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China Mengniu Dairy Could Enjoy 4Q Bump From Lunar New Year Orders -- Market Talk

Dow Jones Newswires ·  Nov 10, 2021 02:02

0653 GMT - China Mengniu Dairy could enjoy a 4Q revenue bump due to advance orders for the Lunar New Year holiday, although topline growth may be weighed as volatility in China's Covid-19 case numbers hamper yoghurt and milk-beverage sales, China Galaxy International says. Yoghurt and milk-beverage products have higher gross margins, so the poor performance of these products could have a relatively large impact on overall margins. China Galaxy expects 2H gross margins to fall 0.4% on year. However, supply-cost pressures from rising raw milk prices should ease in 2022 as new milk production capacity comes online the broker adds. It keeps an add rating and HK$53.90 target on the stock, which falls 4.4% to HK$46.70. (yongchang.chin@wsj.com)

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