According to Zhitong Finance APP, CLSA issued a research report stating that after exchanging views with executives from dairy companies such as Inner Mongolia Yili Industrial Group Co.,Ltd. (600887.SH), MENGNIU DAIRY (02319), and CH MODERN D (01117) at an annual investor conference, it observed that investors are paying closer attention to the turning point in raw milk prices, leading players regaining market share in liquid milk products, and growth drivers beyond ambient liquid milk products.

CLSA pointed out that both upstream and downstream companies are optimistic about a mild recovery trajectory for raw milk prices over the next two to three years, as well as the development potential of the deep-processing dairy products business. Among them, both Yili and Mengniu expressed confidence that their liquid milk product market share can increase next year.

The firm is bullish on MENGNIU DAIRY and CH MODERN D, assigning them "high conviction outperform" and "outperform" ratings respectively. It expects Mengniu and CH Modern D to benefit more from net profit rebounds during the raw milk upward cycle, and views Yili as a steady choice, also giving it an "outperform" rating.

CLSA currently has target prices of HK$22.9, HK$2, and RMB35 for Mengniu, CH Modern D, and Yili, respectively.