On March 29, Mengniu Dairy released its 2022
annual report announcement. According to the announcement, Mengniu achieved an annual income of
RMB 92.6 billion, which was a YoY increase of 5.1%. The operating profit was
RMB 5.4 billion, a YoY increase of 11.6%. Among the products, room temperature
pure milk and high-end brands achieved strong growth. Additionally, the
company's fresh milk and ice cream outperformed its industrial competitors, and
low temperature cheese continued to be an industry leader.
Mengniu's
steady performance growth in 2022 is very prominent amind a sluggish consumer
market in China. Statistics show that in 2022, the total retail sales of social
consumer goods in various industries in China decreased by 0.2% year-on-year,
showing an overall recession. Mengniu's growth against the decreasing trend in
the consumer market shows that Mengniu holds a leading role in China's dairy
industry, and that there is still room for growth in China's dairy industry
market.
Mengniu's ice cream
business line acheives growth in 2022
Currently,
Mengniu has four main production lines, namely liquid milk, ice cream, milk
powder and cheese. Liquid milk is still Mengniu's basic market. In 2022, the
company achieved a revenue of RMB 78.3 billion from liquid milk, accounting for
84.5% of the company's total revenue, a YoY increase of 2.3% compared to 2021.
The growth was mainly driven by high-end products such as Deluxe Milk and Shiny
Meadow.
While the
basic market is growing steadily, Mengniu's other business lines have also
recorded rapid growth. Among them, the ice cream business earned the most, with
revenue increasing by 33.3% YoY to RMB 5.7 billion. Mengniu's ice cream
business surpassed its milk powder business for the first time in the past 10
years and became Mengniu's second-highest performing business unit. Although
the current revenue shares from cheese and milk powder are small, less than
10%, these business continue to improve.
Mengniu acquires
Milkland as part of "first" growth strategy
Mengniu has
completed a tender offer for the cheese giant Milkland at the end of 2022, with
its shareholding ratio increasing to 35.1%. The cheese business is recognized
by the dairy industry as the next important growth point for dairy products,
with a market potential of over RMB 100 billion. Milkland has lived up to
Mengniu's high expectations, and the cheese and other sectors of this company
almost doubled their YoY revenue in 2022. The strong growth momentum is
expected to become Mengniu's second main revenue source.
According
to Mengniu’s CEO, Minfang Lu, the company plans to create a “new Mengniu” in
the next five years. The so-called rebuilding of a new Mengniu does not refer
to sales targets, profits, volume or market value, but to adopt the
"first" strategy, which means that the company aims to become a first
choice for customers, to be more international, and to have more
responsibility, passion, and technology. Through achieving these goals, Mengniu
Dairy aims to continue leading the Chinese dairy industry far into the future.
More information can be found at CCM Dairy Products China Monthly Report.
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