by DMG & PARTNERS SECURITIES (3 Dec)
IN November, the Chinese government overhauled the entire dairy industry to improve safety at every step of the value chain. From cow breeding to the end product that customers consume.
We believe that China Milk is going to benefit from this because they have extremely high quality standards and supervision at every stage of the value chain.
China Milk feeds its herd the best quality feed, which it grows itself. The fertiliser used to grow the animal feed is also from its own herd. This insures that there are no dangerous chemicals being added to the crops. In our view, we believe that the Chinese government should base quality standards using China Milk as an example.
The exposure of many problems existing in quality control and supervision of the industry has dampened China's global reputation. However, we believe that the rebuilding process of its dairy industry will only make China's dairy sector more attractive in the long term.
-Research Report by DMG & PARTNERS SECURITIES (3 Dec)
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