Milkground(SH:600882) Xin Lang Cai Jing·2025-07-12 12:32Core Viewpoint - The company is expected to achieve significant growth in net profit and operating performance in the first half of 2025, driven by effective cost control and the acceleration of domestic raw material substitution [1][3]. Financial Performance - For the first half of 2025, the company anticipates a net profit attributable to shareholders of 120-145 million yuan, representing a year-on-year increase of 56.3% to 88.9% [1]. - The expected net profit for the second quarter of 2025 is projected to be between 38-63 million yuan, with a year-on-year growth of 13.8% to 89.4% [1]. - The company confirmed a share-based payment expense of 18.687 million yuan in Q2 2025, while also increasing expenses in e-commerce channels [1]. Market and Product Development - The cheese market in China is showing signs of stabilization, with a 5% year-on-year decline in retail cheese market size, but a 2% quarter-on-quarter increase [2]. - The demand for industrial cheese products has been growing since 2022, with B-end cheese sales accounting for 70% of the total market in 2024, presenting growth opportunities [2]. - The company is enhancing its product matrix with new cheese products and focusing on upgrading existing products [2]. Profitability and Cost Management - The company expects a significant increase in gross margin for the first half of 2025, primarily due to the accelerated domestic substitution of key raw materials [3]. - The company is also working on the production and research of whey products, which are expected to contribute to revenue and reduce overall costs by the end of the year [3]. - The company has been strictly controlling sales expenses while improving the efficiency of expense allocation [3]. Earnings Forecast and Valuation - The company is optimistic about its continuous investment in cheese product development and raw material substitution, which is expected to release growth momentum [4]. - The earnings per share (EPS) forecast for 2025-2027 has been raised to 0.57, 0.72, and 0.83 yuan, reflecting an increase of 11%, 10%, and 10% respectively [4]. - The target price has been adjusted to 31.90 yuan, corresponding to a price-to-earnings (PE) ratio of 56x for 2025 [4].