智通财经网·2025-09-09 06:53Core Viewpoint - The report from China Galaxy Securities indicates that the average price of fresh milk in major production areas remained low at 3.02 yuan/kg in August, with a low likelihood of further price declines. This price level is expected to be the bottom of the current fresh milk price cycle, with potential for gradual stabilization and recovery in the future [1][2]. Group 1: Supply Side Analysis - The current milk price level has led many domestic dairy farms into cash flow losses, which will sustain the trend of industry capacity reduction. The pace of capacity reduction is expected to accelerate, especially with the upcoming silage procurement season in September and October, which will impose significant financial pressure on farms already facing cash flow challenges [1][2]. - Weak financial strength and risk resistance among some farms may lead them to further cull low-yield cows, reduce breeding scale, or even exit the market, directly accelerating the industry's capacity reduction process. This gradual contraction in supply will provide crucial support for the stabilization of fresh milk prices [2]. Group 2: Demand Side Analysis - Overall demand for dairy products remains weak, with a cumulative year-on-year decrease of 1% in dairy product output from January to July, and August is expected to remain stable. In the liquid milk sector, the consumption structure shows significant differences, with ambient milk experiencing notable weakness in demand due to changing consumer habits and intensified market competition [3]. - Conversely, low-temperature milk and yogurt are showing growth in sales due to their freshness and nutritional value, becoming bright spots in the liquid milk market. However, their market share is still relatively limited and has not yet formed a scale effect sufficient to reverse the overall market dynamics of liquid milk [3]. - Cheese consumption is experiencing good growth, with a cumulative year-on-year increase of 12% in cheese imports from January to July, driven primarily by increased penetration in the catering sector [3]. Group 3: Investment Recommendations - The report recommends focusing on the upstream dairy industry for potential cyclical reversal opportunities, specifically suggesting Yuran Dairy (09858). For the downstream sector, it recommends New Dairy (002946.SZ) in the low-temperature liquid milk field and Miaokelando (600882.SH) as a leading cheese producer. Additionally, H&H International Holdings (01112), which has a heavy overseas debt burden, is noted as a beneficiary of potential interest rate cuts by the Federal Reserve [4].