20150623-HSBC-辉山乳业（6863）：HOLD，FY15_RESULTS_FIRST_TAKE-744149

What’s new？FY15（YE：March）core net profit was down 29% yoy to RMB906m，which was at the high-end of its profit warning issued on 12 June 2015.Total revenue was up 11% yoy to RMB3，923m，which was mainly driven by the liquid milk and milk powder businesses.The group’s gross margin was down 4.8ppt yoy to 57.6%，mainly due to operational deleverage as a result of falling raw milk prices.Despite the decline in gross margin，the EBIT margin was down 10.6ppt yoy to 32.9% and net margin also dropped by 13ppt yoy to 23.1% on the back of higher A&P，admin，and finance expenses.As at end- March 2015，the company had net debt of RMB4.9bn and net gearing of 36%.The company recommended a final DPS of RMB1.53cents，representing a payout of 24% on reported earnings（FY14：24%）.