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]

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: 中國優然牧業集團有限公司 呈交日期: 2025年9月1日 I. 法定/註冊股本變動 II. 已發行股份及/或庫存股份變動 | 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) | 09858 | 說明 | | | | | | | | | | 已發行股份（不包括庫存股份）數目 | | | 庫存股份數目 | | 已發行股份總數 | | | 上月底結存 | | | | 3,892,727,833 | | 0 | | 3,892,727,833 | | 增加 / 減少 (-) | | | | | | | | | | 本月底結存 | | | | 3,892,727,833 | | 0 | | 3,892,727,833 | 第 2 頁 共 10 頁 v 1 ...

Investment Rating - The report maintains an "Outperform" rating for China Youran Dairy [1][16] Core Views - The company is expected to benefit from an upcoming reversal in raw milk prices, entering a cycle of simultaneous growth in both volume and price [3][11][14] - The company has shown improved profitability, with a reduction in net losses and an increase in gross profit margin [10][12] - Cost control measures have been effective, leading to a significant rise in gross profit margin for the raw milk segment [12][13] Financial Performance - In H1 2025, the company achieved revenue of RMB 10.28 billion, a year-on-year increase of 2.3%, with a gross profit margin of 30.0% [10][11] - The net loss attributable to shareholders was reduced to RMB 297 million, reflecting a 10% year-on-year decrease in losses [10][11] - The company forecasts revenues of RMB 21.03 billion, RMB 23.16 billion, and RMB 25.55 billion for 2025, 2026, and 2027 respectively [15][16] Market Dynamics - The raw milk segment's revenue in H1 2025 was RMB 7.896 billion, with a sales volume increase of 15.8% year-on-year [11][14] - The current raw milk price has stabilized in the range of RMB 3.00 - 3.10 per kilogram, indicating a bottom consolidation phase [11][12] - The national dairy cattle inventory has decreased by 4.2% year-on-year, which is expected to support price recovery in the industry [14] Cost Management - Feeding costs decreased by 12% year-on-year to RMB 1.91 per kilogram, contributing to a lower unit cost of RMB 2.53 per kilogram [12][13] - The gross profit margin for the raw milk segment increased to 34.7%, demonstrating the company's operational efficiency [12][13] Capital Expenditure and Financial Resilience - Capital expenditures have declined, with significant reductions in spending on properties and biological assets [13] - The company reported a positive free cash flow and a decrease in interest-bearing liabilities to RMB 23.5 billion, enhancing financial resilience [13]

Investment Rating - The report assigns an "Outperform" rating to several companies including China Feihe, Huazhu, and others, while Budweiser APAC is rated as "Neutral" [1]. Core Insights - The report indicates a slight rebound in spot costs for essential consumer goods, with most indices showing an increase, while futures indices generally declined [35]. - The overall trend in the consumer goods sector reflects a mixed performance, with some categories experiencing cost increases while others face declines [8][35]. Summary by Category Beer - The spot cost index for beer increased by 0.39% month-on-month, while the futures index decreased by 6.06%. Year-to-date changes show a decline of 4.17% for spot and 6.16% for futures [36][13]. - Glass prices initially rose but later fell, with month-on-month changes of +0.3% for spot and -13.9% for futures [12]. Seasonings - The spot cost index for seasonings decreased by 0.16% month-on-month, while the futures index fell by 5.93%. Year-to-date changes are -1.76% for spot and -6.01% for futures [37]. - Domestic soybean prices have increased due to supply contraction, while imported soybeans remain weak [16]. Dairy - The spot cost index for dairy products increased by 0.7% month-on-month, while the futures index decreased by 1.44%. Year-to-date changes are -3.2% for spot and -2.11% for futures [38]. - Fresh milk prices have declined to 3.02 yuan/kg, with various factors contributing to price pressures [19]. Instant Noodles - The spot cost index for instant noodles increased by 1.3% month-on-month, while the futures index decreased by 2%. Year-to-date changes are -3.01% for spot and -4.21% for futures [39]. - Palm oil prices have risen, impacting overall costs [23]. Frozen Foods - The spot cost index for frozen foods increased by 1.15% month-on-month, while the futures index rose by 0.97%. Year-to-date changes are -1.83% for spot and -2.74% for futures [40]. - Vegetable prices have shown significant fluctuations due to seasonal demand [27]. Soft Drinks - The spot cost index for soft drinks increased by 0.78% month-on-month, while the futures index decreased by 5.63%. Year-to-date changes are -4.99% for spot and -8.6% for futures [41]. - PET prices are stable to weak, reflecting changes in demand and inventory levels [31].

Core Viewpoint - Citi's report indicates that YouRan Agriculture's mid-term loss narrowing aligns with expectations, while revenue growth of 2% falls short of projections, offset by better-than-expected improvement in gross margin [1] Financial Performance - Operating cash flow turned positive, primarily due to a decrease in feed costs and a lower proportion of calves and young cattle [1] - Management aims for a double-digit growth in production by 2025, targeting over 4 million tons [1] Future Outlook - Gross margin in the second half is expected to remain stable compared to the first half, with year-on-year improvement anticipated [1] - The company hopes to reduce fair value impairment losses on biological assets and enhance free cash flow [1] Analyst Adjustments - Citi has revised its net profit forecasts for YouRan Agriculture for 2025 to 2027 down by 15% to 37% [1] - Target price has been raised from HKD 3.3 to HKD 5.4, maintaining a "Buy" rating [1]

Summary of Yuran Dairy's Conference Call Company Overview - **Company**: Yuran Dairy - **Period**: First half of 2025 - **Total Revenue**: 10.284 billion CNY, up 2.3% year-on-year [2][3][10] Key Financial Metrics - **Raw Milk Revenue**: 7.89 billion CNY, accounting for 76.8% of total revenue, up 7.9% [2][11] - **Raw Milk Sales Volume**: 2.04 million tons, up 15.8% [3][11] - **Gross Profit**: 3.09 billion CNY, up 8.3% [2][10] - **Gross Margin**: 30%, an increase of 1.7 percentage points [2][10] - **Net Loss**: 250 million CNY, a reduction of 47% from the previous year [3][10] - **Free Cash Flow**: 2.81 billion CNY, up 7% [3][10] Operational Highlights - **Annualized Milk Production per Cow**: 12.9 tons, up 2.4% [2][5] - **High-Quality Fresh Milk Production**: 13.1 tons per cow, a historical high [2][5] - **Cost Savings**: 0.26 CNY per kg of milk, a reduction of 12% [2][5] - **Feed Sales Volume**: Decreased by 9.7% to 430,000 tons [2][6] Strategic Initiatives - **Breeding Strategy**: Adjusted to improve cow productivity and genetic quality [5][9] - **Smart Operations**: Implemented technology for precise feeding and cow comfort [5][9] - **Green Development**: Initiatives include biogas purification projects and proprietary alfalfa cold-resistant gene technology [2][8] Market Challenges and Responses - **Industry Pressure**: Faced challenges from international trade tensions and weak domestic consumption [3][10] - **Sales Strategy Adjustments**: Introduced specialized feed brands and expanded into overseas markets [6][13] - **Cost Control**: Reduced sales, administrative, and financial expenses [14] Future Outlook - **Production Goals**: Expected average milk production to maintain around 13 tons, with total output exceeding 4 million tons [4][27] - **Market Demand**: Anticipated improvement in demand due to seasonal factors and macroeconomic policies [16][22] - **Long-term Strategy**: Focus on technological innovation, management upgrades, and green development [9][15] Industry Trends - **Raw Milk Pricing**: Expected to stabilize as supply-demand balance improves by year-end [16][22] - **Deep Processing of Dairy Products**: Considering expansion into cheese and whey production, despite current limitations in resources [19][20] Conclusion Yuran Dairy has demonstrated resilience in the face of industry challenges, achieving growth in revenue and production metrics while implementing strategic initiatives for cost control and operational efficiency. The company is well-positioned for future growth with a focus on innovation and sustainability.

Investment Rating - Industry rating: Outperform the market (maintained rating) [9] Core Insights - The pet industry is experiencing significant growth, with the Asia Pet Expo showcasing over 2,600 exhibitors and 20,000 brands, indicating a thriving market driven by globalization and innovation [2][13] - China's pet food exports have shown continuous growth, with 201,000 tons exported from January to July 2025, reflecting a year-on-year increase of 6.64% [14] - The pig farming sector is facing challenges, with the average pig price at 13.82 yuan/kg, a decrease of 3.63% from the previous week, and the average weight of pigs reaching a historical high [15][16] - The dairy sector is poised for a recovery, with the original milk price expected to rebound as production capacity decreases after a prolonged period of losses [17][18] - The poultry sector is focusing on breeding gaps, with a significant decline in the import of breeding chickens due to avian influenza concerns, which may impact future supply [19][20] - The planting sector emphasizes food security and the importance of biotechnology, with a focus on high-yield and resilient crop varieties [25] - The feed sector is recommended for investment, particularly in companies like Haida Group, which is expected to benefit from market recovery and increased market share [26] Summary by Sections Pet Sector - The Asia Pet Expo has reached a record scale of 310,000 square meters, highlighting the industry's vitality and innovation potential [2][13] - Pet food exports from China have increased, with a total of 201,000 tons exported in the first seven months of 2025, showing a year-on-year growth of 6.64% [14] - Recommended companies include pet food brands like Guibao Pet, Zhongchong Co., and Petty Co. [14] Pig Sector - The average pig price is currently at 13.82 yuan/kg, with a year-to-date low in profitability for pig farming [15][16] - The average weight of pigs is at a historical high, indicating supply pressures [15] - Recommended companies include leading pig farming firms such as Wens Foodstuffs Group and Muyuan Foods [16] Dairy Sector - Yuran Dairy reported stable performance with a revenue of 10.3 billion yuan, showing a year-on-year growth of 2.3% [17] - The dairy industry is expected to see a recovery as production capacity decreases [18] - Recommended companies include Yuran Dairy and China Shengmu Organic Milk [18] Poultry Sector - The poultry sector is facing challenges with breeding imports, particularly for white chickens, due to avian influenza [19][20] - Recommended companies include Shennong Development and Yisheng Livestock [20] Planting Sector - The focus is on food security and biotechnology, with an emphasis on high-yield and resilient crop varieties [25] - Recommended companies include Longping High-Tech and Dabeinong Technology Group [25] Feed Sector - Haida Group is highlighted as a key investment opportunity due to its increasing market share and performance [26] - The animal health sector is also recommended, particularly companies like Kexin Biological [27]

Core Viewpoint - Yuran Dairy has demonstrated strong performance in the first half of 2025, showcasing its growth potential and leadership in the dairy industry during a critical recovery period [1][3]. Financial Performance - The company achieved a revenue of 10.284 billion yuan, representing a year-on-year increase of 2.3% [1]. - The comprehensive gross profit margin improved by 1.7 percentage points to 30% [1]. - Net profit, excluding the impact of biological asset fair value changes, reached 1.985 billion yuan, up 10.1% year-on-year [1]. - Cash EBITDA was 2.811 billion yuan, reflecting a 7.1% increase [1]. - Free cash flow increased by 700 million yuan compared to the same period last year, indicating improved operational quality and capital management efficiency [1]. Operational Efficiency - The company has implemented cost reduction and efficiency enhancement measures, leading to improved revenue scale, profitability, and cash flow [3]. - Yuran Dairy's raw milk business generated revenue of 7.896 billion yuan, a 7.9% increase, with a gross margin of 34.7% [4]. - The annualized single production per farm increased to 13.1 tons, with total raw milk production reaching 2.0816 million tons, up 15.8% [8]. Product and Market Development - The company is focusing on high-value specialty milk products, such as organic and A2 milk, to meet market demand for health and nutrition [6]. - The number of dairy goats increased to 21,500, indicating further growth potential [6]. - Yuran Dairy has expanded its feed business, with sales of beef and sheep feed increasing by 60.9% year-on-year [11]. Technological and Strategic Innovations - The company is leveraging technology to enhance production efficiency and reduce costs, including the development of low-soybean meal formulas [8]. - Yuran Dairy is advancing its breeding business with self-developed breeding technology, maintaining a leading position in the industry [11]. - The company has also made significant breakthroughs in domestic high-quality breeding sources, with a 30.95% increase in breeding business revenue [11]. Industry Outlook - Favorable policies and internal growth dynamics are expected to accelerate the recovery of the dairy industry [14]. - The implementation of new national standards for sterilized milk is anticipated to raise industry quality thresholds, benefiting companies like Yuran Dairy that can provide high-quality raw milk [15]. - The company is well-positioned to capitalize on the ongoing recovery momentum in the industry, supported by its six core advantages, including a full industry chain model and technological innovation [15].

Group 1 - The company, Youran Dairy (09858), reported a revenue of 10.284 billion RMB for the six months ending June 30, 2025, representing a year-on-year increase of 2.28% [1] - The net loss attributable to shareholders narrowed to 297 million RMB, a decrease of 10.37% compared to the previous year [1] - Basic loss per share was 0.08 RMB [1] Group 2 - The revenue from raw milk increased by 7.9% from 7.320 billion RMB in the first half of 2024 to 7.896 billion RMB during the reporting period, driven by improved milk yield per cow and optimized herd structure [1] - Raw milk sales volume grew by 15.8% from 1.7613 million tons in the first half of 2024 to 2.0397 million tons in the reporting period [1] - The average price of raw milk decreased by 7.0%, from 4.16 RMB per kilogram in the first half of 2024 to 3.87 RMB per kilogram during the reporting period, due to a temporary imbalance in supply and demand in the domestic raw milk market [1]

Core Insights - YouRan Agriculture (9858.HK) reported a mid-year performance for 2025, achieving revenue of 10.284 billion, a year-on-year increase of 2.3% [1] - The profit for the period (before fair value adjustments of biological assets) was 1.985 billion, reflecting a year-on-year growth of 10.1% [1] - Cash EBITDA reached 2.811 billion, up 7.1% year-on-year [1] - The gross profit margin stood at 30%, an increase of 1.7 percentage points compared to the previous year [1] Revenue Breakdown - Revenue from raw milk business was 7.896 billion, showing a year-on-year growth of 7.9% [1] - The annualized single production of quality fresh milk breeding cows (excluding SaiKeXing) increased to 13.1 tons [1] - The cost of feed per kilogram decreased by 12% year-on-year [1] Business Segment Performance - Sales volume of precision feed for beef and sheep under the ruminant systematic solution business grew by 60.9% year-on-year [1] - Revenue from breeding business increased by 30.95% year-on-year [1] - Sales of dairy cow sexed embryos rose by 13.5% year-on-year, indicating significant improvement across various business metrics [1]