Group 1 - The core viewpoint of the report is that the company maintains a "buy" rating for Modern Dairy (01117), expecting EPS of 0.05 and 0.19 yuan per share for 2026 and 2027 respectively, benefiting from the reversal of the meat and milk cycle [1] - The company is progressing with the acquisition of China Shengmu, having signed an irrevocable voting proxy agreement on October 30, and plans to acquire 1.28% of Shengmu shares for 37.52 million HKD, which will trigger a mandatory general offer [2] - The acquisition will integrate upstream resources from the major shareholder Mengniu, enhancing scale effects, with the total herd size expected to exceed 610,000 heads and raw milk production to surpass 4 million tons [3] Group 2 - The dairy cow inventory is accelerating its reduction due to ongoing financial pressures and a decrease in heifer restocking, with the impact expected to manifest monthly [4] - The Ministry of Commerce has announced preliminary rulings on anti-subsidy investigations against dairy products from the EU, imposing temporary anti-subsidy tax guarantees, which is expected to accelerate domestic substitution in the dairy processing industry [4]