7164238845

Ilu* company    __

ol 1.53 btllion yuan for the second bałt and an annnal net los*. of 948.6 mil-lion yuan.

To restore its reputation. Meng-niu conducted massive promotlon and adverlising campaigns and es-tablislu*d a senes of ton troi measurcs to help cnsurc product ąuality.

Its A-share listed peers - Inncr Mongolia Yill Industrial Group, Brigltt Dairy & Food and Beijing San-yuan Foods - all have reported en-couraging results. Their revenue grew betwecn 0.13 per cent and 73.13 por cent. while their net profits

bandry Assoctatum .........

vides a favourable emironment fot tlu* industry. Merrill l.ynch estimates it led to gross margin growth ol 6 per-centoge points in tlu* dairy industry.

“Since milk accounts for 45 per cent of Mengnius cost of goods sold. a 10 per cent drop in raw milk priccs would boost gross ntargins by 3.5 percentagc points," KGI analyst lane Wu wrole in a report.

She said along with morę aggres-sive awrage sclling prices because of product mix upgradcs and reduc-

lowet tax ratę.

1P Morgan improving profit will drop

Margin booster

ot raw milk

in

yuan

2.90

2.60

2.30

Price

3.20

2.00

1.70

«UP0«

Jan 07

Still. Mengniu.