It is not easy to come back from a scandal involving sick infants; nor should it be. When Chinese milk producer Sanlu was caught selling product doctored with melamine in 2008, China’s entire dairy industry was tainted.

Seven years on and it is recovering — after considerable effort. Full-year results from Mengniu, one of the last brand s standing, might finally point to the future. After Wednesday’s close it said 2014 revenues were up 15 per cent and net profit up two-fifths, beating forecasts by more than a tenth. Growth in higher margin yoghurt and health drinks contributed to the beat. On Thursday, the stock rose 10 per cent.

Product mix has improved, but there is more to it than that, namely operational improvement. Mengniu has been consolidating its supply chain to ensure quality control. By the end of last year, 96 per cent of its domestic raw milk supply came from larger-scale farms, up from 70 per cent in 2010. It has also built economies of scale elsewhere, lifting asset utilisation in its chilled product line with a simplified offering. Expertise from Danone of France (with 10 per cent of Mengniu) and Denmark’s Arla (5 per cent) have helped. Mengniu has also been lucky. Falling raw milk prices caused by a supply glut have boosted margins more than discounting hit revenues.