Bulletin: Mengniu's EBITDA Declines Should Narrow In 2025

This report does not constitute a rating action. HONG KONG (S&P Global Ratings) Feb. 21, 2025--China Mengniu Dairy Co. Ltd.?s EBITDA declines may narrow this year as oversupply eases in China's raw milk market. We now expect the milk retailer's EBITDA for 2024 and 2025 to be slightly better than our original projections, following profit warnings from Mengniu (BBB+/Stable/--) and affiliates. The preliminary financial information supplied show that 2024 Mengniu outperformed our expectations, chiefly due to the company's upstream farming subsidiary China Modern Dairy Holdings Ltd. (CMD; BBB/Stable/--). Higher-than-expected declines in feed costs likely enabled CMD to generate more EBITDA than we had forecasted, despite a drop in revenue and weak raw milk market. We anticipate raw milk prices will

...February 20, 2025 This report does not constitute a rating action. HONG KONG (S&P Global Ratings) Feb. 21, 2025--China Mengniu Dairy Co. Ltd.'s EBITDA declines may narrow this year as oversupply eases in China's raw milk market. We now expect the milk retailer's EBITDA for 2024 and 2025 to be slightly better than our original projections, following profit warnings from Mengniu (###+/Stable/--) and affiliates. The preliminary financial information supplied show that 2024 Mengniu outperformed our expectations, chiefly due to the company's upstream farming subsidiary China Modern Dairy Holdings Ltd. (CMD; ###/Stable/--). Higher-than-expected declines in feed costs likely enabled CMD to generate more EBITDA than we had forecasted, despite a drop in revenue and weak raw milk market. We anticipate raw milk prices will stabilize this year, and then begin to rise in late 2025 and 2026. That will aid CMD's revenue and profit margin as well as those of Mengniu. We now estimate Mengniu's consolidated...

Bulletin