Deals
China Dairy Giants Shake Off Scandal to Become Blue Chips
- Shares at record high, Yili still trading at discount to peers
- Dairy duopoly has pushed profit margins past 30% threshold
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A decade after Chinese dairy companies were roiled by a scandal that poisoned thousands of children, investors are seeing the biggest players as safe bets.
Inner Mongolia Yili Industrial Group Co. and China Mengniu Dairy Co. have soared to all-time highs as the companies hunt aggressively to build up their milk supply chains through foreign acquisition. Also underpinning the bullishness is the virtual duopoly’s rosy earnings prospects amid a shift to more profitable segments like premium yogurt and infant formula.