The Zhitong Finance App learned that Guoyuan Securities released a research report saying that China's Feihe (06186) has a wide moat. With the recovery of the industry, the implementation of new national standards, and the further increase in domestic investment share, the company's performance can be expected to improve and maintain the purchase rating.
The report said that in 22H2, the company's infant formula returned to the growth channel, and revenue rebounded to 11.44 billion yuan. In terms of production capacity, as of the end of '22, the company designed a total annual production capacity of about 307,000 tons, an increase of 15% over the previous year. In addition, construction of a new plant in Qiqihar progressed in an orderly manner.
The bank believes that fertility policies continue to be optimized, and the birth rate is expected to bottom out. Furthermore, the implementation of the new national standard has accelerated the clearance of small and medium-sized brands, and foreign-funded enterprises such as Abbott have gradually shifted their focus overseas, all of which are conducive to continuing to concentrate their shares on leading domestic dairy companies represented by Feihe.