Research Update: China Modern Dairy Holdings Ltd. 'BBB' Ratings Affirmed On Continuing Strong Parent Support; Outlook Stable

China Modern Dairy Holdings Ltd. (CMD) should see a dip in margin due to a sharp rise in feed costs. Nonetheless, EBITDA growth from solid demand and expansion of production volume should drive improvement in debt leverage. CMD remains a highly strategic subsidiary of China Mengniu Dairy Co. Ltd. (Mengniu). As its largest milk supplier, CMD is important to Mengniu's growth and longer-term supply stability. Mengniu also has a record of providing financial support to CMD. On June 16, 2022, S&P Global Ratings affirmed its 'BBB' long-term issuer credit rating on CMD and the 'BBB' long-term issue rating to the company's senior unsecured notes. The stable outlook on CMD reflects the outlook on Mengniu and our expectation that CMD will

...- China Modern Dairy Holdings Ltd. (CMD) should see a dip in margin due to a sharp rise in feed costs. Nonetheless, EBITDA growth from solid demand and expansion of production volume should drive improvement in debt leverage. - CMD remains a highly strategic subsidiary of China Mengniu Dairy Co. Ltd. (Mengniu). As its largest milk supplier, CMD is important to Mengniu's growth and longer-term supply stability. Mengniu also has a record of providing financial support to CMD. - On June 16, 2022, S&P Global Ratings affirmed its '###' long-term issuer credit rating on CMD and the '###' long-term issue rating to the company's senior unsecured notes. - The stable outlook on CMD reflects the outlook on Mengniu and our expectation that CMD will remain a highly strategic subsidiary of Mengniu. The rating and outlook on CMD will therefore move in tandem with those on Mengniu....

Research Update