Ge Long Hui·2025-09-09 19:12Core Viewpoint - The company reported a decline in revenue and net profit for H1 2025, primarily due to increased losses from joint ventures, particularly from Modern Dairy, which significantly impacted the overall profitability [1][2]. Financial Performance - The company's revenue for H1 2025 was 41.567 billion yuan, a year-on-year decrease of 6.9%, while the net profit attributable to shareholders was 2.046 billion yuan, down 16.4% [1]. - The losses from joint ventures amounted to 585 million yuan, with Modern Dairy contributing 545 million yuan to this loss [1][2]. - Excluding these impacts, the core business showed robust profitability with operating profit reaching 3.538 billion yuan, an increase of 13.4% year-on-year, and the operating profit margin improved by 1.5 percentage points to 8.5% [1][2]. Product Performance - Liquid milk revenue for H1 2025 was 32.192 billion yuan, down 11.2%, while fresh milk performed well with double-digit growth [2]. - Ice cream revenue increased by 15.0% to 3.879 billion yuan, driven by product innovation and channel expansion, with the AIXUE brand maintaining the top market share in Indonesia [2]. - Cheese revenue reached 2.374 billion yuan, up 12.3%, with the Miaokelan brand holding over 38% market share [2]. - Milk powder revenue was 1.676 billion yuan, a 2.5% increase, with the Bellamy brand focusing on high-end products and expanding in Southeast Asia [2]. Cost Management - The gross profit margin improved by 1.4 percentage points to 41.7%, attributed to declining raw milk prices and effective cost control measures, with selling expense ratio decreasing by 0.5 percentage points to 27.9% [2]. - The decline in net profit was mainly due to non-operating factors, including the significant losses from joint ventures and the absence of one-time gains from the previous year [2]. Future Outlook - The company demonstrated strong operational resilience by optimizing product structure and enhancing operational efficiency amid weak industry demand [3]. - With stabilized raw milk prices and potential improvements in supply-demand dynamics, price competition may ease, allowing for further recovery in profitability for leading dairy companies [3]. - The company is expected to continue driving product innovation, channel refinement, and digital transformation for sustainable long-term growth, with projected net profits of 4.24 billion yuan and 5.27 billion yuan for 2025 and 2026, respectively, corresponding to PE ratios of 13 and 10 times [3].