Ge Long Hui·2025-08-29 03:02Core Viewpoint - The company reported a decline in revenue for H1 2025, primarily due to weak demand in the ambient milk segment, while other product categories like infant formula, ice cream, and cheese showed positive growth [1] Financial Performance - H1 2025 revenue reached 41.567 billion yuan, a year-on-year decrease of 6.95% [1] - Operating profit was 3.538 billion yuan, an increase of 13.43% year-on-year [1] - Net profit attributable to shareholders was 2.046 billion yuan, down 16.37% year-on-year [1] Segment Analysis - Liquid milk revenue was 32.19 billion yuan, down 11.2% year-on-year, with ambient milk facing ongoing pressure due to weak demand and increased competition [1] - Fresh milk business experienced double-digit growth, significantly outperforming the industry [1] - Infant formula revenue was 1.68 billion yuan, up 2.5% year-on-year, driven by an increase in newborn numbers [1] - Ice cream revenue reached 3.88 billion yuan, up 15% year-on-year, benefiting from a low base last year [1] - Cheese revenue was 2.37 billion yuan, up 12.3% year-on-year, with product innovation and channel adjustments showing positive results [1] - Other businesses generated 1.45 billion yuan, up 12.4% year-on-year [1] Cost and Profitability - The company benefited from a decrease in raw milk prices, achieving a gross margin of 41.75%, an increase of 1.48 percentage points year-on-year [1] - Operating profit margin was 8.51%, up 1.53 percentage points year-on-year [1] - Profit margins for liquid milk, ice cream, infant formula, and cheese segments improved, with respective margins of 8.0%, 15.8%, 5.6%, and 9.6% [1] Future Outlook - Revenue pressure is expected to continue in H2 2025, but profitability may improve due to controlled expenses and ongoing cost benefits [2] - The company anticipates a gradual stabilization of raw milk prices as upstream capacity clears [2] - EPS forecasts for 2025-2027 have been adjusted to 1.16, 1.36, and 1.56 yuan, respectively, with a target PE of 17 times for 2025, corresponding to a target price of 21 HKD [2]