By Amanda Lee


China Mengniu Dairy shares fell by the most in almost two years after annual profit fell short of expectations.

Shares of Mengniu, one of China's largest dairy companies, were 7.5% lower at 17.50 Hong Kong dollars (US$2.24) in Wednesday morning trade, extending year-to-date losses to 16%. The slide puts the stock on track for its biggest one-day percentage drop since October 2022.

Mengniu said late Tuesday that 2023 net profit fell 9.3% to 4.81 billion yuan (US$666.4 million), partly due to higher expenses, including a write-down of raw material inventories. That was short of a consensus estimate of CNY5.20 billion by a FactSet poll of analysts.

Revenue rose 6.5% to CNY98.62 billion, slightly ahead of expectations, on the back of higher sales in the liquid milk and ice cream segments.

Citi analysts kept a buy rating on Mengniu, highlighting EBIT margin improvement and an "upside surprise" in a higher dividend payout ratio against the profit miss. They have a HK$31.90 target price on the stock.


Write to Amanda Lee at amanda.lee@wsj.com


(END) Dow Jones Newswires

03-27-24 0010ET