JPM Maintains Overweight Rating on MENGNIU DAIRY, Lowers Target Price to HKD20, Anticipates Sales and Earnings Recovery This Year
JPMorgan's Forecast: JPMorgan predicts MENGNIU DAIRY's sales and adjusted earnings will rebound by 2% and 17% YoY in 2026, following declines in 2025.
Market Environment: The competitive landscape is expected to improve, with MENGNIU DAIRY optimizing its product mix and expanding channels despite moderate demand and competition from other beverages.
Citi's Target Price Adjustment: Citi has raised MENGNIU DAIRY's target price to HKD21.1, expecting the operating profit margin to increase this year.
JPMorgan's Rating: JPMorgan maintains an Overweight rating on MENGNIU DAIRY but has lowered its target price from HKD22 to HKD20, citing strong sales during the Chinese New Year as a potential short-term catalyst.
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<Full-day Summary> HSI Falls 325 Points; HSTI Declines 59 Points; AIA Drops More Than 5%; ZTO EXPRESS-W, BOC HONG KONG, SHK PPT, REALORD GROUP, SANY INT'L Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) fell by 325 points (1.2%) to 26,559, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also experienced declines, with market turnover reaching $247.87 billion.
Active Heavyweights: Major stocks like Alibaba, Meituan, and Tencent saw significant drops, with Alibaba closing down 2.9% at $155, while Xiaomi and CCB managed slight gains.
Notable Movers: AIA experienced a sharp decline of 5.5%, while Li Auto and Mengniu Dairy saw increases of 3.6% and 3%, respectively, with several stocks hitting new highs.
Short Selling Trends: High short selling ratios were noted for several companies, including Ping An and CCB, indicating increased market speculation and potential bearish sentiment.
JPM Maintains Overweight Rating on MENGNIU DAIRY, Lowers Target Price to HKD20, Anticipates Sales and Earnings Recovery This Year
JPMorgan's Forecast: JPMorgan predicts MENGNIU DAIRY's sales and adjusted earnings will rebound by 2% and 17% YoY in 2026, following declines in 2025.
Market Environment: The competitive landscape is expected to improve, with MENGNIU DAIRY optimizing its product mix and expanding channels despite moderate demand and competition from other beverages.
Citi's Target Price Adjustment: Citi has raised MENGNIU DAIRY's target price to HKD21.1, expecting the operating profit margin to increase this year.
JPMorgan's Rating: JPMorgan maintains an Overweight rating on MENGNIU DAIRY but has lowered its target price from HKD22 to HKD20, citing strong sales during the Chinese New Year as a potential short-term catalyst.
Citi Raises MENGNIU DAIRY's Target Price to HKD21.1, Expects Operating Profit Margin to Rebound This Year
Citi's Research Report: Citi anticipates MENGNIU DAIRY will experience a more significant cyclical earnings recovery this year compared to other major consumer staples in China.
Sales and Profit Margin Outlook: The company's YoY sales decline is stabilizing, but the full-year operating profit margin for last year is expected to decrease slightly, below guidance.
Raw Milk Prices and Profit Margin Recovery: With raw milk prices stabilizing and positive operating leverage, MENGNIU DAIRY's operating profit margin is projected to expand this year.
Target Price Adjustment: Citi has raised its target price for MENGNIU DAIRY from HKD18.8 to HKD21.1 while maintaining a Buy rating.
CN Dairy Company Junlebao Submits IPO Application in Hong Kong; MENGNIU DAIRY Previously Held Significant Stake
Junlebao Dairy's Listing Application: Junlebao Dairy has submitted a listing application to the Hong Kong Stock Exchange, with CICC and Morgan Stanley as joint sponsors.
Market Position and Performance: As of 2024, Junlebao is the third-largest dairy company in China, holding a 4.3% market share, and reported a 29.6% increase in net profit to RMB837 million for the first three quarters of the year.
Ownership History: In 2010, Mengniu Dairy acquired a 51% stake in Junlebao, becoming its largest shareholder, but later sold its shares to Penghua Fund and Junqian Management in 2019.
Market Insights: HSBC Research has set a year-end target for the Hang Seng Index at 31,000, emphasizing the importance of market confidence and corporate earnings growth.
Analysis of the Top 5 Strongest and Weakest Stocks in HSCEI for 2025 (Table)
Top 5 Strongest Stocks: The strongest stocks in the HSCEI for 2025 include CHINAHONGQIAO (+177.4%), ZIJIN MINING (+152.2%), SMIC (+124.7%), POP MART (+109.4%), and INNOVENT BIO (+108.3%), with varying short selling ratios.
Top 5 Weakest Stocks: The weakest stocks in the HSCEI for 2025 are MEITUAN-W (-31.9%), LI AUTO-W (-31%), JD-SW (-17.9%), MENGNIU DAIRY (-15.1%), and HAIER SMARTHOME (-11.7%), also showing different short selling ratios.
Market Performance: The HSCEI index ended 2025 with a gain of 1,623 points, representing a 22.3% increase, closing at 8,913.
JD-SW Target Price Adjustment: HSBC Research has reduced the target price for JD-SW to $144 due to weaker-than-expected sales in the home appliance sector.
JPM Highlights Recommendations for Shifting Investments into Underperforming Quality Chinese Stocks (Table)
Stock Performance Overview: Various stocks including CCB, Midea GP, and Haier SmartHome showed mixed performance, with CCB and Haier experiencing declines, while Midea GP saw a slight increase.
Investment Ratings: Most companies listed, such as CCB, PetroChina, and China Mobile, received an "Overweight" investment rating, indicating a positive outlook, while Midea GP was rated "Neutral."
Short Selling Activity: Significant short selling was noted for several stocks, with CCB and Haier SmartHome having high short selling ratios, indicating potential bearish sentiment among investors.
Target Prices: Target prices for the stocks vary, with CCB set at HKD9.5 and PetroChina at HKD8, reflecting analysts' expectations for future performance.
<Full-day Summary> HSI Falls 325 Points; HSTI Declines 59 Points; AIA Drops More Than 5%; ZTO EXPRESS-W, BOC HONG KONG, SHK PPT, REALORD GROUP, SANY INT'L Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) fell by 325 points (1.2%) to 26,559, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also experienced declines, with market turnover reaching $247.87 billion.
Active Heavyweights: Major stocks like Alibaba, Meituan, and Tencent saw significant drops, with Alibaba closing down 2.9% at $155, while Xiaomi and CCB managed slight gains.
Notable Movers: AIA experienced a sharp decline of 5.5%, while Li Auto and Mengniu Dairy saw increases of 3.6% and 3%, respectively, with several stocks hitting new highs.
Short Selling Trends: High short selling ratios were noted for several companies, including Ping An and CCB, indicating increased market speculation and potential bearish sentiment.
JPM Maintains Overweight Rating on MENGNIU DAIRY, Lowers Target Price to HKD20, Anticipates Sales and Earnings Recovery This Year
JPMorgan's Forecast: JPMorgan predicts MENGNIU DAIRY's sales and adjusted earnings will rebound by 2% and 17% YoY in 2026, following declines in 2025.
Market Environment: The competitive landscape is expected to improve, with MENGNIU DAIRY optimizing its product mix and expanding channels despite moderate demand and competition from other beverages.
Citi's Target Price Adjustment: Citi has raised MENGNIU DAIRY's target price to HKD21.1, expecting the operating profit margin to increase this year.
JPMorgan's Rating: JPMorgan maintains an Overweight rating on MENGNIU DAIRY but has lowered its target price from HKD22 to HKD20, citing strong sales during the Chinese New Year as a potential short-term catalyst.
Citi Raises MENGNIU DAIRY's Target Price to HKD21.1, Expects Operating Profit Margin to Rebound This Year
Citi's Research Report: Citi anticipates MENGNIU DAIRY will experience a more significant cyclical earnings recovery this year compared to other major consumer staples in China.
Sales and Profit Margin Outlook: The company's YoY sales decline is stabilizing, but the full-year operating profit margin for last year is expected to decrease slightly, below guidance.
Raw Milk Prices and Profit Margin Recovery: With raw milk prices stabilizing and positive operating leverage, MENGNIU DAIRY's operating profit margin is projected to expand this year.
Target Price Adjustment: Citi has raised its target price for MENGNIU DAIRY from HKD18.8 to HKD21.1 while maintaining a Buy rating.
CN Dairy Company Junlebao Submits IPO Application in Hong Kong; MENGNIU DAIRY Previously Held Significant Stake
Junlebao Dairy's Listing Application: Junlebao Dairy has submitted a listing application to the Hong Kong Stock Exchange, with CICC and Morgan Stanley as joint sponsors.
Market Position and Performance: As of 2024, Junlebao is the third-largest dairy company in China, holding a 4.3% market share, and reported a 29.6% increase in net profit to RMB837 million for the first three quarters of the year.
Ownership History: In 2010, Mengniu Dairy acquired a 51% stake in Junlebao, becoming its largest shareholder, but later sold its shares to Penghua Fund and Junqian Management in 2019.
Market Insights: HSBC Research has set a year-end target for the Hang Seng Index at 31,000, emphasizing the importance of market confidence and corporate earnings growth.
Analysis of the Top 5 Strongest and Weakest Stocks in HSCEI for 2025 (Table)
Top 5 Strongest Stocks: The strongest stocks in the HSCEI for 2025 include CHINAHONGQIAO (+177.4%), ZIJIN MINING (+152.2%), SMIC (+124.7%), POP MART (+109.4%), and INNOVENT BIO (+108.3%), with varying short selling ratios.
Top 5 Weakest Stocks: The weakest stocks in the HSCEI for 2025 are MEITUAN-W (-31.9%), LI AUTO-W (-31%), JD-SW (-17.9%), MENGNIU DAIRY (-15.1%), and HAIER SMARTHOME (-11.7%), also showing different short selling ratios.
Market Performance: The HSCEI index ended 2025 with a gain of 1,623 points, representing a 22.3% increase, closing at 8,913.
JD-SW Target Price Adjustment: HSBC Research has reduced the target price for JD-SW to $144 due to weaker-than-expected sales in the home appliance sector.
JPM Highlights Recommendations for Shifting Investments into Underperforming Quality Chinese Stocks (Table)
Stock Performance Overview: Various stocks including CCB, Midea GP, and Haier SmartHome showed mixed performance, with CCB and Haier experiencing declines, while Midea GP saw a slight increase.
Investment Ratings: Most companies listed, such as CCB, PetroChina, and China Mobile, received an "Overweight" investment rating, indicating a positive outlook, while Midea GP was rated "Neutral."
Short Selling Activity: Significant short selling was noted for several stocks, with CCB and Haier SmartHome having high short selling ratios, indicating potential bearish sentiment among investors.
Target Prices: Target prices for the stocks vary, with CCB set at HKD9.5 and PetroChina at HKD8, reflecting analysts' expectations for future performance.
