奶价本轮下跌较多，预计明年有望企稳

Investment Rating - The industry is rated as "Outperform" [6][10][11] Core Insights - The dairy industry is currently experiencing a downturn in raw milk prices, which are expected to stabilize by Q2 2025, leading to improvements in various aspects for dairy companies [10][11][12] - The industry has entered a mature phase characterized by a stable market structure dominated by leading companies like Yili and Mengniu, alongside strong regional players [11][12] - Demand has weakened since 2022, with a notable drop in per capita dairy consumption from 14.4 kg in 2021 to 12.4 kg in 2022, indicating a potential shift to a mature market phase [9][11][12] Summary by Sections Current Stage and Issues in the Dairy Industry - The dairy industry has evolved through five stages since 1980, with the current phase being one of maturity [9][16] - The market is primarily dominated by Yili and Mengniu, which together hold a 56.1% market share [9][11] - The industry faces challenges from oversupply and declining raw milk prices, which have fallen from a peak of 4.38 yuan/kg in 2021 to 3.22 yuan/kg by July 2024, a decrease of 26.48% [10][11][12] Characteristics of Raw Milk Production - Raw milk production is characterized by a two-year lead time for dairy cows to start producing milk, making investment predictions challenging [9][10] - Feed costs account for 60-70% of the total costs for leading dairy farms, with smaller farms facing greater pressure due to their inability to hedge against market fluctuations [9][10] - The profitability of dairy farms is directly influenced by raw milk prices, which serve as a key indicator of the supply-demand relationship [9][10] Three Phases of Raw Milk Cycle and Future Trends - The current raw milk cycle began in 2021, with expectations for prices to stabilize by Q2 2025 if the industry can successfully reduce excess capacity through the culling of dairy cows [10][11] - The report anticipates that if 300,000 dairy cows are culled this year, it will significantly alleviate the oversupply issue [10][11] - The report also notes that large-scale powder milk inventories will exert downward pressure on raw milk prices, with leading companies holding over 300,000 tons of powder milk as of mid-year [10][11] Investment Recommendations - The report recommends focusing on leading dairy companies with strong cost efficiency and those that are likely to benefit from overall industry improvements, specifically Yili, Mengniu, and New Dairy [10][11][12]