China Mengniu Dairy Company Limited (HKG:2319) Analysts Are Cutting Their Estimates: Here's What You Need To Know

Last week, you might have seen that China Mengniu Dairy Company Limited (HKG:2319) released its half-year result to the market. The early response was not positive, with shares down 6.9% to HK$15.20 in the past week. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥42b, statutory earnings were in line with expectations, at CN¥0.027 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the current consensus, from the 31 analysts covering China Mengniu Dairy, is for revenues of CN¥83.2b in 2025. This implies a small 2.8% reduction in China Mengniu Dairy's revenue over the past 12 months. China Mengniu Dairy is also expected to turn profitable, with statutory earnings of CN¥1.08 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥90.0b and earnings per share (EPS) of CN¥1.29 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

Check out our latest analysis for China Mengniu Dairy

The analysts made no major changes to their price target of HK$22.97, suggesting the downgrades are not expected to have a long-term impact on China Mengniu Dairy's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic China Mengniu Dairy analyst has a price target of HK$28.39 per share, while the most pessimistic values it at HK$19.99. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 5.5% annualised decline to the end of 2025. That is a notable change from historical growth of 3.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.2% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - China Mengniu Dairy is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at HK$22.97, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for China Mengniu Dairy going out to 2027, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for China Mengniu Dairy that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.