Glonghui, December 1 | According to a report published by China Merchants Securities, Mengniu Dairy's third-quarter revenue may have experienced low unit growth; Mengniu's revenue growth in the second half of the year may be hundreds of units, and the increase in gross margin may be lower than originally anticipated. The bank lowered Mengniu's adjusted earnings per share estimate for the 2023-2025 fiscal year by 3.2%, 2.8% and 1.1%, respectively, to reflect the reduction in revenue and gross margin assumptions for the second half of the year. The target price dropped from HK$36.2 to HK$30.9. Mengniu's earnings per share are expected to grow at a CAGR of 16.5% from FY2023 to FY2025. Currently, Mengniu's price-earnings ratio is 1.7 standard deviations below the historical average, and is close to a ten-year low. The bank believes that Mengniu's valuation is underestimated. As consumption recovers, Mengniu's stock price will be revalued to maintain its “increased holdings” rating.