High growth or sustainable development of the Royal dairy industry for more than 5 years

We believe that the emperor's milk Industry (002329) as a regional dairy faucet, with unique products and stable consumer groups, the future development of water and milk will be its main driving force from the region to the country, the company is expected to usher in the outbreak of growth in the next years. At the same time, taking into account the company's development of pasteurized milk, room temperature milk market expansion and fruit milk consumption group cultivation of basic maturity, is speeding up the construction of investment projects, new Tetra Lok packaging production line is likely to be put into production recently, it is expected that the company's high growth sustainability at least 5 years　　The forecast company 2010-2012 EPS is 0.66 yuan, 1.02 yuan and 1.58 yuan respectively, raise the company rating to "strongly recommend". July 15, the company issued interim results of 2010 revision of the announcement: As a result of the first half of sales revenue growth and received subsidies income increase, resulting in year-on-year growth from a quarterly increase of not more than 30% to 30%-50%.　　2009 the same period net profit of about 20.4566 million yuan, according to the IPO before the total share capital 80 million shares calculated EPS for 0.26 yuan. According to the company's public disclosure information and our investigation, the company's black and white milk and milk in the first half of the production and sales are limited by the capacity limit has not been significantly increased, and raw milk prices lead to end product prices may be the main driving factor. In addition, the company as a cow-breeding agricultural enterprises enjoy the policy support that is, subsidies and special subsidies are more normal, we expect the first half of the year, the subsidy has a larger increase, may be more than 5 million yuan, thereby contributing to performance growth, the company is expected to have a net profit of about 30 million yuan　　Equivalent to EPS0.28 yuan.　　The deep reason of the performance exceeding anticipate growth is the company two kinds of milk are excellent quality, much better than many milk enterprises, in line with the healthy economic development direction, is the consumer upgrades the demand for a large growth of the typical beneficiaries, in short supply and sales growth is logical.　　In addition, the company's products of high quality and short supply also with the company's differentiated strategy-the main push pasteurized milk has a close relationship, so that other enterprises are difficult to match the competitive advantage. Company's product differentiation mainly manifested in the positioning of pasteurized milk and characteristics of water milk. Pasteurized milk is well nourished but has a shorter shelf-length and does not facilitate long-distance transportation. Because pasteurized milk is not easy to store with a small sales radius of characteristics, make the company do a good job of pasteurized milk can avoid with Yili, Mengniu and other companies of the positive competition, but also to ensure and expand the company in the region of urban and remote county sales, and continuously expand the other second-tier cities in Guangxi, the development of pasteurized milk,　　At the same time will be at different prices at room temperature milk as a supplement, covering the region more remote, not easy to cold chain preservation and transport of rural areas.　　In addition, Guangxi has a unique tropical fruit resources, fruit milk will also be the company's characteristics of the development of products, fruit milk is still in the promotion stage, but with rich fruit resources, papaya, banana and other fruit milk varieties have cost advantages, once the promotion of the meeting has very good results. Another important bright spot of the company's product differentiation strategy is that the new growth point is water milk, which is likely to be from the second half of 2011 orThere is a jump in the growth situation later. At present, the buffalo milk source accounts for about 80% of Guangxi, according to the concept of insured purchase and variety improvement, It takes about 8.5 years to calculate the two-generation improvement, in the second half of 2011 or later, the number of milk cows in Guangxi will increase rapidly, because of the improved buffalo individual and milk production has increased significantly, each cow from an annual output of less than 1 tons to 3 tons, and better quality. According to the analysis, the nutritional value of water milk is much higher than black and white milk, its milk fat, protein and dry matter content of 7.5%, 5% and 18%, is the black and white flower milk twice times, 1.6 times times and 1.5 times times.　　The company's milk in the next 1-3 years will increase by leaps and bounds, for the company to do large water milk laid a strong foundation. The company differentiation strategy also embodies in the direct sales and distribution mode to create new marketing features. The company's milk to direct sales, mainly to send milk station bottled delivery, to promote the "fresh milk on the doorstep" and win the region more stable market, the share of competitors far behind. Normal temperature milk to distribution-oriented, through the flat sales leading cold chain imperfect areas, has been carried out in various districts in the district; fruit milk and water milk are still in the incubation and development stage, considering that consumer awareness needs a process, the company currently water milk and fruit milk also participate in such as "mobile integral milk" activities,　　Cultivate consumption habits through contact with institutions; In the terminal, the company at the beginning of the development through the restaurant terminal to intercept the establishment of high-end brand image, the future of this positioning and marketing model will be strengthened. It is noteworthy that the future of the company may be in Beijing, Shanghai, Guangzhou and Shenzhen Four first-tier cities to carry out the marketing of water milk, do not rule out the 2011 and after the beginning of the emergence of water milk single business rapid growth of the possibility.