Investment Rating - The industry investment rating is optimistic [1] Core Viewpoints - The beef import market is characterized by high concentration, dominated by South America and growing imports from Australia [4][18] - In the first half of 2025, China's beef imports are expected to decline in volume but increase in price, with a total import of 1.3 million tons, a year-on-year decrease of 9.5% and an average price of 18.39 yuan per jin, an increase of 8.4% [4][40] - Import policies are tightening, with increased tariffs and stricter qualification requirements for importers, particularly affecting U.S. beef imports [4][59] Summary by Sections 1. Major Beef Import Countries - The top six countries accounted for over 93% of total beef imports in 2023-2025H1, with Brazil leading at 46%, followed by Argentina and Australia [4][14] - Australia has become the third-largest beef supplier to China, benefiting from the China-Australia Free Trade Agreement and U.S.-China trade tensions [4][26] 2. Changes in Beef Imports - In the first half of 2025, China's beef imports are projected to decrease in volume while prices rise, reflecting a tightening supply from overseas and an upgrade in domestic consumption [4][40] - The average price of imported beef has increased due to tightening global supply, reducing the price advantage of imported beef over domestic products [4][42] 3. Investment Recommendations - With the expected decline in import volumes and tightening import policies, domestic beef prices are likely to rise, benefiting high-quality livestock companies [4][59] - Companies such as YouRan MuYe, Modern MuYe, and China Shengmu are recommended for their potential to capitalize on rising beef prices [4][59]

Investment Rating - The report maintains a "Positive" investment rating, emphasizing the resilience of leading companies and the valuation recovery opportunities in the livestock and restaurant chains [5]. Core Insights - The report highlights that national beer companies have shown stable revenue and profit performance, while regional companies exhibit better elasticity in performance. The cost decline has contributed to gross profit growth, and the improvement in expense ratios is gradually releasing profitability [5][24]. - In the snack food sector, the report notes a divergence in channel performance, with emerging channels like bulk snacks and membership supermarkets maintaining high momentum, while traditional channels face challenges. The focus is shifting from revenue growth to profitability logic [25]. - The restaurant chain sector is experiencing a bottoming out of fundamentals and sentiment, with a gradual recovery expected as policies adjust and consumption peaks approach. The report suggests focusing on undervalued companies like Haidilao and Guangzhou Restaurant [29][31]. - The livestock sector is anticipated to see a fundamental reversal as raw milk prices stabilize and beef prices rise, which could significantly enhance profitability for companies like China Shengmu [36][45]. Summary by Sections Beer - National beer companies have demonstrated operational resilience, with stable revenue growth driven primarily by volume recovery. Regional companies like Yanjing and Zhujiang Beer have shown stronger revenue performance [12][13]. - Cost improvements from raw material price declines and stable pricing have driven gross margin increases for beer companies. The report anticipates continued upward potential in the beer sector as terminal demand gradually recovers [18][24]. Snack Foods - The snack food sector is characterized by a split in channel performance, with new channels like bulk snacks and membership supermarkets thriving, while traditional channels face challenges. The report emphasizes the importance of profitability over revenue growth moving forward [25][26]. - Companies like Wancheng Group and Yuyuan Foods are highlighted for their strong performance in emerging channels, while others are advised to focus on cost optimization to enhance profitability [25][26]. Restaurant Chains - The restaurant sector has been under pressure due to policies and competition, but a recovery is expected as restrictions ease and consumption peaks. The report suggests focusing on companies with low valuations and potential for recovery, such as Haidilao and Green Tea Group [29][31]. - The report notes that the overall restaurant revenue for H1 2025 was 2.75 trillion yuan, reflecting a 4.3% increase, but with high-end dining facing significant challenges [29][30]. Livestock - The livestock sector is expected to see a turnaround as raw milk prices stabilize and beef prices rise, which could significantly enhance profitability for companies like China Shengmu. The report indicates that the most challenging phase for livestock companies may be over [36][45]. - The report highlights that the decline in raw milk prices has pressured revenue, but a stabilization is anticipated, which could improve the valuation of biological assets and overall profitability [36][38].

Core Viewpoint - Modern Dairy experienced a decline in revenue and increased losses in the first half of 2025, primarily due to significant losses from the fair value changes of biological assets, while maintaining stable core profitability through effective cost control [1][2]. Financial Performance - In the first half of 2025, Modern Dairy reported revenue of 6.073 billion yuan, a year-on-year decrease of 5.4%. The net profit attributable to shareholders was a loss of 0.913 billion yuan, compared to a loss of 0.228 billion yuan in the same period last year [1]. - Cash EBITDA was 1.477 billion yuan, showing a slight decline of 2.5% year-on-year, while net cash generated from operating activities increased by 23.3% to 0.490 billion yuan [1]. Business Segments - Revenue from raw milk business was 5.069 billion yuan, a minor decrease of 0.8%. Revenue from comprehensive breeding solutions (feed, digital platforms, etc.) was 1.004 billion yuan, down 23.2%, due to a strategic shift towards high-quality customers [1]. - The average selling price of raw milk decreased by 10.1% to 3.29 yuan/kg, which was less than the industry average decline of 11.66%. Total raw milk sales volume increased by 10.3% to 1.542 million tons, mitigating some revenue loss from price declines [1]. Cost Management - The average unit cost of milk decreased to 2.32 yuan/kg from 2.58 yuan/kg in the previous year, with feed costs dropping significantly from 2.02 yuan/kg to 1.79 yuan/kg, a reduction of 11.4% [1]. - The gross margin for raw milk business remained stable at 30.2%, nearly unchanged from 30.3% in the previous year, demonstrating effective cost control despite falling milk prices [1]. Herd Optimization - The first half of 2025 saw a significant loss of 1.823 billion yuan due to fair value changes in biological assets, linked to the company's strategy of eliminating low-yield cows, which is expected to enhance long-term profitability [2]. - The proportion of lactating cows in the herd increased by 3.5 percentage points to 54.1%, and the average annual yield per lactating cow rose to 13.2 tons, a year-on-year increase of 1.5% [2]. Market Outlook - The dairy industry is currently at a historical low point in the raw milk cycle, with performance reflecting the pressures of low milk prices. However, the company may benefit from the dual-cycle resonance of milk and beef prices as the latter begins to rise [2]. - As the industry undergoes capacity reduction and raw milk prices stabilize, there is potential for profit improvement in the second half of 2025 [2].

Investment Rating - The report maintains a "Buy" rating for the company [9] Core Views - The current industry is at the historical bottom of the raw milk cycle, and the company's performance reflects the pressure from low milk prices. The company's earnings elasticity may come from the resonance of the "milk and meat" dual cycles, as the price of culled cattle (beef cattle) has entered an upward cycle, thereby reducing impairment losses on biological assets. With the industry's capacity reduction and the bottoming out of raw milk prices, the company is expected to see profit improvement in the second half of 2025 [2][8]. Summary by Relevant Sections Financial Performance - In the first half of 2025, the company achieved revenue of 6.073 billion yuan, a year-on-year decrease of 5.4%. The net profit attributable to shareholders recorded a loss of 913 million yuan, compared to a loss of 228 million yuan in the same period last year. The loss pressure mainly came from the fair value changes of dairy cows, which resulted in a loss of 1.823 billion yuan, an increase of 58.4% year-on-year. The cash EBITDA was 1.477 billion yuan, a slight decrease of 2.5% year-on-year, while the net cash generated from operating activities was 490 million yuan, a year-on-year increase of 23.3% [4][5]. Raw Milk Business - The raw milk business revenue was 5.069 billion yuan, a slight decrease of 0.8% year-on-year. The comprehensive breeding solution business (feed, digital platform, etc.) revenue was 1.004 billion yuan, a year-on-year decrease of 23.2%, mainly due to the company's proactive adjustment of sales strategy to control risks and focus on high-quality customers [5]. Cost Control and Efficiency - During the industry's price decline, the company's raw milk business demonstrated strong operational resilience. The average selling price of raw milk decreased by 10.1% to 3.29 yuan/kg, which is lower than the industry average decline of 11.66%. Benefiting from the expansion of herd size and improved yield efficiency, the total sales volume of raw milk increased by 10.3% to 1.542 million tons, offsetting some of the revenue decline due to price drops. The average unit cost of milk decreased to 2.32 yuan/kg (from 2.58 yuan in the same period last year), with core feed costs significantly reduced by 11.4% to 1.79 yuan/kg. The company's excellent cost control allowed the raw milk business gross margin to remain stable at a high level of 30.2%, compared to 30.3% in the same period last year [6]. Herd Structure Optimization - The pressure on the company's performance in the first half of 2025 was mainly due to the loss of 1.823 billion yuan from the fair value changes of biological assets, which is related to the company's proactive culling of low-yield and inefficient cattle and the reduction in cattle valuation. This short-term impact on the profit statement lays a solid foundation for long-term development. The herd structure has improved, with the proportion of dairy cows in the total herd increasing by 3.5 percentage points to 54.1%, leading to higher production efficiency. The average annual yield per dairy cow reached a record high of 13.2 tons, a year-on-year increase of 1.5% [7]. Market Outlook - The current industry is at the historical bottom of the raw milk cycle, and the company's performance reflects the pressure from low milk prices. The company's earnings elasticity may come from the resonance of the "milk and meat" dual cycles, as the price of culled cattle (beef cattle) has entered an upward cycle, thereby reducing impairment losses on biological assets. With the industry's capacity reduction and the bottoming out of raw milk prices, the company is expected to see profit improvement in the second half of 2025 [2][8].

Group 1 - The article highlights the transition of seasons, specifically the arrival of the "Bailu" solar term, which marks the end of early autumn and the beginning of mid-autumn, indicating a change in weather and agricultural practices [1] - Modern Dairy's Wuzhong Farm, established in July 2012, is located in Ningxia's "golden milk source belt," benefiting from ample sunlight and a dry climate conducive to grass growth and dairy farming [3] - The farm employs advanced technologies such as automatic feeding systems, temperature-controlled barns, and smart milking equipment, significantly enhancing production efficiency [3] Group 2 - Precision feeding and health management are emphasized through real-time monitoring of cow data, utilizing production management software and techniques for resource recycling, creating a closed-loop system for breeding, farming, and environmental protection [5] - Each cow is equipped with an electronic ear tag to track growth, enabling detailed management throughout its lifecycle, while the farm explores market-oriented operations for manure collection and processing [5] - As the weather cools, cows enter a comfortable period, improving their feeding state, and the farm initiates preparations for next year's feed supply, ensuring adequate nutrition for the dairy herd [5][7] Group 3 - The farm integrates technology with nature, blending traditional farming practices with modern management to create a harmonious agricultural ecosystem [8]

Summary of Modern Dairy's Conference Call Company Overview - **Company**: Modern Dairy - **Industry**: Dairy Farming Key Points and Arguments Industry and Company Performance - As of June 2025, the dairy herd size was 472,000 heads, a decrease of 19,000 heads from the end of 2024, but the proportion of lactating cows increased to 54.1% [2][5] - Raw milk production reached 1.66 million tons in the first half of 2025, a year-on-year increase of 14.6% [2][5] - The average yield per cow in traditional agriculture was 13.2 tons, up 1.5% year-on-year [2][5] - Revenue for the first half of 2025 was RMB 6.073 billion, with cash EBITDA at RMB 1.477 billion, a slight decrease of 2.5% year-on-year [3][31] Cost Management and Financials - Feed costs decreased by 11.4% year-on-year to RMB 1.79 per kilogram, while other cash costs fell by 6.8% to RMB 0.4 per kilogram [2][5] - The gross margin for raw milk remained around 30% [2][5] - Operating cash flow increased by 23% year-on-year to over RMB 400 million [6] - Capital expenditures decreased by over 16% to approximately RMB 1 billion [6] Market Outlook - The company anticipates continued pressure in the market for the fall and fourth quarter of 2025, with a potential market turning point in 2026 [4][9] - The dairy herd is expected to drop below 6 million heads in 2025, continuing to decline to about 5.8 million heads in the second half of the year [4][9] - The price of raw milk is projected to rise to RMB 3.3-3.5 per kilogram, with the company potentially reaching RMB 4 per kilogram [13] Specialty Milk and Product Development - The company operates five organic dairy farms with over 40,000 heads, and the proportion of specialty milk reached 8%, expected to exceed 10% by 2027 [6] - The company has secured 20%-30% of its soybean meal supply for the next year at a price lower by RMB 200-300 per ton compared to this year [4][23] Supply Chain and Import Dynamics - Domestic bulk powder prices are significantly lower than imported prices, leading to a decrease in import volumes [11] - The construction of new processing plants is expected to increase the demand for fresh milk [12] Challenges and Risks - The company faces challenges from heat stress affecting milk production and fluctuating market demands during peak seasons [7][8] - The elimination of dairy cows, particularly heifers, is a concern, with 210,000 heads culled in the first seven months of the year, impacting future supply [14][15] Future Projections - The company plans to maintain its herd size around 472,000 heads in the coming years, focusing on improving the proportion of lactating cows to enhance financial performance [20] - The expected yield per cow is projected to increase from 12.8 tons last year to over 13 tons this year [19] Conclusion - Modern Dairy is actively managing its herd size and costs while navigating market pressures and supply chain challenges. The focus on specialty milk and cost control measures positions the company for potential growth despite the current market volatility.

Core Insights - The overall domestic dairy industry is under significant pressure, with over 60% of companies experiencing a decline in revenue year-on-year, while net profits show mixed results [1][2] Group 1: Financial Performance - The 28 listed dairy companies achieved a total revenue of 190.15 billion yuan, a year-on-year decrease of 1.05%, and a net profit of 12.40 billion yuan, down 14.83% [2] - Cash flow from operating activities totaled 4.94 billion yuan, down 31.72%, while R&D expenses increased by 14.99% to 0.70 billion yuan [2] - Five companies reported revenues exceeding 10 billion yuan, with Yili and Mengniu dominating the market, accounting for 54% of total revenue and 74.6% of net profit among the 28 companies [2] Group 2: Trends and Challenges - Among the 28 companies, 17 reported a decline in revenue, with only 2 companies achieving over 10% growth [3] - The industry faces challenges such as supply-demand imbalances and changes in consumer demand and retail channels, prompting companies to innovate and optimize product structures [3][4] - Yili's liquid milk business saw an 11.22% revenue decline, while other segments like ice cream and cheese experienced double-digit growth [3] Group 3: Raw Milk Sector - The raw milk sector remains in a loss adjustment phase, but leading companies are showing resilience through cost control and strategic adjustments [5][6] - Modern Dairy maintained stable cash flow with a 23.3% increase in net cash flow, while costs for milk sales and feed decreased by 10.1% and 11.4%, respectively [5] - China Shengmu Organic Milk's revenue fell by 3.11%, but losses narrowed by 66.37% due to a focus on organic milk and cost reduction strategies [5] Group 4: Product Segments - The milk powder segment showed signs of recovery, with Yili's milk powder and dairy products revenue increasing by 14.26% [7] - Mengniu's milk powder revenue grew slightly, while H&H International's baby nutrition business reported 2.5 billion yuan in revenue, marking a strong performance [7] - The ice cream market thrived due to high temperatures, with Mengniu's ice cream revenue growing by 15% and Yili leading the market with 8.23 billion yuan in revenue [8] Group 5: Future Outlook - The dairy industry is expected to see a recovery trend, with leading companies leveraging full-chain layouts and technological innovations to stabilize their positions [8] - Analysts suggest that companies need to balance value cultivation and differentiated competition to build long-term competitiveness in changing consumer landscapes [8]

FF301 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 01117 | 說明 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | 法定/註冊股本 | | | 上月底結存 | | | 10,000,000,000 | HKD | | 0.1 HKD | | 1,000,000,000 | | 增加 / 減少 (-) | | | | | | HKD | | | | 本月底結存 | | | 10,000,000,000 | HKD | | 0.1 HKD | | 1,000,000,000 | 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年8月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 中國現代牧業控股有限公司(於開曼群島註冊成立的有限公司) 呈交日期: 2025年9月1 ...

Core Viewpoint - The company's 1H25 performance aligns with expectations, showing a decline in revenue and an increase in losses compared to the previous year, but with improvements in production metrics and cash EBITDA margin [1][2]. Financial Performance - Revenue for 1H25 was 6.073 billion yuan, down 5.4% year-on-year; net profit attributable to shareholders was a loss of 0.913 billion yuan, compared to a loss of 0.228 billion yuan in the same period last year; cash EBITDA was 1.477 billion yuan, down 2.5% year-on-year [1]. - The company's gross margin improved by 0.3 percentage points to 26.4% in 1H25, while the raw milk gross margin decreased by 0.1 percentage points to 30.2% due to weak market demand [2]. - The cost of milk sales per kilogram decreased by 10.1% year-on-year, with feed costs down 11.4% due to improved production and strategic adjustments [2]. Production and Market Trends - The company saw a 1.5% year-on-year increase in milk yield per cow to 13.2 tons, with a herd size of 472,000 heads, up 6.2% year-on-year [1]. - Raw milk production increased by 14.6% year-on-year, with specialty milk production exceeding 130,000 tons, up 67% year-on-year [1]. - The industry continues to experience an oversupply, with raw milk prices down 11.7% year-on-year, while the company's milk prices fell by 10.1%, outperforming the industry [1]. Future Outlook - The industry is expected to continue its contraction, with a projected decrease in the national dairy cow population by approximately 160,000 heads by the end of 1H25 [3]. - The company anticipates a slight decrease in dairy cow numbers in the second half of the year, with continued improvements in yield and total production growth in the mid-to-high single digits [3]. - An upward trend in beef prices is expected to mitigate losses from culling cows, positively impacting fair value changes and net profit [3]. Profit Forecast and Valuation - The profit forecast for 2025 and 2026 has been revised down by 410% and 52% to losses of 0.97 billion yuan and profits of 0.36 billion yuan, respectively [3]. - The current trading is at 26 times the 2026 P/E ratio, with a target price of 1.43 HKD, corresponding to 28 times the 2026 P/E and an 8% upside potential, maintaining an outperform rating [3].

Core Viewpoint - The dairy market is experiencing a prolonged downturn, with leading companies like Mengniu reporting declining revenues and facing challenges in recovering from the low milk price cycle that began in 2021 [2][6]. Group 1: Financial Performance - Mengniu's revenue for the first half of 2025 was 41.57 billion yuan, a year-on-year decrease of 6.9%, with both sales volume and average prices showing low single-digit declines [2]. - The liquid milk segment, which constitutes a significant portion of Mengniu's revenue, saw a revenue drop of over 10% to 32.1917 billion yuan, reducing its share of total revenue from 81.2% to 77.4% [3]. - The net profit attributable to shareholders decreased by 16.4% to 2.0455 billion yuan, influenced by losses from its joint venture, Modern Dairy, which reported a net loss of 913.5 million yuan [4]. Group 2: Market Dynamics - The dairy industry is currently facing an oversupply of raw milk and slower-than-expected demand recovery, particularly affecting the ambient milk segment [3][6]. - The average price of fresh milk in major producing provinces was 3.02 yuan per kilogram, down 5.6% year-on-year, reflecting a nearly 30% decline from the peak in September 2021 [6]. - The current cycle of low prices is prolonged due to the presence of large-scale farms that can sustain operations during downturns, leading to a slower adjustment in supply [6]. Group 3: Strategic Adjustments - Mengniu is focusing on diversifying its product offerings to mitigate the pressures from the liquid milk market, with ice cream and cheese segments showing significant growth [9]. - The ice cream business generated 3.8785 billion yuan in revenue, up 15% year-on-year, while the cheese segment grew by 12.3% to 2.3739 billion yuan [9]. - The company is also investing in high-value products and expanding its international market presence, with a focus on technological innovation and product diversification [10][11].