Shanghai Milkground Food Tech (SHA: 600882): A Cheese Darkhorse Hit by Peak Cheese Lollipop as Chinese Consumers Tighten Belts

Chinese dairy stock and homegrown cheesemaker Shanghai Milkground Food Tech (SHA: 600882) has been described as a dark horse in China’s cheese product market. However, the Financial Times has recently reported: Goldman Sachs loses taste for China’s cheese lollipops (Demand for flavoured snack expected to weaken as consumers tighten belts, say analysts)


  • Shanghai Milkground Food Tech has 4 factories in China, including Shanghai, Tianjin, Changchun and Jilin, producing all kinds of original and reprocessed cheese products and liquid milk series products. This includes ready-to-eat nutrition series cheese sticks, adult shredded cheese sticks, children’s growing cups, mozzarella cheese, cheese slices, cream cheese, butter, grilled cheese, etc., as well as milk and related products through distributors, self-operated e-commerce channels, large shopping malls, and supermarkets.
  • It introduced its version of the cheese lollipop (“a delight that combines cheese with sweet flavours such as chocolate and banana, is aimed at the under-12s and claims to have solid nutritional value”) and soared to the leading position against rivals YiliMilkana and Dr Cheese.
  • Cheerful growth for cheese and other novel dairy products in China (Shanghai Daily) Dec 2022
    • Local players Mengniu, Yili, He Run and Bright Dairy are among those grabbing the latest trend to diversify packaged dairy products such as cheese sticks and fresh cream cheese.
    • Last month, Mengniu Dairy completed the acquisition of an additional 5 percent stake of Shanghai Milkground Food Tech Co Ltd after becoming its largest stakeholder in previous years.
    • After the 800 million yuan acquisition of about 25.80 million shares of the Shanghai firm, Mengniu holds about 35 percent of the company which specializes in cheese sticks, sliced cheese and other kinds of baking material.
  • If you think China doesn’t like cheese, think again (DAO) Oct 2022
    • Young Chinese consumers are starting to embrace cheese products due partly to the pandemic fanning the appetite for snacking.
    • China’s leading dairy brand Mengniu has cashed in three years in a row with Milkground, a homegrown cheese maker who appears to be a dark horse in the yet untapped market.
    • French cheese expert Kiri is also stepping up to bring its signature cubic cheese snacks to China in an attempt to cater to young snackers’ palates.
  • Goldman Sachs loses taste for China’s cheese lollipops (FT) April 2023
    • Underpinning Goldman analysts’ original optimism was an estimate that, by 2030, mainland China’s per capita cheese consumption would move from 0.18kg per year towards 0.5kg per year, or roughly where Taiwan’s is today — still just a slice of the 17.3kg per year in the French cheese market.
    • In June 2022, Goldman initiated analyst coverage on Milkground with a resounding “buy” recommendation, a punchy 12-month price target and a 40-page thesis on the lucrative trajectory for per capita cheese consumption in the world’s second-biggest economy. Children’s snacking was expected to be the pre-eminent driver of “multiyear cheese market growth”.Less than a year later Goldman has become less bullish.
    • Investors are “underestimating the pace and magnitude of deceleration in cheese penetration”, the bank said this week in a note that cut its recommendation on Milkground to a “sell”. 
  • Note: There is limited information on the English investor relations page while the Chinese one has some financials. Otherwise, Yahoo! Finance & Market Screener pages has financial numbers:
  • P/E (Google Finance): 158.33 / P/E (Yahoo! Finance): 154.29 (no forward P/E)
  • Dividend Yield (Google Finance): n/a / Forward Dividend & Yield (Yahoo! Finance): n/a





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