and RMB 2.256 billion, reflecting year-on-year declines of 12.9%, 21.8%, 13.7%, and 6.3% respectively [2]. - The gross margin improved to 40.3%, an increase of 1.99 percentage points year-on-year, primarily due to lower raw milk prices [2]. - The operating profit margin met initial expectations, expanding by 0.6 percentage points to 7.0% [2]. Future Outlook - The report forecasts net profits for Mengniu Dairy to be RMB 4.279 billion, RMB 4.723 billion, and RMB 5.549 billion for 2024, 2025, and 2026 respectively, with corresponding price-to-earnings ratios of 12, 11, and 9 times [3]. - The company is expected to gradually restore revenue and profit growth in the second half of the year as channel inventory returns to reasonable levels [2]. Key Financial Metrics - The projected revenue for 2024 is RMB 91.353 billion, a decrease of 7.37% year-on-year, with a projected net profit margin of 4.68% [4][6]. - The gross margin is expected to stabilize around 39.01% in 2024, with a return on equity (ROE) of 8.83% [4][6]. - The earnings per share (EPS) is projected to be RMB 1.09 for 2024, with a price-to-earnings ratio of 12.21 [4][6].

Investment Rating - The report maintains a "Buy" rating for Mengniu Dairy (2319.HK) with a target price of HKD 16.25 [1][3]. Core Views - The company reported a revenue of RMB 447 billion for the first half of 2024, a decrease of 12.6% year-on-year, and an operating profit of RMB 31.2 billion, down 4.8% year-on-year [2]. - The decline in revenue is attributed to inventory digestion and controlled shipment pace to maintain reasonable inventory levels at the terminal [2]. - The gross margin improved to 40.3%, up 1.9 percentage points year-on-year, primarily due to a decrease in raw milk prices [2]. - The company plans to repurchase up to HKD 2 billion of its shares and increase the dividend payout ratio, emphasizing shareholder interests [2]. Summary by Sections Financial Performance - Revenue for the first half of 2024 was RMB 447 billion, down 12.6% year-on-year, with operating profit at RMB 31.2 billion, a decrease of 4.8% [2]. - The revenue breakdown by product categories shows liquid milk at RMB 362 billion (-12.9%), ice cream at RMB 33.7 billion (-21.8%), milk powder at RMB 16.4 billion (-13.7%), and cheese at RMB 21.1 billion (-6.3%) [2]. - The company achieved a gross margin of 40.3%, an increase of 1.9 percentage points year-on-year, and an operating profit margin of 7%, up 0.6 percentage points year-on-year [2]. Profit Forecast - The forecast for net profit attributable to shareholders for 2024-2026 is RMB 45.0 billion, RMB 50.2 billion, and RMB 55.8 billion, respectively, with corresponding EPS of RMB 1.14, RMB 1.28, and RMB 1.42 [3][4]. - The dynamic PE ratios for the same period are projected at 11x, 9x, and 9x [3]. Strategic Initiatives - The company is focusing on enhancing shareholder returns through share buybacks and increasing dividend payouts [2]. - The FIRST strategy will continue to drive high-quality development in operations and management [2]. - The company is addressing the supply-demand imbalance in raw milk through various support measures to stabilize dairy farming operations [2].

Investment Rating - The report maintains a "Buy" rating for Mengniu Dairy (2319.HK) [2][5] Core Views - The company reported a total revenue of 44.671 billion yuan for H1 2024, a decrease of 12.61% year-on-year, and a net profit attributable to shareholders of 2.446 billion yuan, down 19.03% year-on-year. The company also announced a share buyback plan of up to 2 billion HKD over the next 12 months, reflecting confidence in its operations [3][4] - Despite a temporary decline in dairy products due to high inventory, Mengniu Dairy is actively managing costs, with management expenses down 11.14% year-on-year. The gross profit margin improved to 40.26%, up 1.86 percentage points year-on-year, primarily due to a decrease in raw milk prices [3][4] Summary by Sections Financial Performance - In H1 2024, revenue from liquid milk, ice cream, milk powder, cheese, and other products was 36.262 billion, 3.371 billion, 1.635 billion, 2.114 billion, and 1.288 billion yuan respectively, with year-on-year changes of -12.92%, -21.75%, -13.67%, -6.28%, and +26.35% [3] - The company's net profit margin for H1 2024 was 5.48%, a decrease of 0.43 percentage points year-on-year, attributed to increased sales expenses and other expenditures [3] - The operating profit margins for liquid milk, ice cream, milk powder, cheese, and other products were 7.04%, 11.41%, 1.44%, 5.61%, and 7.43% respectively, with notable increases in milk powder and cheese margins [3] Market Position and Strategy - In the short term, the dairy industry is experiencing a downturn due to oversupply and high inventory. However, as a leading player, Mengniu Dairy is innovating and expanding its product categories to meet diverse consumer needs, which is expected to facilitate a quicker recovery [4] - In the medium to long term, the company is expected to enhance its market share due to its leading channel advantages and rapid product iteration [4] Profit Forecast - The forecasted net profits for 2024, 2025, and 2026 are 4.211 billion, 4.621 billion, and 4.985 billion yuan respectively, with year-on-year growth rates of -12.43%, 9.74%, and 7.87% [5][9]

[Table_StockNameRptType] 蒙牛乳业（02319） 港股点评 蓄力长期，回购彰显信心 ——蒙牛乳业 24H1 业绩点评 主要观点： ⚫[Table_Summary] 公司发布 2024H1 业绩： ➢ H1：营业收入446.71亿（-12.6%），归母净利润24.46亿（-19.03%）， ➢ 回购：计划于未来 12 个月内，根据市场情况，进行最高达 20 亿港 元的股份回购。 ⚫ 收入端主动调整库存 ➢ 24H1 公司实现营业收入 446.71 亿，同比-12.6%。分品类来看， 液态奶 H1 收入为 362.62 亿元，同比-12.9%，公司 Q2 以来主动 调整库存，常温白奶需求相对较弱，鲜奶品类挑战较大，但每日鲜 语品类逆势增长。 ➢ 冰淇淋/奶粉/奶酪 H1 营业收入分别为 33.71/16.35/21.14 亿元，同 比分别-21.8%/-13.7%/-6.3%，国内冰淇淋行业面临去库存压力， 影响 Q2 旺季销售，东南亚销售优于国内。奶粉品类受出生率等因 素影响收入，未来关注成人粉市场及功能线产品。奶酪方面，7 月 蒙牛奶酪注入妙可蓝多交易完成。 ➢ 大 B 端市场拓展，努 ...

Financial Performance - Revenue for the first half of 2024 was RMB 44.6705 billion, a decrease of 12.6% year-on-year[2] - Gross profit margin increased by 1.9 percentage points to 40.3%[2] - Operating profit was RMB 3.1193 billion, with an operating profit margin of 7.0%, up 0.6 percentage points[2] - Profit attributable to equity shareholders was RMB 2.4458 billion[2] - Total revenue for H1 2024 was RMB 44,670,500 thousand, down 12.6% compared to RMB 51,118,523 thousand in H1 2023[12][13] - Revenue for the first half of 2024 decreased by 12.6% to RMB 44.6705 billion compared to RMB 51.1185 billion in the same period last year[53] - Gross profit margin increased by 1.9 percentage points to 40.3% due to lower raw milk prices, despite a decline in gross profit to RMB 17.9847 billion[54] - Operating profit margin improved by 0.6 percentage points to 7.0%, with operating profit declining by 4.8% to RMB 3.1193 billion[55] - EBITDA decreased by 7.5% to RMB 4.7908 billion, but EBITDA margin increased by 0.6 percentage points to 10.7%[56] - Net profit attributable to equity shareholders fell by 19.0% to RMB 2.4458 billion, with basic earnings per share dropping to RMB 0.623[56] - Capital expenditure decreased by 10.3% to RMB 1.6929 billion, primarily allocated to new and upgraded production facilities[58] - Net cash inflow from operating activities decreased by 44.4% to RMB 1.9199 billion, mainly due to lower net profit and increased raw material inventory[59] - Total interest-bearing borrowings increased to RMB 41.5623 billion, with a debt-to-equity ratio of 81.3%[60] Segment Performance - The company operates in five reportable segments: liquid milk, ice cream, milk powder, cheese, and other dairy-related businesses[11] - Segment performance is evaluated based on adjusted pre-tax profit/loss, excluding interest income, non-lease financing costs, and other items[11] - Segment assets and liabilities exclude investments in associates and other non-segment corporate assets and liabilities[11] - Liquid milk business revenue decreased to RMB 36,261,544 thousand in H1 2024 from RMB 41,640,229 thousand in H1 2023, a decline of 12.9%[12][13] - Ice cream business revenue dropped to RMB 3,371,448 thousand in H1 2024 from RMB 4,308,698 thousand in H1 2023, a decrease of 21.7%[12][13] - Segment profit for liquid milk business was RMB 2,551,326 thousand in H1 2024, down 9.5% from RMB 2,818,627 thousand in H1 2023[12][13] - Ice cream business segment profit declined 46.3% to RMB 384,750 thousand in H1 2024 from RMB 716,223 thousand in H1 2023[12][13] - Powdered milk business revenue decreased 13.7% to RMB 1,635,262 thousand in H1 2024 from RMB 1,894,213 thousand in H1 2023[12][13] - Cheese business revenue declined 6.3% to RMB 2,114,319 thousand in H1 2024 from RMB 2,256,051 thousand in H1 2023[12][13] - Liquid milk revenue accounted for 81.2% of total revenue, amounting to RMB 36.2615 billion, a decline from RMB 41.6402 billion in the previous year[60] - Revenue from ice cream products was RMB 3.3714 billion, accounting for 7.5% of Mengniu's total revenue (2023: RMB 4.3087 billion, 8.4%)[66] - Revenue from milk powder products was RMB 1.6353 billion, accounting for 3.7% of Mengniu's total revenue (2023: RMB 1.8942 billion, 3.7%)[67] - Revenue from cheese products was RMB 2.1143 billion, accounting for 4.7% of Mengniu's total revenue (2023: RMB 2.2561 billion, 4.4%)[68] Balance Sheet and Equity - Total assets as of June 30, 2024, were RMB 79.5696 billion, a decrease from RMB 81.0917 billion at the end of 2023[6] - Total liabilities as of June 30, 2024, were RMB 65.6047 billion, compared to RMB 64.5682 billion at the end of 2023[7] - Net current liabilities were RMB 512.871 million, compared to net current assets of RMB 1.5342 billion at the end of 2023[7] - Net assets increased to RMB 51.1186 billion from RMB 50.6517 billion at the end of 2023[7] - Total equity increased to RMB 51,118,603 thousand as of June 30, 2024, compared to RMB 50,651,711 thousand as of December 31, 2023[8] - Retained earnings rose to RMB 34,586,416 thousand as of June 30, 2024, up from RMB 34,064,964 thousand as of December 31, 2023[8] - Non-controlling interests increased to RMB 6,390,550 thousand as of June 30, 2024, compared to RMB 6,331,752 thousand as of December 31, 2023[8] - The company's current liabilities exceeded current assets by RMB 512,871 thousand as of June 30, 2024[9] - Total assets increased to RMB 116,723,294 thousand as of June 30, 2024, up 1.3% from RMB 115,219,951 thousand as of December 31, 2023[12][13] Shareholder Returns and Dividends - The company plans to repurchase up to HKD 2 billion worth of shares in the next 12 months[2] - The company did not declare an interim dividend for the first half of 2024, consistent with the previous year's policy[26] - Final dividend for the previous fiscal year amounted to RMB 1,924.4 million, representing RMB 0.489 per share, a 21.2% increase from RMB 0.402 per share in 2023[27] - The weighted average number of ordinary shares used for calculating basic earnings per share was 3,928,960 thousand shares in 2024, compared to 3,948,977 thousand shares in 2023[29] - The weighted average number of ordinary shares used for calculating diluted earnings per share was 3,933,283 thousand shares in 2024, compared to 3,963,703 thousand shares in 2023[31] - The company plans to repurchase up to HK$2 billion worth of shares within the next 12 months to enhance shareholder returns[75] Sustainability and Environmental Initiatives - The company continues to implement its "GREEN" strategy and "Dual Carbon" goals, focusing on sustainable development initiatives[2] - The company has established a "1+N" sustainability reporting system and released multiple reports including the "2023 Sustainability Report" and "Natural-related Financial Disclosure Report," making it the first in China's dairy industry to follow the TNFD framework[71] - The company has set quantitative goals for green packaging transformation, including reducing fossil-based virgin plastics and increasing the use of recycled and degradable materials[71] - The company has partnered with AiHuiShou to launch a "Dairy Packaging Plastic Reduction and Renewal Plan," aiming to reduce packaging waste and promote green consumption[71] - The company has become a member of RSPO and initiated sustainable palm oil procurement, while also delivering China's first "zero-deforestation" soybeans[71] Product Innovation and Market Expansion - The company launched new products such as 0-lactose milk and various flavored milk teas to cater to diverse consumer needs[36] - Mengniu's low-temperature dairy business outperformed the industry with a 20-year consecutive market share leadership, achieving continuous improvement in product structure and profitability[38] - Mengniu's low-temperature yogurt upgraded to 100% raw milk formula, with strong growth in the 0-sugar and fruit-flavored segments, driving high sales growth in 2024[38] - Mengniu's fresh milk business achieved double-digit growth for the premium brand "Daily Fresh Language," with innovative products like double-protein milk gaining market acclaim[39] - Mengniu's fresh milk business led in online and offline channels, securing the top market share in platform and fresh e-commerce, and launched the industry's first self-operated Douyin live-streaming room[39] - Mengniu's infant formula business turned profitable in H1 2024, focusing on functional nutrition and operational efficiency, with the Ruiburen brand enhancing R&D and sales channels[40] - Ruiburen released the world's first MLCT clinical results, a patented innovation in infant formula, strengthening its competitive edge[41] - Mengniu's ice cream business strengthened brand and product innovation, with the "Sui Bian" brand upgrading its product line and launching premium series to meet young consumer demands[44] - Mengniu's overseas ice cream brand, Aice, achieved strong sales growth and profitability, maintaining the top market share in Indonesia and second in the Philippines[44] - Mengniu's cheese business is positioned for long-term growth as Chinese consumers shift from "drinking milk" to "eating milk," driving the industry's transformation from rough to refined processing[45] - Miao Kelan achieved a market share of over 30% in the cheese market, maintaining its leading position[46] - Miao Kelan launched new adult-ready-to-eat nutrition cheese products in May 2024, expanding its product matrix[46] - Miao Kelan completed the 100% cash acquisition of Inner Mongolia Mengniu Cheese Co., Ltd. in June 2024 to consolidate its leadership in the cheese category[46] - Mengniu's Ruibuen led the release of the first domestic group standard for detecting 7 human milk oligosaccharides (HMOs) in infant formula and modified milk powder in March 2024[47] - Hongmo Biotechnology, a subsidiary of Mengniu, completed a nearly 100 million yuan Pre-A round of financing in May 2024[47] - Mengniu's M-Science brand became the official sports nutrition sponsor for the Chinese Triathlon National Team and major marathons[47] - M-Science launched the Fast-Endura™ energy gel series and Fast-hydro technology electrolyte products in early 2024[48] - Zhenguoli brand launched new milk tea series products targeting young consumers, featuring "zero milk powder, zero non-dairy creamer, zero trans fat"[63] - Mengniu upgraded its low-temperature yogurt products to 100% raw milk formula and expanded into the 0-sugar and fruit particle segments[64] - YouyiC low-temperature probiotic drink maintained its No.1 brand power in the industry for three consecutive years[65] - Daily Fresh brand launched innovative Double Protein Milk product, adding 6 almonds per 350mL cup[66] - Ruiburen infant formula upgraded its core product to A2 β-casein milk source in 2024[67] - Miaokelando expanded its product matrix with new adult snack cheese products and launched industry-first cheese innovations for B2B catering[68] Operational and Strategic Initiatives - The company strengthened its RTM channel strategy, enhancing dealer empowerment and online penetration[36] - The company expanded its B2B market, collaborating with brands like Yum China and Mixue Bingcheng in the foodservice sector[37] - The company provided nearly 730 million yuan in financial support to upstream partners in the first half of 2024[51] - Mengniu's "World Quality" activities attracted over 2,000 consumers to visit more than 60 factories during the 315 special event[50] - The company is focusing on R&D innovation, brand building, digital transformation, and channel optimization to drive high-quality development[73] - The company aims to lead the dairy industry into a new phase of "high-tech, high-efficiency, and high-quality" development[74] Governance and Compliance - The company adopted revised International Financial Reporting Standards (IFRS) during the period, including amendments to IAS 1 and IFRS 16[10] - The company's audit committee reviewed unaudited interim financial information for the six months ending June 30, 2024, ensuring compliance with governance standards[79] - The company's interim financial information was reviewed by KPMG, with an unmodified conclusion report included in the interim report[80] - The Board of Directors expressed gratitude to shareholders and the community for their consistent support, and acknowledged the hard work and loyalty of all employees[83] Employee and Workforce - As of June 30, 2024, the company employs over 43,000 staff across mainland China, Hong Kong, Oceania, and Southeast Asia[72] Cost and Expenses - Cost of sales decreased to RMB 26,664.1 million in 2024, down 15.3% from RMB 31,476.4 million in 2023[19] - Employee benefit expenses, including executive compensation, totaled RMB 4,204.2 million, a 5.0% decrease from RMB 4,424.1 million in 2023[19] - Current income tax expense was RMB 663.0 million, slightly lower than RMB 673.4 million in 2023[22] - Sales and distribution expenses decreased by 8.8% to RMB 12.6805 billion, accounting for 28.4% of revenue, up from 27.2% in the previous year[55] Inventory and Write-downs - Inventory write-downs surged to RMB 346.1 million in 2024, a significant increase from RMB 22.8 million in 2023[18] Government Subsidies - Government subsidies increased to RMB 285.0 million in 2024, up 9.9% from RMB 259.3 million in 2023[17] Accounts Receivable and Payable - Accounts receivable and notes, net of loss provisions, amounted to RMB 3,437,856 thousand as of June 30, 2024, a decrease from RMB 3,668,604 thousand as of December 31, 2023[33] - Accounts payable and notes totaled RMB 9,166,225 thousand as of June 30, 2024, down from RMB 9,499,441 thousand as of December 31, 2023[34] Online and Retail Channels - The company's online membership exceeded 82 million, with a significant increase in new retail membership[36] Overseas and Domestic Revenue - Overseas revenue accounted for 5.3% of total revenue in H1 2024, reaching RMB 2,351,871 thousand[15] - Mainland China revenue was RMB 42,318,629 thousand in H1 2024, representing 94.7% of total revenue[15] - Revenue from overseas markets accounted for RMB 2,121.3 million, representing 4.1% of total revenue, with ice cream contributing RMB 968.1 million (45.6% of overseas revenue)[16] Production Capacity - Mengniu has 45 production bases in China and 6 overseas, with a total annual production capacity of 13.9 million tons (December 2023: 14.04 million tons)[69]