Capital, Earnings & M&A
Can Mengniu Still Achieve Its 'Double 100 Billion' Goal Amid Its Buying Spree?
Picking up sesame seeds while dropping the watermelon. On the evening of March 24, just before Mengniu Dairy (02319.HK) released its 2019 financial report, Miaokeland announced plans to raise 890 million yuan through a private placement to Mengniu, which would become its second-largest shareholder. This adds another chapter to Mengniu's continuous acquisition spree in recent years, while also laying hidden dangers for its high debt ratio compared to peers. Analysts believe that Mengniu's upcoming 2019 financial report will maintain growth in both revenue and net profit. However, behind the impressive report lies the low base in 2018 and excessive promotions in 2019, with the high growth in net profit attributed to the sale of its high-quality asset, Junlebao.
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