China Mengniu Dairy Co., has posted a net profit rise of 28.7% year-on-year as a result of rising demand for dairy products in the country.

Net profit rose to CNY936m (US$134m) from CNY727m for the period ended 31 December 2007, while the company saw an increase in revenue of 31.2% from CNY21.318bn from CYN16.246.

Liquid milk products accounted for CYN19.15bn of revenue, up 34.3% from a year earlier.

The increase in revenue was attributed to the group developing more value-added products and efficient marketing strategies.

However, operating expenses rose 17.8% to CYN3.78 as selling and distribution costs rose 37.5%.

The Chinese dairy giant said it will seek strategic alliances with international companies.

Shares for the company were down 1.12% at midday close.