Overview Key strengths Key risks Strong commitment and likelihood of support from a parent with a solid credit profile. Geography and product concentration. Second-largest producer of raw milk in China. Volatile input and output prices. Enhanced productivity with improving unit yield. Large maintenance capital expenditure that leads to negative free operating cash flow and somewhat tight liquidity. China Mengniu Dairy Co. Ltd. (Mengniu; BBB+/Stable/--) controls CMD with a 56% interest. CMD is integral to the parent's business and growth strategy, because the former cannot easily replace CMD's supply without jeopardizing its own operations. During the last industry downturn in 2017, Mengniu supported CMD by raising its shareholding and injecting liquidity. In the current downcycle since 2022, Mengniu continues to honor
