MengniuSuch a deep pullback into a key zone, especially on a higher timeframe, strongly suggests a very probable price increase ahead. I estimate around 40% upside.
The scale of Yili and Mengniu (the duopoly) gives them superior access to capital markets at significantly lower financing costs. Moreover, their purchasing volume allows them to negotiate preferential prices for key inputs, such as livestock feed. This lower cost structure means the duopoly’s breakeven threshold is much lower than that of their competitors, ensuring that—even in an environment of historically low prices—they have the ability to withstand pressure and continue operating profitably while smaller and medium-sized companies become insolvent.
