Mengniu adjusted sales pricing for its high-end products and yogurt in October last year but Wu said the impact of that price review on annual revenue was less than 2 per cent.

He said the firm this year would try to maintain its gross profit margin but would consider increasing prices if the margin fell short of the target.

'We will closely follow the market behaviour of both the raw material and our products and decide if prices should be adjusted.' He said Beijing had not issued any order this year barring dairy enterprises from raising prices, which it did temporarily last year to check runaway inflation.

Wu said the ratio of products with high added value accounted for about 22 per cent in the company's products line, and Mengniu aimed to increase it by 1 to 2 per cent every year in the following years.

'We will have more products catering for children and the elderly - two markets with big potential.'

Mengniu plans to invest up to 1.7 billion yuan (HK$2.02 billion) this year to expand productivity. Wu said the company's dairy product volume stood at 6.5 million tonnes last year and would be raised to between seven million and 7.2 million tonnes this year. Liquid milk was the firm's main revenue generator, contributing 88.8 per cent.

The company will also pump 200 million to 300 million yuan into enlarging a pool of milk sources, on which it spent 700 million yuan last year. As part of this drive, it invested in large-scale ranches and modernised facilities.

Wu said the company had no plans to raise funds as it had a comfortable net cash flow of 2.5 billion yuan at the end of last year, 350 million yuan more than a year ago.

Net profit for the year rose 10.9 per cent to 1.24 billion yuan and revenue grew 17.7 per cent to 30.27 billion yuan.

Mengniu has a five-year plan, under which it aims to become one of the world's top 10 dairy firms in five years with annual revenue of 50 billion yuan.

Mengniu declared a final dividend of 16 fen per share, 13 per cent higher than a year earlier.