China Mengniu Dairy Company (2319) warned it may record a drop in net profit for the first half of this year despite expected revenue increases. The company predicted that revenue would rise from a year ago, while net profit could drop by 45-60 percent year-on-year given a surge in costs, including additional expenses on virus epidemic prevention and control, accelerating sales efforts, as well as cash and supply donations during the pandemic. Mengniu said revenue in April and May had recovered and recorded double-digit growth compared with the same period in 2019. Citi maintains its "buy" accommodation of Mengniu, with an estimate that the company's net profit and sales would beat market expectations. Shares climbed by 5.82 percent at HK$30.90 as of 2:30 pm.

Source: The Standard June 09, 2020 07:18 UTC