Huatai Securities: Milkground's Core Cheese Business Maintains Positive Momentum
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Abstract
Milkground (600882 CH) released preliminary results for the first three quarters of 2026: revenue of RMB4.87 billion, net profit attributable to shareholders of RMB210 million and net profit excluding non-recurring items of RMB150 million, up 23.0%, 20.4% and 28.2% year on year respectively. Third-quarter revenue rose 12.4% to RMB1.56 billion while attributable net profit jumped 40.9% to RMB60 million, lifting net margin year on year.
Although non-core businesses such as liquid milk and trading weighed on growth, the core cheese business grew more than 20% year on year in both consumer and B2B channels. Consumer operations stayed competitive through product upgrades and channel expansion, while B2B continued advancing import substitution across five core customer groups. China Mengniu Dairy keeps providing supply-chain and channel synergies.
Huatai Securities maintains an Overweight rating with a target price of RMB22.72, expecting profit upside from B2B import substitution, new product rollouts and expense optimization. It forecasts 2026-2028 EPS of RMB0.71, RMB0.90 and RMB1.09, sees net margin rising to 7%-8% over the medium to longer term with an 8%-10% long-term goal, and flags raw material price swings, food safety and intensifying competition as key risks.