China Mengniu Dairy Co Ltd announced on Wednesday that its sales increased by 20.4 percent year-on-year to 43.36 billion yuan in 2013, driven by favorable industry policies, product restructuring and an acquisition deal.

Its net profit reached 1.62 billion yuan ($161 million), registering year-on-year growth of 25.2 percent, according to the report.

Last year, China Mengniu Dairy Co Ltd purchased privately owned Yashili International for 11.4 billion yuan, acquiring one of the country's leading manufacturers of baby milk formula and baby food in the largest merger in the domestic dairy industry.

The deal strengthened Mengniu's performance in the milk powder business, in which its market share in total revenue rose from 1.2 percent in 2012 to 5 percent in 2013. Despite significant growth in the milk powder and liquid milk sectors, its ice cream business witnessed a slight fall.