We estimate that Mengniu achieved strong revenue growth of over 20% yoy in 1Q21, with a two-year revenue CAGR since 1Q19 of over 10% yoy. The cost pressure from the rising raw milk price was more serious in 1Q21, but Mengniu will mitigate the risk through a mix upgrade and promotion reduction; the OPM expansion guidance for FY21F remains unchanged. Reiterate Add with an unchanged DCF-based TP of HK$50.8.
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