[Company Profile](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E7%B0%A1%E4%BB%8B) China Youran Dairy Group is a leading upstream dairy market player, covering breeding, feed, and raw milk production across the entire industry chain - China Youran Dairy Group Co., Ltd. is a leader in China's upstream dairy market, with a complete business covering the entire industry chain from breeding and feed to raw milk production[3](index=3&type=chunk) - As of June 30, 2025, the Group operates **100 dairy farms**, **15 feed production bases**, **16 forage production bases**, **5 core dairy cattle breeding bases**, and one online platform "Jumucheng Technology"[4](index=4&type=chunk) - Owns **623,350 head of dairy cattle** and **21,452 head of dairy goats**, with a production of **2,081,580 tons of high-quality raw milk** and specialty raw milk[4](index=4&type=chunk) - Sales of breeding products reached **540,606 doses (pieces)**, with embryo product sales increasing by **13.5%** compared to mid-2024[4](index=4&type=chunk) - The company is committed to comprehensively enhancing technological value, leading the high-quality development of China's dairy industry, and continuously contributing to its healthy, low-carbon, and sustainable development[5](index=5&type=chunk) [Company Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) The company announced significant changes to its board of directors and committee members, with new appointments and resignations, and confirmed Deloitte Touche Tohmatsu as its auditor - Mr. Hao Haijun was appointed Executive Director, Chairman, and President on March 28, 2025, and Ms. Meng Yilan was appointed Executive Director on the same day[12](index=12&type=chunk) - Mr. Bai Wenzhong, Ms. Li Lin, and Ms. Huang Lin were appointed Non-executive or Independent Non-executive Directors on June 27, 2025[12](index=12&type=chunk) - Mr. Yuan Jun, Mr. Qiu Zhongwei, Mr. Xu Jun, Mr. Yang Huicheng, and Mr. Shen Jianzhong resigned from their respective directorships[12](index=12&type=chunk)[13](index=13&type=chunk) - Members of the Audit Committee, Remuneration Committee, Nomination Committee, and Environmental, Social and Governance Committee were adjusted[12](index=12&type=chunk)[13](index=13&type=chunk) - The company's auditor is Deloitte Touche Tohmatsu, with its registered office in the Cayman Islands and headquarters in Hohhot, Inner Mongolia, China[13](index=13&type=chunk)[15](index=15&type=chunk) [Summary](index=6&type=section&id=%E6%91%98%E8%A6%81) The Group reported a 2.3% revenue increase to RMB 10.28 billion, with gross profit up 8.3% and a significant 47.0% reduction in loss for the period, driven by improved gross margin and optimized herd structure 2025 H1 Key Financial and Operational Data (Unaudited) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 10,284,217 | 10,054,941 | 2.3 | | Gross Profit | 3,086,430 | 2,848,892 | 8.3 | | Loss for the Period | (247,126) | (466,707) | 47.0 | | Loss for the Period Attributable to Owners of the Company | (296,571) | (330,873) | 10.4 | | Cash EBITDA | 2,810,692 | 2,623,640 | 7.1 | | Profit for the Period (before fair value adjustment of biological assets) | 1,985,389 | 1,804,038 | 10.1 | | Annualized Yield per Mature Cow (excluding Jersey cows) (tons) | 12.9 | 12.6 | 2.4 | - Gross margin increased from **28.3%** in mid-2024 to **30.0%** during the reporting period[20](index=20&type=chunk) - Raw milk feed costs decreased year-on-year, with continuous expansion of herd size and optimization of herd structure, increasing the proportion of mature cows to **53.5%**[20](index=20&type=chunk) - The Board does not recommend the distribution of an interim dividend for the six months ended June 30, 2025[16](index=16&type=chunk) [Production Base Location Map](index=8&type=section&id=%E7%94%A2%E7%94%A2%E5%9F%BA%E5%9C%B0%E4%BD%8D%E7%BD%AE%E5%9C%96) The Group operates 100 dairy farms and multiple feed and forage production bases across 17 provinces in China, supporting a large herd and diverse product offerings - The Group operates **100 dairy farms** across **17 provinces, municipalities, and autonomous regions** in China, with approximately **623,000 head of dairy cattle** and over **21,000 head of dairy goats**[22](index=22&type=chunk) - Owns **5 core breeding bases** (including Wisconsin, USA, Horinger, and Qingshuihe, China), **15 feed production bases**, and **16 forage production bases**[22](index=22&type=chunk) - During the reporting period, concentrate feed product output exceeded **547,000 tons**, and over **10,000 types of farming consumables** were provided through online platforms and **24 offline dairy cattle supermarkets**[22](index=22&type=chunk) Distribution of Production Bases (as of June 30, 2025) | Region | Operating Farms (number) | Of which: New Operating Farms during Reporting Period (number) | Feed Production Bases (number) | Forage Production Bases (number) | | :--- | :--- | :--- | :--- | :--- | | Inner Mongolia-Shanxi Region | 44 | 1 | 3 | 1 | | Northeast Region | 18 | / | 3 | 4 | | North China Region | 11 | 1 | 1 | 1 | | Central China Region | 21 | 1 | 4 | 8 | | Northwest Region | 6 | / | 4 | 2 | | **Total** | **100** | **3** | **15** | **16** | [Management Discussion and Analysis](index=9&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) This section provides an in-depth review of the Group's operational performance, financial results, and strategic initiatives, including industry trends, business segments, R&D, quality, procurement, digitalization, and sustainability efforts [Industry Review](index=9&type=section&id=%E8%A1%8C%E6%A5%AD%E5%9B%9E%E9%A1%A7) During the reporting period, China's macroeconomy showed stable growth, but the dairy industry faced capacity adjustments, insufficient demand, and low raw milk prices, partially offset by declining bulk raw material costs and supportive government policies - China's macro policies showed effectiveness, with the economy maintaining a stable and positive development trend, but the supply-demand imbalance in the dairy product industry remained prominent[24](index=24&type=chunk) - Total raw milk production increased slightly by **0.5%** year-on-year, with growth slowing by **2.9 percentage points** compared to the same period in 2024[24](index=24&type=chunk) - The average price of raw milk in major dairy-producing provinces decreased by **11.7%** year-on-year to **RMB 3.08 per kilogram**[24](index=24&type=chunk) - Declining bulk raw material prices: average prices of soybean meal and corn decreased by approximately **8.8%** and **9.2%** year-on-year, respectively, and imported alfalfa hay prices decreased by approximately **9.9%**, partially alleviating cost pressures[24](index=24&type=chunk) - National policies aim to strengthen raw milk quality and expand demand for raw milk, including expanding the coverage of "student milk" and new standards prohibiting the use of reconstituted milk in sterilized milk[25](index=25&type=chunk) [Business Review](index=10&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) During the reporting period, the Group, as China's largest integrated upstream dairy product and service provider, achieved a 2.3% year-on-year revenue increase to RMB 10,284 million, primarily driven by its raw milk business - The Group's revenue increased by **2.3%** from **RMB 10,055 million** in mid-2024 to **RMB 10,284 million** during the reporting period[28](index=28&type=chunk) Overview of Revenue by Business Segment (for the six months ended June 30, 2025) | Business Segment | Revenue (RMB billions) | Revenue Share (%) | | :--- | :--- | :--- | | Raw Milk | 79.0 | 76.8 | | Ruminant Farming Systematized Solutions | 23.9 | 23.2 | - Raw milk business revenue increased by **7.9%** year-on-year, while ruminant farming systematized solutions revenue decreased by **12.7%** year-on-year[29](index=29&type=chunk)[30](index=30&type=chunk) [Raw Milk Business](index=12&type=section&id=%E5%8E%9F%E6%96%99%E5%A5%B6%E6%A5%AD%E5%8B%99) The raw milk business saw a 7.9% revenue increase and 15.8% sales volume growth, despite a 7.0% average price drop, achieved through farm expansion, herd optimization, and technology-driven lean management, while also advancing low-carbon environmental strategies - Raw milk business revenue was approximately **RMB 7.9 billion**, an increase of **7.9%** compared to mid-2024, accounting for **76.8%** of total revenue[29](index=29&type=chunk) - Raw milk sales volume was approximately **2,039,670 tons**, an increase of **15.8%** compared to mid-2024; the average price of raw milk was **RMB 3.87 per kilogram**, a decrease of **7.0%** compared to mid-2024[34](index=34&type=chunk) - Added **3 new operational dairy farms**, bringing the total to **100**; dairy cattle inventory reached **623,350 head**, with the proportion of mature cows increasing to **53.5%** (an increase of **3.9 percentage points** compared to June 30, 2024)[33](index=33&type=chunk)[36](index=36&type=chunk) - Annualized yield per mature cow (excluding Jersey cows) was **12.9 tons**, an increase of **2.4%** compared to mid-2024[34](index=34&type=chunk)[37](index=37&type=chunk) - Built a technology system of "data-driven decision-making – intelligent IoT – breeding innovation", applied the "Hui Mu Yun" smart farm management system, and conducted genetic improvement through OPU-IVF embryo transfer technology[38](index=38&type=chunk) - Promoted lean management with the TPM system as the core, achieving a **12.0%** year-on-year decrease in feed cost per kilogram of raw milk[39](index=39&type=chunk) - Implemented a low-carbon environmental strategy, including **11 photovoltaic farm projects**, upgrading **62 farm boilers** to air source heat pumps, and promoting new energy equipment[42](index=42&type=chunk) - Conducted research on substituting imported alfalfa, optimized wrapped alfalfa silage technology, and reduced imported alfalfa hay purchases by **9.9%** compared to mid-2024[43](index=43&type=chunk) [Ruminant Farming Systematized Solutions](index=15&type=section&id=%E5%8F%8D%E9%9B%BB%E5%8B%95%E7%89%A9%E9%A4%8A%E6%AE%96%E7%B3%BB%E7%B5%B1%E5%8C%96%E8%A7%A3%E6%B1%BA%E6%96%B9%E6%A1%88) The Ruminant Farming Systematized Solutions business generated RMB 2.39 billion in revenue, offering premium feed, breeding technologies, and consumables, with significant growth in beef cattle and sheep feed sales and breeding products, while enhancing market competitiveness through strategic initiatives - Ruminant farming systematized solutions revenue was approximately **RMB 2.39 billion**, accounting for **23.2%** of total revenue[30](index=30&type=chunk) - Concentrate feed sales volume was **430,688 tons**, a year-on-year decrease of **9.7%**; beef cattle and sheep feed sales achieved a significant year-on-year increase of **60.9%**[48](index=48&type=chunk)[51](index=51&type=chunk) - Operates **15 feed production bases**, with concentrate feed production of **547,053 tons** during the reporting period; Bayannur production base was awarded the 2025 Municipal Green Manufacturing Demonstration Unit[49](index=49&type=chunk) - Launched "Youyi Niu" a specialized feed brand for dairy cattle, pioneered the "Beef Cattle and Sheep Customer Value Creation Service System", and successfully expanded into the Mongolian market[50](index=50&type=chunk)[51](index=51&type=chunk) - Breeding product sales increased by **10.3%** to **540,606 doses (pieces)**, with sex-sorted embryo sales increasing by **13.5%** year-on-year[64](index=64&type=chunk) - Operates **5 core breeding bases**, building a diversified germplasm supply system for "dairy cattle + beef cattle + dairy goats", with **4 breeding bulls** ranked among the top 10 nationwide by the American Holstein Association[65](index=65&type=chunk)[68](index=68&type=chunk) - Achieved multiple significant technological breakthroughs in high-end dairy cattle germplasm excavation, breeding new technology innovation ("Breeding No. 1 Chip"), gene-editing bio-breeding and sex control technology, and industrial application of high-yield dairy cattle sex-sorted embryos[66](index=66&type=chunk)[70](index=70&type=chunk) - Forage business established **16 production bases**, improved quality through alfalfa cold-resistance gene technology and wrapped silage technology, promoted integrated crop-livestock farming, and completed approximately **55,100 mu** of no-till carbon sequestration sowing[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - Dairy cattle supermarket business provides over **10,000 types of farming consumables** through the online platform "Jumucheng Technology" and **24 offline dairy cattle supermarkets**, and launched its own brand cleaning solution "Youmujing"[60](index=60&type=chunk)[62](index=62&type=chunk) [R&D Strategic Management](index=21&type=section&id=%E7%A0%94%E7%99%BC%E6%88%B0%E7%95%A5%E7%AE%A1%E7%90%86) Leveraging over 40 years of experience, the Group focuses on full-chain upstream dairy R&D with a team of nearly 400, securing 11 new patents and accumulating 102 core patents, driving innovation in farming, feed, breeding, and sustainable practices - R&D team of nearly **400 people**, with **11 new patent authorizations** and a cumulative total of **102 core patented technologies** covering various business segments[72](index=72&type=chunk) - Participated in the formulation and release of **1 national standard**, **3 industry standards**, and **1 local standard** during the reporting period[72](index=72&type=chunk) - R&D focuses on innovation in herd farming technology, development of specialty raw milk, research on feed nutritional value, breakthroughs in cattle genetic improvement and sex control technology, and standards for integrated crop-livestock farming and ecological farming[69](index=69&type=chunk) - Built a diversified product matrix, including **8 types of specialty raw milk** and concentrate feed products with independent core technologies (e.g., carbon reduction and yield-increasing feed)[72](index=72&type=chunk) - Deepened the application of herd genetic improvement and sex control technologies, innovated roughage processing technologies and planting models, and actively promoted major agricultural bio-breeding projects[72](index=72&type=chunk) [Quality Assurance](index=23&type=section&id=%E8%B3%AA%E9%87%8F%E4%BF%9D%E9%9A%9C) Committed to "creating the source of human healthy life with quality," the Group implements a "full value chain" quality management model, achieving 100% product qualification rates and raw milk quality far exceeding EU standards through digital systems and international certifications - Built a "full value chain" quality management model covering the entire upstream dairy industry chain, obtaining multiple food safety and quality management system certifications including SQF, ISO9001, ISO22000, ChinaGAP, FAMI-QS, and ISO17025[73](index=73&type=chunk) - The first comprehensive enterprise in China to pass SQF certification for livestock farming and feed processing[73](index=73&type=chunk) - Utilizes near-infrared databases, quality information management systems, EHSQ, and Hui Mu Yun smart farm management system to achieve real-time collection, precise transmission, and intelligent analysis of full-chain quality information[74](index=74&type=chunk) - Products maintained a **100% qualification rate** in national and local supervision and inspections during the reporting period[74](index=74&type=chunk) - Raw milk's total bacterial count and somatic cell count are significantly superior to standards in China's National Premium Milk Project and industry standards in the United States, Japan, and the European Union[74](index=74&type=chunk) [Procurement Strategic Management](index=24&type=section&id=%E6%8E%A1%E8%B3%BC%E6%88%B0%E7%95%A5%E7%AE%A1%E7%90%86) The Group employs a "full lifecycle" supplier management system, focusing on cost reduction and efficiency, utilizing diverse procurement strategies and digitalization to manage bulk raw material price volatility, resulting in a 12.0% decrease in raw milk feed costs, while integrating sustainability into its supply chain - Adopted a "full lifecycle" supplier management system, utilizing various procurement strategies such as hedging, strategic reserves, direct sourcing, global procurement, and dynamic pricing[76](index=76&type=chunk) - Implemented digitalization projects such as "Material Procurement Planning and Execution Full-Process Digitalization Project", "Electronic Contract Digital Management", and "Visualized Report Monitoring" to enhance supply chain efficiency[76](index=76&type=chunk) - Average feed cost for raw milk decreased by **12.0%** compared to mid-2024, primarily due to declining bulk raw material market prices and supply chain process control[76](index=76&type=chunk) - Promoted green cooperation with suppliers, procuring **3,305 tons of deforestation-free soybean meal**, reducing supply chain carbon emissions[77](index=77&type=chunk) - Formulated and issued the "Supplier ESG Management Measures" to strengthen full-lifecycle ESG management of suppliers and enhance ESG risk control capabilities[77](index=77&type=chunk) [Digitalization Management](index=24&type=section&id=%E6%95%B8%E5%AD%97%E5%8C%96%E7%AE%A1%E7%90%86) Adhering to "data-driven business innovation, technology-enabled business value-add," the Group upgrades digital assets like "Hui Mu Yun," building four core capabilities including full-lifecycle dairy cattle data management and integrated business-finance control, while pioneering "fully intelligent unmanned cowsheds" and proprietary digital tools - Adhered to the principle of "data-driven business innovation, technology-enabled business value-add", optimizing and upgrading digital assets such as "Hui Mu Yun" and the "Dairy Cattle Precision Nutrition Platform"[78](index=78&type=chunk) - Focused on building four core capabilities: full-lifecycle dairy cattle and production operation data management; integrated business, finance, and human resources control platform; integrated environmental, health, safety, and quality management and traceability system; and precision marketing, service, and deep channel management capabilities[78](index=78&type=chunk) - Pioneered the creation of "fully intelligent unmanned cowsheds", adopting the most advanced international intelligent robots, TMR feeding systems, and intelligent bio-fermentation systems[79](index=79&type=chunk) - Independently developed digital tools such as the "Supply Chain Master Planning System" and "Hui Cao Yun – Forage Planting Supervision System" to promote full-industry chain digitalization[79](index=79&type=chunk) - Continuously enhanced the automation of company production and operation data collection, unmanned operations, remote management, and comprehensive optimization of business chains through big data platforms and AI algorithm models[79](index=79&type=chunk) [Construction of Sustainable Development Model](index=25&type=section&id=%E5%8F%AF%E6%8C%81%E7%BA%8C%E7%99%BC%E5%B1%95%E6%A8%A1%E5%BC%8F%E6%A7%8B%E5%BB%BA) The Group deepens its green and sustainable development strategy, targeting carbon peak by 2030 and carbon neutrality by 2050, advancing biogas utilization, integrated crop-livestock farming across nearly 2 million mu, and publishing biodiversity and climate reports, earning recognition in S&P Global's Sustainability Yearbook - Continuously deepened the sustainable development management system, adhering to the strategic goals of carbon peak by **2030** and carbon neutrality by **2050**[80](index=80&type=chunk) - Promoted high-value utilization of biogas for purification and external sales, completed the project proposal review for the Zhumadian farm's carbon asset development project[80](index=80&type=chunk) - Vigorously developed the "integrated crop-livestock farming" model, promoting grassland improvement and forage planting, with actual integrated farming land area of nearly **2 million mu**[80](index=80&type=chunk) - Implemented the "straw-to-milk" program, providing free organic fertilizer to local farmers and promoting silage varieties, driving income growth for farmers and herders[80](index=80&type=chunk) - First time publishing the **2024 "Biodiversity Protection Report"** and **"Climate Information Disclosure Report"**, systematically identifying and assessing nature-related impacts, risks, and opportunities[82](index=82&type=chunk) - Selected for S&P Global's "Sustainability Yearbook (China Edition)" for two consecutive years, and ranked among the **top 10 Chinese enterprises** in the food industry in the S&P Global CSA 2024 assessment for the "2025 Sustainability Yearbook (China Edition)"[82](index=82&type=chunk) [Outlook](index=26&type=section&id=%E5%89%8D%E6%99%AF) The Group will leverage national policy benefits, with innovation as its core engine, integrating digitalization and lean management to deepen six core strategic initiatives, consolidating its leading position in the upstream dairy industry and driving sustainable high-quality development - Innovation as the core engine for high-quality development, comprehensively integrating digitalization technology with lean management models[83](index=83&type=chunk) - Raw milk business will be driven by "innovation + lean management", improving feed conversion rates, yield per cow, and profit per cow, and accelerating the implementation of intelligent technology R&D[83](index=83&type=chunk) - Feed business aims to rank first in ruminant dairy cattle business and among the top three in beef cattle and sheep business within five years, focusing on building a "product strength + service strength + brand strength" system[86](index=86&type=chunk) - Forage business will deeply cultivate high-quality forage breeding and improvement, optimize planting models and processing technologies, and reduce production costs[86](index=86&type=chunk) - Breeding business will focus on cultivating high-quality breeding cattle, continuously breaking through "bottleneck" technologies, and promoting self-sufficiency in dairy cattle, beef cattle, and dairy goat germplasm[86](index=86&type=chunk) - Continuously consolidate and expand the long-term advantages of being "the most comprehensive, largest in scale, best structured and laid out, and most efficiently operated" in the upstream dairy industry chain[85](index=85&type=chunk) [Financial Review](index=28&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) During the reporting period, the Group's revenue increased by 2.3% to RMB 10,284 million, gross profit rose by 8.3% to RMB 3,086 million, and gross margin improved to 30.0%, with loss for the period significantly narrowed by 47.0% to RMB (247) million, primarily due to increased raw milk sales, lower feed costs, reduced finance costs, and a narrower loss from fair value changes of biological assets Revenue Overview (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 10,284,217 | 10,054,941 | 2.3 | | Raw Milk Revenue | 7,895,650 | 7,320,419 | 7.9 | | Ruminant Farming Systematized Solutions Revenue | 2,388,567 | 2,734,522 | (12.7) | Gross Profit and Gross Margin (for the six months ended June 30) | Business Segment | 2025 Gross Profit (RMB thousands) | 2025 Gross Margin (%) | 2024 Gross Profit (RMB thousands) | 2024 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Raw Milk | 2,743,407 | 34.7 | 2,374,825 | 32.4 | | Ruminant Farming Systematized Solutions | 343,023 | 14.4 | 474,067 | 17.3 | | **Total** | **3,086,430** | **30.0** | **2,848,892** | **28.3** | - Loss for the period narrowed by **47.0%** from **RMB 467 million** in mid-2024 to **RMB 247 million** during the reporting period[112](index=112&type=chunk) - Loss from changes in fair value less costs to sell of biological assets decreased from **RMB 2,271 million** in mid-2024 to **RMB 2,233 million** during the reporting period[101](index=101&type=chunk) - Finance costs decreased by **14.8%** from **RMB 463 million** in mid-2024 to **RMB 395 million** during the reporting period[109](index=109&type=chunk) Non-IFRS Measures (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cash EBITDA | 2,810,692 | 2,623,640 | | Profit for the Period (before fair value adjustment of biological assets) | 1,985,389 | 1,804,038 | [Liquidity and Capital Resources](index=34&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E6%BA%90) The Group generated RMB 2,869 million in net cash from operating activities, with a net increase of RMB 65 million in cash and cash equivalents, while the net leverage ratio slightly decreased to 184.6%, and capital commitments significantly reduced due to the completion of strategic farm layouts Cash Flow Overview (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 2,868,737 | 3,343,107 | | Net Cash Used in Investing Activities | (2,784,050) | (3,957,784) | | Net Cash Used in Financing Activities | (19,155) | (2,198,596) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 65,532 | (2,813,273) | | Cash and Cash Equivalents at End of Period | 1,681,320 | 1,674,270 | - Net leverage ratio was **184.6%** as of June 30, 2025, a decrease of **0.6 percentage points** from **185.2%** as of December 31, 2024, primarily due to a decrease in net debt[127](index=127&type=chunk) - Capital commitments were **RMB 434 million**, a significant decrease from **RMB 949 million** as of December 31, 2024, mainly due to the completion of strategic layout for dairy farm construction in the golden milk source belt[128](index=128&type=chunk) - Certain bank and other borrowings are secured by the Group's assets, including **36.26%** equity interest in Saikexing, **60.59%** equity interest in Shanxi Youran Tianhe Dairy, and **61.44%** equity interest in Tangshan Youran Dairy[129](index=129&type=chunk) - As of June 30, 2025, the Group had no significant contingent liabilities[126](index=126&type=chunk) [Employees and Remuneration Policy](index=38&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had 12,890 full-time employees, with total remuneration expenses of RMB 844 million, an 8.0% increase, as the company focuses on building a sustainable talent supply chain through internal development, external recruitment, performance-based incentives, and corporate culture enhancement Employee Function Distribution (as of June 30, 2025) | Function | Number of Employees | Percentage of Total (%) | | :--- | :--- | :--- | | Management Personnel | 1,280 | 9.9 | | Professional Personnel | 1,422 | 11.0 | | Technical Personnel | 2,881 | 22.4 | | Skilled Personnel | 6,970 | 54.1 | | Support Personnel | 337 | 2.6 | | **Total** | **12,890** | **100.0** | - Total remuneration expenses (excluding contributions to retirement benefit plans) were **RMB 844 million**, an increase of **8.0%** compared to **RMB 782 million** in mid-2024[141](index=141&type=chunk) - In terms of talent assurance, the company adheres to a combination of internal cultivation and external recruitment, conducts dynamic talent inventory, and deepens cooperation with educational institutions[139](index=139&type=chunk) - In terms of capability building, the "Youran Talent Navigation" talent development program was upgraded, establishing a three-dimensional talent development system of "management echelon, professional competence, and expert cultivation"[142](index=142&type=chunk) - In terms of organizational activation and efficiency improvement, the "2025 Business Unit Performance 'Horse Racing' Evaluation Plan" was formulated to enhance organizational efficiency through mechanism innovation and management optimization[142](index=142&type=chunk) - In terms of cultural construction, internal cohesion and external influence were enhanced through vision leadership, system integration, value assessment management, and innovative practice construction[142](index=142&type=chunk) [Significant Events After Reporting Period](index=40&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E9%96%93%E5%BE%8C%E9%87%8D%E5%A4%A7%E4%BA%8B%E4%BB%B6) No significant events affecting the Group occurred from the end of the reporting period up to the date of this report - No significant events affecting the Group occurred from the end of the reporting period up to the date of this report[144](index=144&type=chunk) [Continuing Connected Transactions](index=40&type=section&id=%E6%8C%81%E7%BA%8C%E9%97%9C%E9%80%A3%E4%BA%A4%E6%98%93) The Group entered into a Logistics and Operations Support Services Framework Agreement with Inner Mongolia Yishun Supply Chain Management Co., Ltd., ensuring fair and reasonable transaction terms through structured, competitive bidding and robust internal control measures - Entered into a "Logistics and Operations Support Services Framework Agreement" with Inner Mongolia Yishun Supply Chain Management Co., Ltd. (Yishun)[145](index=145&type=chunk) - Employs a structured and competitive bidding process to manage and determine the engagement of suppliers and service providers, ensuring fair and reasonable transaction terms[145](index=145&type=chunk) - Each bidding process involves the establishment of an inter-departmental review committee and requires multi-level internal approval procedures to ensure supervision and accountability[146](index=146&type=chunk) - Strict internal control measures are in place, including verification by the legal department that service fees align with winning bids, and review of service fee settlements by business and finance departments[147](index=147&type=chunk) [Other Information](index=41&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section covers directors' and major shareholders' interests, securities transactions, corporate governance compliance, audit committee details, interim dividends, and investor relations [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or any Associated Corporation](index=41&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%88%96%E5%85%B6%E4%BB%BB%E4%BD%95%E7%9B%B8%E8%81%AF%E6%B3%95%E5%9C%98%E7%9A%84%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, no directors or chief executives of the Company held any disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations - As of June 30, 2025, none of the Directors or chief executives of the Company had any interests or short positions in the shares, underlying shares, or debentures of the Company or any of its associated corporations that were required to be disclosed[148](index=148&type=chunk) [Major Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=41&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%96%BC%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, major shareholders including Yili, Boyuan Investment Holdings Limited, Jingang, PAG and its affiliates, and Meadowland Investment Limited Partnership held shares in the Company, with Yili Group holding a total of 33.93% and PAG Group holding 21.13% Major Shareholders' Shareholdings (as of June 30, 2025) | Name of Shareholder | Nature of Interest | Number of Shares (L) | Percentage of Issued Share Capital (%) | | :--- | :--- | :--- | :--- | | Yili | Interest in Controlled Corporation | 1,320,800,000 | 33.93 | | Boyuan Investment Holdings Limited | Beneficial Interest | 800,000,000 | 20.55 | | Jingang | Beneficial Interest | 520,800,000 | 13.38 | | PAG | Interest in Controlled Corporation | 822,602,530 | 21.13 | | Pacific Alliance Group Limited | Interest in Controlled Corporation | 822,602,530 | 21.13 | | Shan Weijian | Interest in Controlled Corporation | 822,602,530 | 21.13 | | PAG Capital Limited | Interest in Controlled Corporation | 822,602,530 | 21.13 | | PAG Dairy GP I Limited | Interest in Controlled Corporation | 822,602,530 | 21.13 | | PAG Dairy I LP | Interest in Controlled Corporation | 822,602,530 | 21.13 | | PAG II | Beneficial Interest | 822,602,530 | 21.13 | | Meadowland Investment Limited Partnership | Beneficial Interest | 564,982,819 | 14.51 | - Yili, through its wholly-owned subsidiaries Boyuan Investment Holdings Limited and Jingang, is deemed to have an interest in a total of **1,320,800,000 shares**[152](index=152&type=chunk) - PAG, through its controlled entities PAG II, PAG Dairy I LP, PAG Dairy GP I Limited, PAG Capital Limited, and Pacific Alliance Group Limited, is deemed to have an interest in a total of **822,602,530 shares**[152](index=152&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=42&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and as of June 30, 2025, the Company held no treasury shares - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[151](index=151&type=chunk) - As of June 30, 2025, the Company did not hold any treasury shares[151](index=151&type=chunk) [Compliance with Corporate Governance Code](index=43&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The Company is committed to strict corporate governance, complying with all applicable provisions of the Corporate Governance Code, except for the combined roles of Chairman and President held by Mr. Hao Haijun, which the Board believes ensures strategic decision-making unity and consistency - The Company has adopted and complied with all applicable code provisions of the Corporate Governance Code[153](index=153&type=chunk) - A deviation from code provision C.2.1 of the Corporate Governance Code exists, as the roles of Chairman and President are combined and held by Mr. Hao Haijun[154](index=154&type=chunk) - The Board believes this structure facilitates the unity and consistency of the Group's strategic decision-making and is committed to continuously evaluating the effectiveness of the governance structure[154](index=154&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=43&type=section&id=%E9%81%B5%E5%AE%88%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The Company has adopted the Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules, and all directors confirmed strict compliance during the reporting period - The Company has adopted the Model Code as set out in Appendix C3 of the Listing Rules as its code of conduct regarding securities transactions by Directors of the Company[156](index=156&type=chunk) - Following specific enquiries made to all Directors, all Directors confirmed that they had strictly complied with the required standards set out in the Model Code during the reporting period[156](index=156&type=chunk) [Audit Committee](index=43&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising Ms. Xie Xiaoyan (Chairperson), Mr. Yao Feng, and Ms. Huang Lin, reviewed the Group's unaudited interim financial statements and report, discussing accounting policies and internal controls with management and auditors, who conducted their review in accordance with ISRE 2410 - The Audit Committee comprises three members: Ms. Xie Xiaoyan (Chairperson), Mr. Yao Feng, and Ms. Huang Lin[157](index=157&type=chunk) - The Committee reviewed the Group's unaudited interim financial statements and interim report for the reporting period, and discussed accounting policies and internal control matters with senior management and the auditors[157](index=157&type=chunk) - The condensed consolidated financial statements for the reporting period have been reviewed by the auditors in accordance with International Standard on Review Engagements 2410[157](index=157&type=chunk) [Other Board Committees](index=44&type=section&id=%E5%85%B6%E4%BB%96%E8%91%A3%E4%BA%8B%E5%A7%94%E5%93%A1%E6%9C%83) In addition to the Audit Committee, the Company has also established a Nomination Committee, a Remuneration Committee, and an Environmental, Social and Governance Committee - In addition to the Audit Committee, the Company has also established a Nomination Committee, a Remuneration Committee, and an Environmental, Social and Governance Committee[158](index=158&type=chunk) [Interim Dividend](index=44&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend the distribution of an interim dividend for the reporting period - The Board does not recommend the distribution of an interim dividend for the reporting period[159](index=159&type=chunk) [Changes in Directors' Information](index=44&type=section&id=%E8%91%A3%E4%BA%8B%E8%B3%87%E6%96%99%E8%AE%8A%E5%8B%95) During the reporting period, the Company's Board of Directors underwent several changes, including the appointment of Mr. Hao Haijun as Executive Director, Chairman, and President, Ms. Meng Yilan as Executive Director, and Mr. Bai Wenzhong, Ms. Li Lin, and Ms. Huang Lin as Non-executive or Independent Non-executive Directors, alongside the resignations of Mr. Yuan Jun, Mr. Qiu Zhongwei, Mr. Xu Jun, Mr. Yang Huicheng, and Mr. Shen Jianzhong - Mr. Hao Haijun was appointed as an Executive Director, Chairman of the Board, and President of the Company, effective March 28, 2025[160](index=160&type=chunk) - Ms. Meng Yilan was appointed as an Executive Director of the Company, effective March 28, 2025[161](index=161&type=chunk) - Mr. Bai Wenzhong, Ms. Li Lin, and Ms. Huang Lin were appointed as Non-executive or Independent Non-executive Directors, effective June 27, 2025[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) - Mr. Yuan Jun, Mr. Qiu Zhongwei, Mr. Xu Jun, Mr. Yang Huicheng, and Mr. Shen Jianzhong resigned from their respective directorships[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) [Investor Relations](index=44&type=section&id=%E6%8A%95%E8%B3%87%E8%80%85%E9%97%9C%E4%BF%82) The Company actively promotes investor relations and communication through meetings, events, and online platforms (youranir@yourandairy.com, www.yourandairy.com) to ensure institutional investors and financial analysts are well-informed about the company - The Company has adopted an active policy to promote investor relations and communication, holding meetings and events with the investment community from time to time[171](index=171&type=chunk) - Investors can stay updated via email at youranir@yourandairy.com or the company website at www.yourandairy.com[171](index=171&type=chunk) [Review Report on Condensed Consolidated Financial Statements](index=45&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) Deloitte Touche Tohmatsu reviewed the Group's condensed consolidated financial statements for the six months ended June 30, 2025, concluding no material non-compliance with IAS 34, without expressing an audit opinion due to the limited scope - Deloitte Touche Tohmatsu reviewed the condensed consolidated financial statements of China Youran Dairy Group Company Limited for the six months ended June 30, 2025[174](index=174&type=chunk)[177](index=177&type=chunk) - The scope of review is substantially less than that of an audit conducted in accordance with International Standards on Auditing, and therefore no audit opinion is expressed[175](index=175&type=chunk) - Conclusion: Nothing has come to our attention that causes us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34[176](index=176&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=46&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The Group reported a loss for the period of RMB (247,126) thousand, a significant reduction from the previous year, with total revenue of RMB 10,284,217 thousand and gross profit of RMB 3,086,430 thousand Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 10,284,217 | 10,054,941 | | Cost of Sales | (9,680,506) | (9,328,073) | | Gain on initial recognition of agricultural produce at fair value less costs to sell at point of harvest | 2,482,719 | 2,122,024 | | Gross Profit | 3,086,430 | 2,848,892 | | Loss from changes in fair value less costs to sell of biological assets | (2,232,515) | (2,270,745) | | Other Income | 153,112 | 264,938 | | Selling and distribution expenses | (304,271) | (305,123) | | Administrative expenses | (402,049) | (374,557) | | Finance costs | (394,501) | (462,959) | | Loss before tax | (214,325) | (403,722) | | Income tax expense | (32,801) | (62,985) | | Loss for the period | (247,126) | (466,707) | | Loss for the period attributable to owners of the Company | (296,571) | (330,873) | | Basic loss per share (RMB) | (0.08) | (0.09) | [Condensed Consolidated Statement of Financial Position](index=47&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group reported total equity of RMB 11,936,059 thousand, with non-current assets primarily comprising property, plant and equipment and biological assets, and a net current liability position of RMB 12,273,383 thousand Condensed Consolidated Statement of Financial Position (as of June 30, 2025) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, plant and equipment | 14,775,073 | 15,076,822 | | Biological assets | 14,957,339 | 15,364,953 | | Interests in associates | 853,170 | 891,844 | | **Current Assets** | | | | Inventories | 2,946,083 | 4,311,226 | | Trade receivables | 753,931 | 691,643 | | Bank balances and cash | 1,117,576 | 829,310 | | Deposits with related parties | 563,744 | 785,359 | | **Current Liabilities** | | | | Trade and bills payables | 1,266,620 | 2,275,854 | | Bank and other borrowings | 17,331,654 | 16,709,437 | | **Non-current Liabilities** | | | | Bank and other borrowings | 7,324,343 | 7,546,965 | | **Total Equity** | **11,936,059** | **12,159,758** | - As of June 30, 2025, the Group's net current liabilities amounted to **RMB 12,273,383 thousand**[180](index=180&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=49&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) The Group's total equity as of June 30, 2025, was RMB 11,936,059 thousand, reflecting a loss for the period attributable to owners of the company of RMB 296,571 thousand Condensed Consolidated Statement of Changes in Equity (for the six months ended June 30, 2025) | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Equity attributable to owners of the Company | 11,022,000 | 11,469,470 | | Non-controlling interests | 914,059 | 1,131,629 | | **Total Equity** | **11,936,059** | **12,601,099** | - Loss for the period attributable to owners of the Company was **RMB 296,571 thousand**, while profit for the period attributable to non-controlling interests was **RMB 49,547 thousand**[184](index=184&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=50&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) The Group reported net cash generated from operating activities of RMB 2,868,737 thousand, with a net increase of RMB 65,532 thousand in cash and cash equivalents at the end of the period Condensed Consolidated Statement of Cash Flows (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash generated from operating activities | 2,868,737 | 3,343,107 | | Net cash used in investing activities | (2,784,050) | (3,957,784) | | Net cash used in financing activities | (19,155) | (2,198,596) | | Net increase/(decrease) in cash and cash equivalents | 65,532 | (2,813,273) | | Cash and cash equivalents at end of period | 1,681,320 | 1,674,270 | - Net cash generated from operating activities primarily derived from cash generated from operations, less income tax paid[186](index=186&type=chunk) - Net cash used in investing activities was mainly attributable to payments for biological assets, deposits placed in pledged restricted bank deposits, and payments for property, plant and equipment[186](index=186&type=chunk) - Net cash used in financing activities was primarily attributable to new bank and other borrowings, and used for repayment of principal and interest on bank and other borrowings[186](index=186&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=51&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed notes to the condensed consolidated financial statements, covering general information, basis of preparation, accounting policies, revenue and segment information, cost of sales, other income, finance costs, income tax, loss for the period, earnings per share, dividends, property, plant and equipment, goodwill, biological assets, trade receivables, impairment losses, prepayments, deposits and other receivables, interests in associates, financial assets at fair value through profit or loss, trade and bills payables, other payables and accruals, bank and other borrowings, share capital, fair value measurement, related party transactions, capital commitments, contingent liabilities, and events after the reporting period [General Information](index=51&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) China Youran Dairy Group Company Limited, incorporated in the Cayman Islands and listed on the Stock Exchange since June 18, 2021, primarily engages in raw milk production and sales, and trading, production, and sales of feed, dairy cattle supermarket consumables, and breeding products in China, with its condensed consolidated financial statements presented in RMB - The Company was incorporated in the Cayman Islands, and its shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since June 18, 2021[187](index=187&type=chunk) - The Group is principally engaged in the production and sale of raw milk and the trading, production, and sale of feed, dairy cattle supermarket consumables, and breeding products in China[187](index=187&type=chunk) - The condensed consolidated financial statements are presented in RMB[187](index=187&type=chunk) [Basis of Preparation](index=51&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed consolidated financial statements are prepared in accordance with IAS 34 and Listing Rules, and despite net current liabilities, are presented on a going concern basis as the directors believe the Group has sufficient funds for the next 12 months - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[188](index=188&type=chunk) - As of June 30, 2025, the Group had net current liabilities of **RMB 12.3 billion**[189](index=189&type=chunk) - The condensed consolidated financial statements are prepared on a going concern basis, as the Directors of the Company believe the Group will have sufficient funds to meet its liabilities as they fall due for at least 12 months from June 30, 2025[189](index=189&type=chunk) [Accounting Policies](index=52&type=section&id=%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are prepared on a historical cost basis, except for biological assets and certain financial instruments measured at fair value, with the initial application of IAS 21 (Amendment) 'Lack of Exchangeability' having no significant impact - The condensed consolidated financial statements are prepared on the historical cost basis, except for biological assets which are measured at fair value less costs to sell; and certain financial instruments which are measured at fair value at the end of the reporting period[190](index=190&type=chunk) - The initial application of IAS 21 (Amendment) 'Lack of Exchangeability' during this interim period did not have a significant impact on the Group's financial position and performance for the current and prior periods[191](index=191&type=chunk) [Revenue and Segment Information](index=52&type=section&id=%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group's total revenue for the reporting period was RMB 10,284,217 thousand, primarily from raw milk sales, with revenue recognized at a point in time, and the raw milk business contributing the majority of segment revenue and results Revenue from Contracts with Customers by Type of Goods (for the six months ended June 30) | Type of Goods | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Sales of raw milk | 7,895,650 | 7,320,419 | | Sales of feed | 2,074,100 | 2,436,934 | | Sales of dairy cattle supermarket consumables | 228,161 | 231,679 | | Sales of breeding products | 86,306 | 65,909 | | **Total** | **10,284,217** | **10,054,941** | - Revenue is recognized at a point in time[192](index=192&type=chunk) - Raw milk business generated **RMB 7,895,650 thousand** in revenue from external customers, while ruminant farming systematized solutions generated **RMB 2,388,567 thousand** from external customers[193](index=193&type=chunk) - Raw milk business segment results were **RMB 2,223,593 thousand**, and ruminant farming systematized solutions segment results were **RMB 161,661 thousand**[193](index=193&type=chunk) - All revenue is derived from customers located in mainland China, and all non-current assets are located in mainland China, thus no geographical information is presented[199](index=199&type=chunk) - Major customer A (Yili Group) contributed the majority of revenue, including sales of raw milk, feed, dairy cattle supermarket consumables, and breeding products[200](index=200&type=chunk) [Cost of Sales](index=56&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) The Group's total cost of sales for the reporting period increased by 3.8% to RMB 9,680,506 thousand, primarily due to growth in the raw milk business and fair value adjustments of agricultural produce, while the ruminant farming systematized solutions segment saw a decrease in cost of sales Cost of Sales Analysis (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of raw milk sold before fair value adjustment | 5,152,243 | 4,945,594 | | Fair value adjustment of raw milk | 2,491,292 | 2,134,191 | | Cost of raw milk sold after fair value adjustment | 7,643,535 | 7,079,785 | | Cost of feed sold before fair value adjustment of roughage and other agricultural produce | 1,801,342 | 2,029,233 | | Fair value adjustment of roughage and other agricultural produce | (8,573) | (12,167) | | Cost of feed sold after fair value adjustment | 1,792,769 | 2,017,066 | | Cost of dairy cattle supermarket consumables sold | 187,687 | 187,117 | | Cost of breeding products | 56,515 | 44,105 | | **Total cost of sales** | **9,680,506** | **9,328,073** | - Total cost of sales increased by **3.8%** from **RMB 9,328 million** in mid-2024 to **RMB 9,681 million** during the reporting period, mainly due to the growth in the raw milk business and the impact of fair value adjustments of agricultural produce[91](index=91&type=chunk) - Cost of raw milk sold before fair value adjustment increased by **4.2%**, primarily due to increased sales volume resulting from a larger number of lactating cows[92](index=92&type=chunk) - Cost of sales for ruminant farming systematized solutions decreased by **9.5%**, mainly due to lower sales volume and cost control[93](index=93&type=chunk) [Other Income](index=57&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) The Group's other income for the reporting period was RMB 153,112 thousand, a 42.2% decrease from mid-2024, primarily due to reduced government grants, subsidies, and interest income Other Income Analysis (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Government grants released from deferred income | 44,851 | 55,322 | | Award subsidies | 71,669 | 123,955 | | Rental income | 6,010 | 8,257 | | Bank interest income | 8,459 | 45,899 | | Interest income from Yili Group | 3,046 | 3,416 | | Income from disposal of scrap materials | 4,451 | 6,742 | | Compensation income | 4,232 | 13,253 | | Others | 10,394 | 8,094 | | **Total** | **153,112** | **264,938** | - Other income decreased by **42.2%** from **RMB 265 million** in mid-2024 to **RMB 153 million** during the reporting period, mainly due to a decrease in award subsidies and interest income[102](index=102&type=chunk) [Other Gains and Losses](index=57&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%8F%8A%E虧%E6%90%8D) The Group's other gains and losses for the reporting period significantly increased to a gain of RMB 11,090 thousand, primarily driven by higher gains from the disposal of property, plant and equipment and the reversal of provisions for litigation losses Other Gains and Losses Analysis (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net exchange differences | (1,518) | 203 | | Net gain/(loss) on disposal of property, plant and equipment | 4,892 | (725) | | Fair value gain on financial assets at fair value through profit or loss | 779 | 756 | | Gain/(loss) on termination of lease agreements | 849 | (190) | | Reversal of provision related to a civil lawsuit | 5,574 | – | | Others | 514 | 301 | | **Total** | **11,090** | **345** | - Other gains and losses increased from a gain of **RMB 0.3 million** in mid-2024 to a gain of **RMB 11 million** during the reporting period, mainly due to increased gains from the disposal of property, plant and equipment and the reversal of provisions for litigation losses[104](index=104&type=chunk) [Finance Costs](index=58&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) The Group's finance costs for the reporting period decreased by 14.8% to RMB 394,501 thousand, primarily due to lower interest on bank and other borrowings and increased amounts capitalized as construction in progress Finance Costs Analysis (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest on bank and other borrowings | 357,422 | 439,270 | | Interest on lease liabilities | 41,329 | 37,915 | | Discount unwinding of other provisions | 469 | 443 | | Less: Amount capitalized as construction in progress | (4,719) | (14,859) | | **Total** | **394,501** | **462,959** | - Finance costs decreased by **14.8%** from **RMB 463 million** in mid-2024 to **RMB 395 million** during the reporting period, primarily due to a reduction in the Group's financing interest rates[109](index=109&type=chunk) [Income Tax Expense](index=58&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) The Group's income tax expense for the reporting period decreased by 47.9% to RMB 32,801 thousand, mainly due to lower profits in the ruminant farming systematized solutions business, benefiting from agricultural exemptions, Western Development preferential tax rates, and local tax reductions Income Tax Expense Analysis (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | PRC corporate income tax | 37,167 | 63,834 | | Over-provision in prior periods | (747) | (722) | | Deferred tax | (3,619) | (127) | | **Total** | **32,801** | **62,985** | - Income tax expense decreased by **47.9%** from **RMB 63 million** in mid-2024 to **RMB 33 million** during the reporting period, primarily due to a decrease in profit from the Group's ruminant farming systematized solutions business[111](index=111&type=chunk) - Certain subsidiaries of the Company are exempt from PRC corporate income tax on taxable profits generated from agricultural operations in China[209](index=209&type=chunk) - Certain subsidiaries operating in China are eligible for a **15%** preferential tax rate under the Western Development preferential tax policy[209](index=209&type=chunk) - Dorbod Muquanyuanxing Feed Co., Ltd. has been eligible for a **40%** corporate income tax reduction since 2022[209](index=209&type=chunk) [Loss for the Period](index=59&type=section&id=%E6%9C%9F%E5%85%A7%E虧%E6%90%8D) The Group's loss for the period significantly narrowed to RMB 247,126 thousand, primarily due to increased raw milk sales, reduced per-kilogram cost of sales, lower finance costs, and a smaller loss from fair value changes of biological assets - The Group incurred a loss of **RMB 467 million** in mid-2024, which significantly narrowed to a loss of **RMB 247 million** during the reporting period[112](index=112&type=chunk) - The main reasons include increased gross profit due to higher raw milk sales volume and lower per-kilogram cost of sales; decreased finance costs; and a reduction in loss from changes in fair value less costs to sell of biological assets[112](index=112&type=chunk) Depreciation and Amortization for the Period (for the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 611,150 | 554,078 | | Depreciation of right-of-use assets | 109,300 | 103,541 | | Amortization of intangible assets | 1,791 | 1,634 | | **Depreciation and amortization directly charged to profit or loss** | **386,547** | **335,194** | - R&D costs recognized in profit or loss increased to **RMB 60,514 thousand** from **RMB 47,600 thousand** in mid-2024[210](index=210&type=chunk) - Total staff costs were **RMB 923,148 thousand**, and after deducting capitalization to biological assets, amounted to **RMB 699,594 thousand**[210](index=210&type=chunk) [Loss Per Share](index=60&type=section&id=%E6%AF%8F%E8%82%A1%E虧%E6%90%8D) The basic and diluted loss per share attributable to owners of the Company for the reporting period was RMB (0.08), a narrower loss compared to RMB (0.09) in mid-2024, with no diluted loss per share presented due to the absence of potential ordinary shares Loss Per Share (for the six months ended June 30) | Metric | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic | (0.08) | (0.09) | | Diluted | (0.08) | (0.09) | - The number of ordinary shares used to calculate basic and diluted loss per share was **3,892,728 thousand shares** for 2025 and **3,795,404 thousand shares** for 2024[212](index=212&type=chunk) - As there were no issued potential ordinary shares for the six months ended June 30, 2024 and 2025, diluted loss per share for both periods is not presented[212](index=212&type=chunk) [Dividends](index=60&type=section&id=%E8%82%A1%E6%81%AF) The Company neither paid, declared, nor proposed any dividends during this interim period, and the Board has decided not to pay a dividend for this period - The Company neither paid, declared, nor proposed any dividends during this interim period[213](index=213&type=chunk) - The Directors of the Company have decided not to pay a dividend for this interim period[213](index=213&type=chunk) [Property, Plant and Equipment and Right-of-Use Assets](index=60&type=section&id=%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99%E4%BB%A5%E5%8F%8A%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2) During this interim period, the Group's construction in progress increased by RMB 167,669 thousand for ongoing farm construction and capital improvements, while new lease agreements resulted in the recognition of RMB 5,331 thousand in right-of-use assets and RMB 4,883 thousand in lease liabilities - During this interim period, the Group's construction in progress increased by a total of **RMB 167,669 thousand**, used for ongoing farm construction and capital improvements[214](index=214&type=chunk) - At the commencement of leases, the Group recognized right-of-use assets of **RMB 5,331 thousand** and lease liabilities of **RMB 4,883 thousand**[214](index=214&type=chunk) [Goodwill](index=61&type=section&id=%E5%95%86%E8%AD%BD) The Group's goodwill had a carrying amount of RMB 672,014 thousand, primarily from the acquisitions of Saikexing Group in 2020 and Fonterra China Farms Group in 2021, with Saikexing Group's recoverable amount exceeding its carrying amount and no impairment signs for Fonterra China Farms Group's goodwill as of June 30, 2025 - Goodwill had a carrying amount of **RMB 672,014 thousand**[215](index=215&type=chunk) - Goodwill arose from the acquisition of Saikexing Group in 2020 (**RMB 762,741 thousand**) and the acquisition of Fonterra China Farms Group in 2021 (**RMB 30,239 thousand**)[215](index=215&type=chunk) - As of June 30, 2025, the recoverable amount of Saikexing Group exceeded its carrying amount by **RMB 38,442 thousand**[216](index=216&type=chunk) - Based on management's assessment, there were no indications that the goodwill of Fonterra China Farms Group had been impaired since its acquisition[216](index=216&type=chunk) [Biological Assets](index=62&type=section&id=%E7%94%9F%E7%89%A9%E8%B3%87%E7%94%A2) As of June 30, 2025, the Group's biological assets had a fair value of RMB 14,957,524 thousand, primarily comprising calves and heifers, mature cows, fattening cattle, breeding bulls, and dairy goats, with independent valuers assisting in the fair value assessment Fair Value of Biological Assets (as of June 30, 2025) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Calves and heifers | 6,142,225 | 6,294,224 | | Mature cows | 8,375,147 | 8,657,642 | | Fattening cattle | 185 | 250 | | Breeding bulls and others | 158,380 | 122,995 | | Dairy goats | 278,745 | 282,204 | | Breeding rams, young rams and ram lambs | 2,842 | 7,888 | | **Total** | **14,957,524** | **15,365,203** | - The Group has engaged JLL, an independent valuer, to assist in assessing the fair value of the Group's biological assets[218](index=218&type=chunk) [Trade Receivables](index=62&type=section&id=%E9%8A%B7%E5%94%AE%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, the Group's trade receivables (net of allowance for credit losses) amounted to RMB 753,931 thousand, with the majority falling within 90 days, and trade receivables from related parties totaling RMB 1,340,531 thousand Trade Receivables (net of allowance for credit losses) (as of June 30, 2025) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables | 862,705 | 766,343 | | Less: Allowance for credit losses | (108,774) | (74,700) | | **Total** | **753,931** | **691,643** | Aging Analysis of Trade Receivables (net of allowance for credit losses) (as of June 30, 2025) | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 90 days | 667,725 | 571,639 | | 91 to 180 days | 58,813 | 76,566 | | 181 days to 1 year | 22,975 | 32,730 | | Over 1 year | 4,418 | 10,708 | | **Total** | **753,931** | **691,643** | - Trade receivables from related parties amounted to **RMB 1,340,531 thousand**, with an aging within **90 days** from the

Group 1 - The core point of the article highlights that on September 4, a shareholder of Yuran Agriculture (09858) transferred shares from Goldman Sachs (Asia) Securities to HSBC Hong Kong, with a market value of HKD 648 million, accounting for 5.17% of the total shares [1] - Yuran Agriculture reported its interim results for the six months ending June 30, 2025, showing total revenue of RMB 10.284 billion, an increase of 2.28% year-on-year [1] - The company recorded a loss attributable to shareholders of RMB 297 million, which represents a narrowing of 10.37% compared to the previous year, with a basic loss per share of RMB 0.08 [1]

Group 1 - The core viewpoint of the article highlights the recent stock transfer of YouRan Agriculture (09858) from Goldman Sachs (Asia) Securities to HSBC, with a market value of HKD 648 million, representing 5.17% of the total shares [1] - YouRan Agriculture reported a collective revenue of RMB 10.284 billion for the six months ending June 30, 2025, reflecting a year-on-year increase of 2.28% [1] - The company recorded a shareholder loss of RMB 297 million, which is a 10.37% reduction compared to the previous year [1] - The basic loss per share is reported at RMB 0.08 [1]

Group 1 - The report highlights that SAIC Motor Corporation achieved a total revenue of 299.59 billion yuan in H1 2025, representing a year-on-year increase of 5.2%, while the net profit attributable to shareholders was 6.02 billion yuan, a decrease of 9.2% [4][5] - The company reported a significant increase in non-recurring net profit, which reached 5.43 billion yuan, up 432.2% year-on-year, indicating strong operational performance despite challenges [4][5] - The sales volume of SAIC Motor's vehicles in H1 2025 was 2.053 million units, an increase of 12.4% year-on-year, with a notable 40.2% increase in new energy vehicle sales [5][6] Group 2 - Shenzhou Taiyue's H1 2025 revenue was 2.685 billion yuan, down 12.05% year-on-year, with a net profit of 509 million yuan, reflecting a decline of 19.26% [11][12] - The gaming segment contributed 75.53% of total revenue, with a significant drop in revenue from major titles, indicating a need for new product launches to drive growth [12][13] - The company is expected to enter a three-year product cycle from 2025 to 2027, with multiple new games set to launch, which could enhance revenue streams [12][14] Group 3 - Lemon Film's H1 2025 revenue reached 401 million yuan, a remarkable increase of 108.5% year-on-year, with a net profit of 10.82 million yuan, compared to a loss in the previous year [17][18] - The growth was driven by overseas distribution and short drama business expansion, alongside effective cost control measures [18][19] - The company is positioned as a leader in the long drama industry, with strong content production capabilities and a focus on overseas and short drama markets [21][22] Group 4 - Jinshi Resources reported a revenue of 1.726 billion yuan in H1 2025, a year-on-year increase of 54.24%, primarily due to the release of production capacity in fluorochemical products [23][24] - The company faced a net profit decline of 24.74% due to operational challenges and increased costs associated with mining projects [24][25] - The strategic shift towards global resource integration is expected to yield long-term benefits, with projected revenues of 3.727 billion yuan in 2025 [27][28] Group 5 - Zhongke Chuangda's H1 2025 revenue was 3.299 billion yuan, up 37.44% year-on-year, with a net profit of 158 million yuan, reflecting a growth of 51.84% [29][30] - The smart IoT business saw a remarkable growth of 136%, becoming the fastest-growing segment, while the smart automotive and software businesses maintained steady expansion [30][31] - The company is expected to continue leading in the edge AI sector, with projected revenues of 6.533 billion yuan by 2027 [35] Group 6 - Sound Group Inc. achieved a total revenue of 1.358 billion yuan in H1 2025, a 46.9% increase year-on-year, with a net profit of 68 million yuan, marking a turnaround from losses [39][42] - The audio entertainment segment remains the core revenue driver, while AI-related services are expected to enhance growth potential [39][40] - The company is focusing on user engagement and content creation to improve monetization and user retention [41][42] Group 7 - Beautiful Field Medical Health reported a revenue of 1.459 billion yuan in H1 2025, a 28.2% increase year-on-year, with a net profit of 171 million yuan, reflecting a growth of 35.5% [44][45] - The growth was driven by an increase in active members and the expansion of health services, particularly in the sub-health sector [45][46] - The company is expected to maintain a strong growth trajectory, with projected revenues of 3 billion yuan by 2027 [46]

Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [2][7][8]. Core Insights - The company has demonstrated operational efficiency improvements and is positioned to benefit from a potential industry cycle reversal [2][4]. - In H1 2025, the company achieved revenue of 10.284 billion yuan, a year-on-year increase of 2.3%, and a net profit attributable to shareholders of -297 million yuan, reflecting a reduction in losses by 34 million yuan [4]. - The company is the largest upstream provider of dairy products and services in China, maintaining operational resilience amid significant industry pressures [7]. Financial Performance Summary - Revenue from raw milk business reached 7.896 billion yuan in H1 2025, up 7.9% year-on-year, driven by improved productivity and optimized herd structure [4]. - The average price of raw milk was 3.87 yuan per kilogram, down 7% year-on-year, while the average feed cost for high-quality fresh milk was 1.91 yuan per kilogram, down 12% [4]. - The company’s cash EBITDA for H1 2025 was 2.811 billion yuan, reflecting a year-on-year increase of 7.1% [5]. Future Projections - The company is projected to achieve revenues of 20.953 billion yuan, 22.331 billion yuan, and 23.922 billion yuan for the years 2025, 2026, and 2027, respectively, with growth rates of 4% and 7% [6][7]. - Net profit attributable to shareholders is expected to be 340 million yuan, 1.256 billion yuan, and 2.153 billion yuan for the same years, with significant growth rates of 149%, 269%, and 71% [6][7]. - The report anticipates an improvement in return on equity (ROE) from -6% in 2024 to 14% by 2027 [8].

Group 1 - The core viewpoint of the article indicates that YouRan Dairy (09858) experienced a decline of over 5%, with a current price of HKD 3.51 and a trading volume of HKD 685 million [1] - YouRan Dairy reported interim results for the six months ending June 30, 2025, with revenue of RMB 10.284 billion, reflecting a year-on-year increase of 2.28% [1] - The company recorded a loss attributable to shareholders of RMB 297 million, which is a 10.37% reduction compared to the previous year, with a basic loss per share of RMB 0.08 [1] Group 2 - The announcement highlighted that the domestic raw milk supply and demand are experiencing a phase imbalance, leading to a decline in raw milk prices, with an average price of RMB 3.87 per kilogram, down 7.0% from RMB 4.16 per kilogram in the mid-2024 period [1] - Huatai Securities noted that the revenue performance of dairy products in the first half of 2025 is lackluster, with overall liquid milk demand remaining weak; however, current channel inventory levels are reasonable, and there is an expectation for demand recovery, particularly during the upcoming Mid-Autumn Festival and National Day holiday peak seasons [1]

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].