China Shengmu Organic Milk Ltd (1432) AI Stock Analysis

• Market Cap: HK$2.68B
• Dividend Yield: 0.72%
• Average Volume (3M): 11.83M
• Price to Earnings (P/E): 80.0
• Beta (1Y): 0.50
• Revenue Growth: -7.11%
• EPS Growth: N/A
• Country: HK
• Employees: 2,217
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Agricultural Farm Products
• EPS (TTM): >-0.01
• Shares Outstanding: 8,381,295,000
• 10 Day Avg. Volume: 7,852,800
• 30 Day Avg. Volume: 11,830,911
• PEG Ratio: 0.11
• Price to Book (P/B): 0.33
• Price to Sales (P/S): 0.42
• P/FCF Ratio: -2.69
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 50 Neutral
• Price Target: HK$0.50 ▲(51.52% Upside)

The overall stock score of 50 reflects significant financial performance challenges, including declining revenue, profitability, and cash flow issues. Technical analysis indicates bearish momentum, and the stock appears overvalued with a high P/E ratio and low dividend yield. These factors collectively suggest caution for potential investors.

China Shengmu Organic Milk Ltd Business Overview & Revenue Model

Company Description

China Shengmu Organic Milk Ltd (1432) is a prominent player in the dairy industry, primarily engaged in the production and distribution of organic milk products in China. The company is renowned for its commitment to sustainable and eco-friendly farming practices, ensuring that its products are of high quality and free from synthetic chemicals. Its core offerings include a wide range of organic dairy products, including fresh milk, yogurt, and other milk derivatives, catering to the growing demand for health-conscious food options in the Chinese market.

How the Company Makes Money

China Shengmu Organic Milk Ltd generates revenue primarily through the sale of its organic dairy products. The company's revenue model is built on its ability to produce high-quality organic milk using its vertically integrated supply chain. This integration allows the company to maintain control over the entire production process, from organic farming to processing and distribution. Key revenue streams include direct sales to retailers, supermarkets, and through its own distribution channels. Additionally, the company may engage in partnerships with other food and beverage companies to expand its market reach and enhance its product offerings. Factors such as the rising consumer awareness about health benefits associated with organic products and the company's strong brand reputation contribute significantly to its earnings.

China Shengmu Organic Milk Ltd Financial Statement Overview

Summary

China Shengmu Organic Milk Ltd is facing challenges with declining revenue, profitability, and cash flow. The income statement reveals negative growth and reduced margins, while the balance sheet remains stable with manageable leverage. However, profitability has decreased as indicated by negative ROE. The cash flow statement reflects significant cash flow issues, posing potential liquidity risks. The company needs to address these areas to improve its financial health and sustainability.

Income Statement

The company experienced a negative revenue growth rate of -7.61% from 2023 to 2024, indicating a decline in sales. Gross profit margin decreased from 30.29% in 2023 to 28.95% in 2024, suggesting reduced efficiency in cost management. The net profit margin turned negative at -2.09% in 2024 from 2.54% in 2023, highlighting profitability challenges. The EBIT margin remained relatively stable at 22.41% in 2024. Overall, the company shows signs of declining performance with shrinking margins and negative growth.

Balance Sheet

The debt-to-equity ratio increased slightly from 0.54 in 2023 to 0.59 in 2024, indicating a moderate rise in leverage but still within a reasonable range. The equity ratio decreased marginally from 47.23% in 2023 to 46.82% in 2024, reflecting a stable balance sheet structure. However, return on equity (ROE) dropped significantly to -1.65% in 2024, suggesting inefficiencies in generating returns on shareholders' equity. Overall, the balance sheet remains stable but shows signs of strain on profitability.

Cash Flow

The company reported zero operating cash flow and free cash flow in 2024, indicating cash flow challenges. The previous year's operating cash flow was positive at 940.28 million, showing a significant decline. The free cash flow to net income ratio was not calculable for 2024 due to zero free cash flow, highlighting potential liquidity concerns. Overall, the cash flow position appears weak, with no clear signs of improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.08B	3.13B	3.38B	3.18B	2.98B	2.66B
Gross Profit	404.19M	925.89M	1.03B	1.01B	1.06B	1.03B
EBITDA	314.51M	809.48M	900.27M	922.50M	997.18M	991.51M
Net Income	29.86M	-65.50M	86.08M	416.46M	471.71M	406.68M
Balance Sheet
Total Assets	8.03B	8.46B	8.52B	7.89B	7.13B	6.73B
Cash, Cash Equivalents and Short-Term Investments	998.49M	697.23M	525.46M	994.08M	579.57M	367.17M
Total Debt	2.30B	2.33B	2.18B	1.85B	1.68B	1.37B
Total Liabilities	3.90B	4.29B	4.28B	3.63B	3.24B	3.31B
Stockholders Equity	3.92B	3.96B	4.02B	4.06B	3.68B	3.20B
Cash Flow
Free Cash Flow	43.64M	-482.21M	-375.46M	126.00M	224.27M	393.57M
Operating Cash Flow	698.60M	916.23M	940.28M	1.12B	1.03B	1.09B
Investing Cash Flow	-431.81M	-966.85M	-1.15B	-1.06B	-1.07B	-267.06M
Financing Cash Flow	-256.52M	86.06M	118.43M	-98.82M	238.32M	-625.45M

China Shengmu Organic Milk Ltd Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.33
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1432, the sentiment is Negative. The current price of 0.33 is below the 20-day moving average (MA) of 0.33, below the 50-day MA of 0.36, and above the 200-day MA of 0.25, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 43.99 is Neutral, neither overbought nor oversold. The STOCH value of 12.04 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1432.

China Shengmu Organic Milk Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
1431	61 Neutral	HK$1.24B	4.02	5.66%	―	13.78%	432.26%
9858	51 Neutral	HK$11.91B	―	-5.81%	―	3.07%	-64.23%
1432	50 Neutral	HK$2.68B	80.00	0.82%	0.72%	-7.11%	―
1117	46 Neutral	HK$9.47B	―	-21.76%	1.10%	-2.69%	-695.87%

China Shengmu Organic Milk Ltd Corporate Events

China Shengmu Organic Milk Ltd Announces Board Changes

China Shengmu Organic Milk Ltd announced a significant change in its board composition, with the resignation of Mr. Zhao Jiejun due to personal health reasons and the appointment of Mr. Bai Fengming as a non-executive director. Mr. Bai brings extensive experience from the Mengniu Group, where he has demonstrated strong leadership and innovative sales strategies in the dairy sector. This strategic appointment is expected to enhance the company’s market positioning and operational effectiveness.

The most recent analyst rating on (HK:1432) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on China Shengmu Organic Milk Ltd stock, see the HK:1432 Stock Forecast page.

China Shengmu Organic Milk Updates Board of Directors

China Shengmu Organic Milk Limited has announced an update to its board of directors, effective October 6, 2025. The company, incorporated in the Cayman Islands, operates within the dairy industry, focusing on organic milk production. The new board structure includes executive directors, non-executive directors, and independent non-executive directors, with specific roles assigned within four board committees: Audit, Remuneration, Nomination, and Strategy and Sustainability. This restructuring is expected to enhance the company’s governance and strategic direction, potentially impacting its market positioning and stakeholder relations.

The most recent analyst rating on (HK:1432) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on China Shengmu Organic Milk Ltd stock, see the HK:1432 Stock Forecast page.

China Shengmu Organic Milk Ltd Reports Mixed Interim Results for 2025

China Shengmu Organic Milk Ltd reported its interim results for the six months ended June 30, 2025, showing a 5.3% increase in operating income but a 3.1% decline in revenue compared to the previous year. Despite a significant reduction in losses attributable to the parent company by 66.4%, the company did not recommend an interim dividend. The results highlight a challenging period with reduced gross profit and revenue, but improved cash EBITDA and cost efficiency, indicating a mixed impact on its operations and market positioning.

The most recent analyst rating on (HK:1432) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on China Shengmu Organic Milk Ltd stock, see the HK:1432 Stock Forecast page.

China Shengmu Organic Milk Ltd Signs New Milk Powder Purchase Agreement

China Shengmu Organic Milk Ltd has entered into a new framework agreement with Yiyingmei Dairy to purchase milk powder, anticipating increased demand. This agreement, effective from August 2025 to December 2026, is part of the company’s strategy to secure a steady supply of milk powder and involves continuing connected transactions under Hong Kong’s Listing Rules.

The most recent analyst rating on (HK:1432) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on China Shengmu Organic Milk Ltd stock, see the HK:1432 Stock Forecast page.

China Shengmu Organic Milk Schedules Board Meeting for Financial Review

China Shengmu Organic Milk Limited has announced a board meeting scheduled for August 27, 2025, to approve the unaudited consolidated financial statements for the first half of 2025 and consider an interim dividend. This meeting could impact the company’s financial transparency and shareholder returns, potentially influencing its market position and stakeholder confidence.

China Shengmu Organic Milk Ltd Receives Favorable Court Ruling in Investment Litigation

China Shengmu Organic Milk Ltd announced an update on its ongoing litigation related to an Investment Agreement. The Appeal Court has issued a final judgment, significantly reducing the sum awarded to the plaintiff compared to the initial judgment, which is seen as favorable for Shengmu High-tech. The company is required to pay a sum of RMB20,272,362 along with accrued interest and legal fees. The company’s frozen assets will be released once the payment is settled, and a provision of RMB85 million was made for probable losses related to this litigation.