BRIGHT DAIRY(SH:600597) Xin Lang Cai Jing·2025-12-23 00:57Core Insights - Bright Dairy has completed the acquisition of the remaining 40% stake in Qinghai dairy company Xiaoxiniu for 500 million yuan, aiming to strengthen its product matrix amid declining performance over the past three years [2][4] - The company is experiencing significant pressure, particularly in its home market of Shanghai, where sales have dropped by 4% year-on-year in the first three quarters of 2025 [7][9] - Despite the decline in revenue, executive compensation, including that of Chairman Huang Liming, has doubled from 867,700 yuan in 2022 to 1,728,700 yuan in 2024 [14][15] Acquisition Details - The acquisition of Xiaoxiniu will make it a wholly-owned subsidiary, following a previous purchase of 60% of its shares for over 600 million yuan in 2021, which included performance-based agreements [4] - Xiaoxiniu specializes in a range of dairy products, with a particular strength in yogurt, which Bright Dairy aims to leverage to improve its market position [4][6] Financial Performance - Bright Dairy's revenue for the first three quarters of 2025 was 18.231 billion yuan, a decrease of 0.99% year-on-year, with net profit falling by 25.05% to 87 million yuan [7] - The company's liquid milk revenue dropped by 8.57% to 10.146 billion yuan, while other dairy products saw a 9.91% increase [8] - The overall trend shows a continuous decline in revenue over the past three years: 28.215 billion yuan in 2022 (down 3.39%), 26.485 billion yuan in 2023 (down 6.13%), and 24.278 billion yuan in 2024 (down 8.33%) [14] Market Challenges - Bright Dairy is facing intense competition from national giants like Yili and Mengniu, which are eroding its market share, particularly in the fresh milk segment [13] - The company has reduced its focus on markets outside of Shanghai and East China, aiming to control profit losses [10][13] - The company’s products have low visibility and recognition in regions like Southwest China, where local consumers prefer competitors' brands [10][11] Strategic Initiatives - Bright Dairy has attempted to innovate and diversify its product offerings through collaborations with brands like Manner Coffee and Da Bai Tu, but has yet to see significant success in reversing its declining performance [16]