Core Viewpoint - The dairy sector continues to show strong performance, driven by new government policies aimed at boosting infant formula consumption and improving the overall dairy market conditions by 2025 [1] Group 1: Market Performance - As of the report, China Shengmu (01432) increased by 9.09% to HKD 0.48, YouRan Dairy (09858) rose by 3.53% to HKD 4.4, Mengniu Dairy (02319) gained 1.46% to HKD 16.67, and Ausnutria (01717) climbed 1.19% to HKD 2.55 [1] Group 2: Policy Impact - On July 28, the "Implementation Plan for the Childcare Subsidy System" was released, which will provide an annual subsidy of HKD 3,600 per child for families with children under three years old starting January 1, 2025 [1] - This policy is expected to benefit over 20 million families with infants, likely leading to increased consumption of dairy products, particularly infant formula [1] Group 3: Industry Outlook - Guosen Securities is optimistic about a reversal in the beef cycle by 2025, predicting that meat prices will continue to rise until 2027 [1] - The domestic raw milk supply and demand situation is expected to improve in the second half of 2025, with prices likely to recover [1] - For dairy farming companies, the improvement in raw milk prices is anticipated to enhance main business profitability, while the upward trend in the beef cycle may significantly increase profits from culling dairy cows and selling calves [1] - Companies such as YouRan Dairy, Modern Dairy, and China Shengmu are recommended due to their high performance recovery potential in the context of dairy and beef market synergy [1]