mengniu 2024 interim report: crossing cyclic challenges and leading a new quality future
2024-08-29
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on august 29, mengniu dairy (2319.hk) held a 2024 interim results conference in hong kong. the interim results announcement showed that in the first half of 2024, mengniu achieved revenue of rmb 44.67 billion, a year-on-year decrease of 12.6%; the company actively and effectively responded to external challenges, achieved operating profit of rmb 3.12 billion, and the operating profit margin increased by 0.6 percentage points year-on-year to 7%. faced with the current situation of the industry such as the prominent contradiction between demand and supply and consumer demand falling short of expectations, mengniu actively embraced change, increased category innovation, business format innovation, and model innovation, and improved quality and efficiency from the pursuit of "scale benefits" to "value creation", achieving counter-cyclical growth in multiple categories, and continuously shaping the new quality productivity of china's dairy industry.
at the same time as the performance announcement, mengniu actively improved shareholder returns and announced plans to repurchase shares with a total scale of up to hk$2 billion in the next 12 months, demonstrating the company's firm confidence in business development, future profitability and long-term stable development.
embrace change and rise to challengesadvantageous categories consolidate industry position
currently, there is an oversupply of raw milk, and consumer demand is lower than expected, so the dairy industry as a whole is experiencing a short-term decline. facing cyclical challenges, mengniu has adapted to market changes and taken the initiative to rise to the challenge. while consolidating its position in the industry with its advantageous categories, multiple subcategories have achieved growth against the trend.
room temperature liquid milk businesswe will continue to strengthen our products and brands, continuously improve operational and execution efficiency, and achieve higher profit margins. telunsu continues to deepen its “better” brand concept, and its organic series products have once again won the gold medal at the german international organic expo, boosting its brand influence. mengniu’s parent brand has launched lactose-free milk to supplement the niche market and expand the number of people who drink milk.
low temperature yogurt categorythe improvement of product structure has driven the continuous improvement of profitability, achieving the goal of outperforming the industry against the trend, and maintaining the first place in market share for 20 consecutive years. with a precise focus on nutrition, function, and deliciousness, the sales volume of daily fresh cheese products has increased rapidly, and the market share has further increased. the brand of youyi c has been ranked first in the industry for three consecutive years.
fresh milk categorywe continued to focus on consumer value and achieved growth against the trend, especially the high-end brand daily fresh achieved double-digit growth against the trend, outperforming the industry. daily fresh's new double-protein milk product was launched, with outstanding reputation and sales, becoming a hot product on the platform. the sub-brand xiaoxianyu continued to "resonate with young people" and achieved double-digit growth in sales.
milk powder categoryfocus on model reshaping and achieve a turnaround. during the period, ruiboen actively worked on building r&d strength and adjusting sales channels to further enhance brand strength. yourui continued to upgrade its formula, focusing on functional products such as strengthening bones, joints, and muscles, and improving the competitiveness of precision nutrition and health products for middle-aged and elderly people. bellamy actively deployed in the southeast asian market, optimized product structure, launched new products noril infant formula and organic children's high calcium growth milk powder, and maintained the top brand of organic milk powder in cross-border e-commerce.
at present, changes in consumption structure and consumption habits still contain potential opportunities. in line with the trend of channel reshaping, mengniu has made great efforts to expand channel innovation and deepen offline channels. warehouse stores, discount stores and other high-quality and cost-effective consumer venues have shown good growth momentum. it leads the industry in o2o channels and further improves its market share advantage. mengniu's full-line products continue to create a full-domain business model of "traditional e-commerce + interest e-commerce + social e-commerce", and through cooperation platform promotion activities, 3.15 factory traceability live broadcast, exclusive product self-broadcast matrix, public domain expansion and private domain efficient fission and other measures, it drives the online and offline synergy and efficiency of all categories.
dare to change and compete with ourselves to integrate and create new growth poles
in order to cope with the complex situation of accelerated changes in the industry, mengniu's management team has undergone adjustments, faced short-term challenges, looked within, and dared to innovate, leading the entire group to accelerate and move forward, starting a new round of adjustments and upgrades. while stimulating the potential on the demand side, it also dared to change on the supply side, and launched a combination of structural optimization, category innovation, business innovation, and model innovation.
in the cheese business,mengniu's subsidiary, meiji landou, actively expanded consumption scenarios, opened up room for category growth, further consolidated its competitive advantages in subdivided fields, and maintained its first place in market share, maintaining its absolute leading position in market share. during the period, meiji landou completed the cash acquisition of 100% equity of mengniu cheese held by the group, further integrating business development and consolidating its leading position in the cheese category.
ice cream businessactively innovate and break through, firmly lead the brand, and achieve a breakthrough in the new consumption paradigm. during the period, brands such as suibian, tilan shengxue, green mood, and bing+ carried out product innovation and upgrading. bing+'s cross-border joint new product beer ice cream won the only gold award in the 10th world food innovation award. in terms of overseas ice cream business, ai xue's product strength, brand strength, and channel strength have been further improved, with strong overall sales revenue growth and a significant increase in profit margins, firmly ranking first in indonesia's market share.
in the professional nutrition track,the maisheng brand has improved its product matrix including liquid protein product lines, aerobic sports product lines, protein bar product lines, etc., which fully meet the sports nutrition needs of aerobic sports people, anaerobic sports people, and mass sports people. it has pioneered and launched a number of innovative technologies. sales in the first half of the year increased more than three times year-on-year, and it continues to lead the development of china's sports nutrition field.
innovation is not only reflected in the c-end, but also in the b-end expansion. mengniu adheres to the business philosophy of "professional dairy products, focused on creation", explores new formats and models, and collides with many world-renowned brands in the fields of catering, coffee, tea, baking, etc., gradually shaping a new growth pole for the business. mengniu has reached a strategic cooperation with yum china. in august this year, mengniu's "green mood" and "kfc" jointly launched the joint product "green mood milky ice cream", which has entered more than 10,000 offline kfc stores across the country. mengniu has started a strategic cooperation with daka international, a subsidiary of mixue group, and reached a consensus on the supply of pasteurized milk, milk powder and other production raw materials.
new quality stimulates new momentum and leads the new future of china's dairy industry
as the "national team" of china's dairy industry, mengniu has always played a demonstration role in r&d innovation, intelligent manufacturing, esg and other fields, bringing glory and glory to china's dairy industry on the international stage.
in the field of r&d innovation, mengniu, as the main completion unit, submitted the "innovation and application of key technologies for the exploration and industrialization of excellent lactic acid bacteria germplasm resources", which won the second prize of the national science and technology progress award, becoming the only company in the industry to win this honor twice. mengniu holding company hongmo bio successfully completed a pre-a round of financing of nearly 100 million yuan, and its independently developed human milk oligosaccharides (hmo) obtained the gras (generally recognized as safe) certification from the u.s. food and drug administration (fda), continuing to consolidate its position as a leader in china's hmo.
in the field of intelligent manufacturing, the mengniu ningxia factory, the world's first fully digital super-intelligent factory in the dairy industry, has set a benchmark for the global dairy industry's "new quality productivity" with high technology, high efficiency and high quality after one year of operation. the factory's labor productivity is nearly 20 times higher than that of traditional factories, creating the highest labor efficiency ratio in the world's dairy factories. at the same time, energy consumption has been reduced by 43% overall, and the transformation efficiency has been increased by 15% through technologies such as real-time online detection of key quality points, ensuring the uniformity of milk quality standards.
in the field of esg, mengniu takes "protecting the common health of mankind and the earth" as its sustainable development vision and continues to promote the implementation of the "green" sustainable development strategy. during the period, it launched the "1+n" sustainable development report disclosure system and released the first "nature-related information disclosure report" (tnfd report) in china's dairy industry, demonstrating its determination for green transformation. in may this year, the first batch of "zero deforestation" soybeans purchased by modern dairy, a subsidiary of mengniu, arrived at hong kong for delivery, helping mengniu build a greener global supply chain. in addition, the group has also reached a sustainable development strategic cooperation with the french belle group to carry out in-depth cooperation in the field of sustainable development in areas such as low-carbon agricultural practices.
in terms of brand building, mengniu has integrated the spirit of "striving for strength" from the olympic games into the daily lives of ordinary people, and continued to deliver its brand value proposition. as the world's first olympic global partner (top) from the dairy industry, mengniu took the paris olympics as an opportunity to deeply integrate the olympic spirit with the concepts of national fitness and national health, and jointly produced and released the theme film "opening" and "i'll go to the big points for my hometown athletes" with director zhang yimou's team. market activities have frequently "broken the circle", and continuously supported the holding of mass marathon events such as the beijing half marathon, and continued to shape its brand image.
looking ahead, driven by strong national policies, the macro-economy and consumer confidence are expected to continue to pick up, and consumers' emphasis on nutritional value and health functions will bring new growth opportunities. as an industry leader, mengniu will actively respond to industry challenges, maintain strategic focus, firmly adhere to first, drive high-quality development with dual operations and management, continue to focus on r&d innovation, brand building, and digital transformation, accelerate channel optimization and new business development, and lead the new quality future of china's dairy industry with "high-tech, high-efficiency, and high-quality".
