Investment Rating - The report maintains a "Recommended" rating for the food and beverage industry, particularly highlighting opportunities in the liquor sector and food products [1] Core Insights - The liquor industry is undergoing extreme pressure testing, with a significant focus on inventory clearance and bottoming out of financial reports. The second quarter has shown weak demand due to seasonal factors and regulatory impacts, leading to a notable decline in sales and pricing pressures [5][10] - High-end liquor brands like Moutai are expected to maintain growth, while mid-tier brands face challenges with declining revenues and profits. The overall industry is in a deep clearance phase, with potential for recovery as regulations stabilize [5][12] - The consumer goods sector shows mixed performance, with snacks and beverages remaining strong, while other segments like frozen foods and chain restaurants face ongoing demand pressures [20][25] Summary by Sections 1. Liquor Sector - The liquor industry is experiencing extreme pressure, with weak demand in the second quarter and significant inventory levels. Major brands like Moutai and Wuliangye are expected to show modest growth, while others like Yanghe and Luzhou Laojiao are facing declines [5][11][12] - Moutai's revenue is projected to grow by 7% in Q2, while Wuliangye is expected to see a 1% increase. In contrast, brands like Yanghe and Luzhou Laojiao are forecasted to decline by 35% and 8% respectively [11][12] 2. Consumer Goods - The overall demand for consumer goods remains weak, but segments like snacks and beverages are performing well. For instance, East Peak is expected to see a 33% increase in revenue, while other snack brands are also showing positive trends [20][25] - The beverage sector is projected to see positive growth, with major brands like Qingdao Beer and Yanjing expected to report increases in revenue and profit [25][26] 3. Investment Recommendations - The report suggests focusing on high-performing stocks in the short term while considering long-term investments in liquor brands that are currently at their bottom. Brands like Moutai and Gujing are recommended for their lower risk profiles [7][8] - For consumer goods, companies like Anqi and East Peak are highlighted for their growth potential, while traditional dairy brands like Yili and Mengniu are suggested for a bundled investment approach [7][8]

Investment Rating - The report maintains an "Accumulate" rating for the industry [6] Core Insights - The current state of China's raw milk and beef industries is at the bottom of the cycle, with the dairy industry gradually clearing capacity towards a balance in supply and demand [1] - The beef industry has seen a price recovery, with live cattle prices rebounding since February 2025, driven by reduced imports and a tightening supply [2] - The report indicates that the dairy cycle's darkest moment is expected to end within 1.5 years, with signs of marginal improvement in the first half of 2025 [1] Summary by Sections Raw Milk Industry - As of July 10, 2024, the price of fresh milk is 3.04 CNY/kg, down 6.17% year-on-year, with over 90% of the dairy industry experiencing losses [1] - The China Dairy Association forecasts a 4.5% year-on-year decrease in dairy cow inventory for 2024, with further price declines expected in 2025 [1] - There are indications of a narrowing decline in raw milk prices in the first half of 2025, with a significant reduction in milk powder spray volume [1] Beef Industry - The beef industry is entering a replenishment phase, with a 2.9% growth in cattle inventory in 2023, but a projected 4.4% decline in 2024 [2] - Live cattle prices and market averages have increased by 8.3% and 7.4% respectively since February 2025 [2] - The industry is experiencing a culling cycle for breeding cows, leading to a decrease in the number of calves born [2] Company Performance YouRan Agriculture - In 2024, YouRan achieved revenue of 20.1 billion CNY, a year-on-year increase of 7.5%, with fresh milk production rising by 24.1% to 3.747 million tons [3] - Despite a decrease in average selling price of fresh milk to 4.1 CNY/kg, the company managed to improve its gross margin [3] - The company reported a loss of 690 million CNY for the year due to declining raw milk and beef prices [3] Modern Farming - Modern Farming's revenue decreased by 1.5% year-on-year to 13.25 billion CNY, with fresh milk production increasing by 13.6% [4] - The average selling price of fresh milk fell by 10.3% to 3.6 CNY/kg, resulting in a loss of 1.47 billion CNY for the year [4] - Future price increases in milk and beef are expected to positively impact the company's core business [4] China Shengmu - China Shengmu reported a revenue decline of 7.6% to 3.13 billion CNY in 2024, with fresh milk sales price down by 6.1% [7] - The company is positioned to benefit from the rising beef prices due to its dual focus on dairy and beef production [7] Tianrun Dairy - Tianrun's revenue for 2024 is projected at 2.8 billion CNY, a 3.3% increase, but net profit is expected to drop by 69.3% due to losses from cattle disposal [8] - The company is expected to improve its operations as it reduces cattle disposals in subsequent quarters [8]

Core Viewpoint - Despite facing challenges such as declining raw milk prices, oversupply of milk sources, and intensified market competition, Tianrun Dairy's performance remains under pressure, with a projected net loss for the first half of 2025 [1] Financial Performance - Tianrun Dairy expects a net loss of between 26 million to 18 million yuan for the first half of 2025, primarily due to increased disposal of low-yield dairy cows, losses from bulk milk powder sales, and impairment provisions for biological assets [1] - In the first quarter of 2025, the company's revenue decreased by 2.5% year-on-year to 625 million yuan, with a net profit turning into a loss of 73.3 million yuan, a decline of 1713.36% [2] - The company reported a non-recurring net profit of between 46 million to 67 million yuan for the first half of 2025, indicating potential recovery in profitability starting from the second quarter [1] Inventory and Impairment - Tianrun Dairy has faced significant inventory impairment pressures, particularly related to milk powder, leading to multiple impairment provisions totaling approximately 10.7 million yuan over various periods [3][4] - The company has been actively reducing its dairy cow population, with the number of cows culled in the first quarter of 2025 reaching 8,500, averaging about 94.4 cows disposed of daily [5] Market Strategy and Sales - Despite a decline in revenue from main products, overall sales volume increased by 12.37% year-on-year to 74,500 tons in the first quarter of 2025, attributed to increased marketing expenditures [6] - Tianrun Dairy aims to achieve a sales target of 310,000 tons of dairy products and set a revenue goal of 3 billion yuan for 2025, reflecting cautious optimism amid ongoing industry challenges [7] Acquisition Impact - The acquisition of Xin Nong Dairy for 326 million yuan has not yielded the expected benefits, with the subsidiary contributing a loss of 95.35 million yuan to Tianrun Dairy's profits in 2023 [8] - Xin Nong Dairy's performance has been disappointing, with a net loss of 81.36 million yuan in 2024, attributed to inventory impairments and cow disposal issues [8] Future Outlook - The company faces significant uncertainty regarding its ongoing projects, including the expansion of dairy farms, which have been delayed, leading to an impairment provision of approximately 1.03 million yuan [10]

Core Viewpoint - Tianrun Dairy is facing significant financial challenges, with a projected net loss for the first half of 2025, attributed to oversupply of raw milk, increased market competition, and high depreciation costs resulting from previous expansion efforts [1][2]. Financial Performance - Tianrun Dairy's net profit has declined sharply from 197 million yuan in 2022 to 43.66 million yuan in 2024, and is expected to turn into a loss this year [1][2]. - The company reported a net loss of 73.30 million yuan in Q1 2024, with an estimated profit of 47.30 million to 55.30 million yuan in Q2, indicating a potential turnaround [2]. - The company's non-recurring net profit for 2024 has decreased by 45.78% year-on-year, suggesting ongoing performance challenges [2]. Market Conditions - The price of fresh milk remains low at 3.07 yuan per kilogram, with expectations of continued low prices due to oversupply despite a decrease in dairy cow inventory [2]. - Raw milk prices have dropped nearly 30% over the past three years, primarily due to stagnant growth in the dairy market and oversupply from previous expansions [2][3]. Expansion Strategy - Tianrun Dairy has pursued aggressive expansion, including a 990 million yuan convertible bond issuance aimed at increasing production capacity by 20,000 tons, which represents a 57% increase over its existing capacity of 35,120 tons [3]. - The company has also engaged in acquisitions, such as the full acquisition of Xin Nong Dairy, which adds another 10,000 tons of production capacity [3]. Capacity Utilization - The company's capacity utilization rate has declined from 80.93% in 2023 to 70.06% in the first half of 2024, raising concerns about the efficiency of new investments [4]. - Despite a slight increase in sales volume from 267,900 tons in 2022 to 297,400 tons in 2024, the growth is primarily attributed to acquisitions, with organic growth stagnating [4]. Financial Health - As of 2024, Tianrun Dairy's fixed assets reached 2.56 billion yuan, a 142% increase since 2020, while revenue grew only 59%, leading to a 70% decline in net profit [5]. - The company's debt ratio has risen to 57.27% in 2024, with short-term debts exceeding cash reserves, indicating potential liquidity issues [6]. Product Performance - Revenue growth for Tianrun Dairy has slowed significantly, with a mere 3.33% increase in 2024 and a 2.5% decline in Q1 2025 [6]. - The company has experienced a decline in revenue from long-life products, which were previously a key growth driver, raising concerns about future revenue generation [6]. Debt Management - The issuance of convertible bonds in October 2024 has alleviated some financial pressure, but has also led to a 107.59% increase in financial expenses due to interest payments [6]. - The low conversion rate of the convertible bonds, with only 11,500 yuan converted by June 30, 2025, highlights challenges in optimizing the company's debt structure [7].

新疆天润乳业股份有限公司 | | | 新疆天润乳业股份有限公司关于 关于控股股东减持公司可转换公司债券的公告 一、股东配售可转债的情况 根据中国证券监督管理委员会《关于同意新疆天润乳业股份有限公司向不特 定对象发行可转换公司债券注册的批复》（证监许可〔2024〕899 号），公司于 2024 年 10 月 24 日向不特定对象发行了 990.00 万张可转换公司债券，每张面值 100 元，发行总额 99,000.00 万元，发行期限 6 年。经上海证券交易所自律监管 决定书〔2024〕149 号文同意，公司本次发行的 99,000.00 万元可转换公司债券 于 2024 年 11 月 15 日在上海证券交易所上市交易，债券简称"天润转债"，债 券代码"110097"。 公 司 控 股 股 东 国 资 公 司 通 过 优 先 配 售 认 购 天 润 转 债 307,890,000 元 （3,078,900 张），占发行总量的 31.10%。 1 新疆天润乳业股份有限公司 二、可转债减持情况 2025 年 7 月 15 日，公司收到国资公司通知，2025 年 6 月 26 日至 2025 年 7 月 15 日期间 ...

Group 1 - The controlling shareholder of Tianrun Dairy, Xinjiang Production and Construction Corps 12th Division State-owned Assets Investment Development Group Co., Ltd., reduced its holdings of the company's convertible bonds by 1.0161 million units, accounting for 10.26% of the total issuance [1] - After the reduction, the state-owned company holds 2.0628 million units of Tianrun convertible bonds, representing 20.84% of the total issuance [1] - The company issued 9.9 million units of convertible bonds on October 24, 2024, with a face value of 100 yuan per unit, totaling 990 million yuan, with a maturity period of 6 years [1]

Market Overview - The A-share market shows mixed performance with the Shanghai Composite Index closing at 3519.65, up 0.27% [2][4] - The Shenzhen Component Index decreased by 0.11%, while the ChiNext Index fell by 0.45% [2][4] - The overall market sentiment remains cautious with a focus on the electric power sector, which has shown strength recently [4][11] Economic Indicators - In the first half of 2025, China's total goods trade reached 21.79 trillion yuan, a year-on-year increase of 2.9% [18][19] - The total value of exports was 13 trillion yuan, growing by 7.2%, while imports decreased by 2.7% to 8.79 trillion yuan [19][20] - The People's Bank of China reported an increase of 12.92 trillion yuan in RMB loans during the same period [20][21] Industry Dynamics - The EVTank report indicates that in 2024, Chinese companies dominated the global high-rate battery market, occupying eight out of the top ten positions [30] - The construction of the largest 750 kV ring network project in China has been completed, enhancing power supply capabilities in the Xinjiang region [34] - The photovoltaic industry is undergoing a transformation with efforts to reduce "involution" and improve overall market conditions [62] Company Performance - KingMed Diagnostics (603882.SH) is expected to report a net loss of 0.65 billion to 0.95 billion yuan for the first half of 2025, a significant decline from a profit of 0.90 billion yuan in the previous year [36] - Zhongji United (605305.SH) anticipates a net profit of 0.25 billion to 0.30 billion yuan, reflecting a growth of 78.02% to 113.63% year-on-year [37] - JiuLi Special Materials (002318.SZ) is set to enhance its production capabilities with a new high-tech seamless steel pipe production line [40] Financial Performance - Youfu Co., Ltd. (002427.SZ) expects to turn a profit in the first half of 2025, with a net profit forecast of 10 million to 15 million yuan [44] - MiaoKe LanDuo (60882.SH) projects a net profit increase of 56% to 89% for the first half of 2025, driven by rising cheese product sales [46] - Shengyi Technology (688183.SH) anticipates a staggering net profit growth of 432% to 471% for the same period, attributed to strategic product optimization [55]

Group 1 - The core viewpoint of the article highlights that Tianrun Dairy's short-term performance improvement is primarily reliant on non-recurring gains, while the core business still faces significant industry pressures [1][2] - In the first half of the year, Tianrun Dairy's net profit attributable to shareholders is projected to be between -18 million to -26 million yuan, showing a slight reduction in losses compared to -27.91 million yuan in the same period last year [1] - The expected non-recurring net profit is estimated to be between 46 million to 67 million yuan, representing a significant year-on-year increase [1] Group 2 - The challenges faced by Tianrun Dairy reflect common issues within the domestic dairy industry, with national dairy product consumption growth at only 1.8% in the first half of 2025, marking one of the lowest levels in recent years [2] - Despite leveraging its milk source advantages in Xinjiang and launching innovative products, Tianrun Dairy still encounters fierce competition from leading companies like Yili and Mengniu in expanding markets [2] - Rising costs due to fluctuations in feed prices and increased environmental investments continue to pressure the company's profitability, despite a high self-sufficiency rate of over 90% in milk sources [2] Group 3 - In response to these challenges, the company aims to enhance sales, improve quality, and optimize costs through product structure upgrades, supply chain digitization, and refined management of dairy farming [3] - The effectiveness of these strategic initiatives will require time to validate [3]

Investment Rating - The report maintains an "Increase" rating for the food and beverage industry, indicating a positive outlook for selected companies within the sector [4]. Core Insights - The report highlights a significant differentiation within the industry, particularly in the liquor segment, where companies are actively seeking transformation amid market pressures. It emphasizes three main investment themes: leading brands, high-certainty regional brands, and flexible companies benefiting from recovery [1][2]. - In the beer and beverage sector, companies like Yanjing and Zhujiang are expected to show strong profit growth, with Yanjing projected to achieve a net profit of 1.06 to 1.14 billion yuan, reflecting a year-on-year increase of 40% to 50% [3]. Summary by Sections Liquor Industry - The liquor industry is experiencing a challenging half-year, with demand and policy impacts leading to a slowdown in sales. The report anticipates that the performance expectations for the mid-year and the entire year of 2025 have been largely adjusted [2]. - Key players like Kweichow Moutai and Wuliangye are focusing on service enhancement and transformation strategies to navigate the current market conditions. The report suggests that the upcoming month of September will be critical for assessing the impact of policies and consumer demand [2]. Beer and Beverage Sector - Yanjing Beer is expected to achieve a net profit of 1.06 to 1.14 billion yuan for the first half of 2025, marking a year-on-year increase of 40% to 50%. Zhujiang Beer is also projected to see a profit increase of 15% to 25% [3]. - Eastroc Beverage is forecasted to generate revenue of 10.63 to 10.84 billion yuan, with a net profit of 2.31 to 2.45 billion yuan, reflecting a growth of 33% to 42% year-on-year [3]. Consumer Goods - The report notes that companies like Youyou Foods and Miaokelando are expected to report significant profit increases, with Youyou Foods projecting a revenue growth of 40.91% to 50.77% [7]. - The overall consumer goods sector is highlighted as a space to watch for growth, particularly for companies that are innovating and expanding their market reach [7].

Core Viewpoint - Xinjiang Tianrun Dairy Co., Ltd. is forecasting a net loss for the first half of 2025, with expected losses between 26 million yuan and 18 million yuan, while also projecting a net profit (excluding non-recurring losses) between 46 million yuan and 67 million yuan [2][3]. Group 1: Performance Forecast - The company anticipates a net profit attributable to shareholders of the parent company for the first half of 2025 to be between -26 million yuan and -18 million yuan, indicating a reduction in losses compared to the previous year [2][3]. - The expected net profit attributable to shareholders of the parent company, after excluding non-recurring losses, is projected to be between 46 million yuan and 67 million yuan [2]. Group 2: Previous Year Comparison - In the same period last year, the company reported a total profit of -44.04 million yuan, with a net profit attributable to shareholders of the parent company at -27.91 million yuan, and a net profit of 2.39 million yuan after excluding non-recurring losses [3]. - The earnings per share for the previous year was -0.0885 yuan [3]. Group 3: Reasons for Performance Decline - The anticipated performance decline is attributed to several factors: increased disposal of low-yield dairy cows leading to higher losses, losses from the sale of bulk milk powder, accounting provisions for biological asset impairment, and increased market investment support [3].