3 6 Ke·2025-05-08 09:50Core Insights - The Chinese dairy industry is undergoing significant transformation due to declining demand and oversupply, prompting urgent structural changes [2][3] Demand and Supply Dynamics - Major dairy companies like Yili and Mengniu are experiencing revenue declines, with Yili facing its first revenue drop in nearly 20 years and Mengniu seeing double-digit declines [1][11] - The liquid milk segment is particularly affected, with Yili and Mengniu's sales dropping by approximately 10 billion yuan each, equivalent to the annual revenue of a second-tier dairy company [1] - The supply side is also under pressure, with reports of "culling cows" due to raw milk prices hitting a 15-year low, severely impacting farm operations [1][3] Raw Milk Price Trends - Raw milk prices have been declining for over 40 months, with the current price at 3.08 yuan per kilogram, significantly below the breakeven point for most farms [3][6] - The oversupply situation is exacerbated by increased production, with national milk output reaching 41.97 million tons in 2023, a 6.7% year-on-year increase [6] - The industry is facing a negative cycle of upstream losses, capacity elimination, and supply imbalance, with over 80% of the industry experiencing losses [6][8] Financial Performance of Major Players - Yili's revenue for 2024 is projected at 115.4 billion yuan, an 8.24% decline, with net profit dropping by 18.94% to 8.45 billion yuan [11] - Mengniu's revenue is expected to be 95.4 billion yuan, down 10.09%, with net profit plummeting by 97.83% to 113 million yuan [11] - The liquid milk segment remains the largest category, accounting for 44% of total dairy consumption, but is experiencing a downward sales trend [11] Consumer Behavior and Market Trends - The decline in dairy consumption is not due to reduced volume but rather falling prices, with Yili's liquid milk sales volume increasing by 2.1% despite revenue losses [12][13] - The market is witnessing a "consumption stratification," where high-end dairy products continue to perform well despite overall price declines [16][18] - Low-temperature fresh milk is emerging as a fast-growing segment, with a market size of 39.2 billion yuan in 2023 and a compound annual growth rate of 5.5% from 2018 to 2023 [17] Opportunities for Second-Tier Brands - The popularity of fresh milk and health-oriented products is creating new opportunities for second-tier dairy companies [23] - Local brands with strong cold chain capabilities are challenging national giants in the fresh milk market, as seen with companies like Guangming Dairy and New Dairy [24] - The shift towards value competition and structural consumption upgrades is driving the industry from scale expansion to specialization [25]