Deutsche Bank has downgraded China Mengniu Dairy  from "Buy" to "Hold" with target price slashed from HK$31.5 to HK$22.6.

Deutsche Bank believes that China Mengniu's near-term earnings growth momentum will likely be affected by the new carcinogen-tainted pure milk in its Meishan factory. Separately, as one of the outperformers year-to-date, this is an excuse for investors to lock in profit on the stock, the brokerage firm says.

Deutsche Bank believes that this incident is not as serious as the melamine crisis in 2008.

Overall, the brokerage firm cut the company's 2012-13 net profit forecasts by 6-7%.