原奶周期专题研究：走出低谷，改善可期

Investment Rating - The report recommends a "Buy" rating for key companies in the dairy industry, including Mengniu Dairy, Yili Group, and New Hope Dairy [4][5]. Core Insights - The current cycle of raw milk prices has experienced a significant decline, with prices dropping by 28.5% from their peak in 2024. The average price of fresh milk in major production areas was 3.13 CNY/kg in late October 2024, reflecting a year-on-year decrease of 15.9% [57][60]. - The supply-demand imbalance has been exacerbated by weak demand recovery and the inertia of upstream production expansion, leading to a prolonged adjustment period for raw milk prices [57][60]. - The report anticipates that by 2025, the supply-demand dynamics for raw milk may return to balance, driven by a reduction in dairy cattle numbers and improved demand conditions [86]. Summary by Sections Current Cycle Summary - The raw milk market has been in a downward trend since 2024, with significant price adjustments observed. The average price of fresh milk has seen a year-on-year decline of 10.9%, 12.7%, and 14.9% in Q1, Q2, and Q3 respectively [57][60]. - The total supply of raw milk in Q1-Q3 2024 decreased by 3.0%, 3.5%, and 5.3% year-on-year, indicating a tightening supply situation [86]. Historical Cycle Review - Historical analysis shows that after the last major price decline in 2015-2016, leading companies like Yili and Mengniu saw a recovery in profitability as prices stabilized [57][60]. - The report highlights that during previous downturns, once prices stabilized, leading companies achieved significant excess returns compared to market indices [57][60]. Future Outlook - The report suggests that the supply-demand gap is narrowing, with expectations for a gradual recovery in demand for dairy products. The profitability of leading dairy companies is expected to improve as the market stabilizes [86]. - The report emphasizes the competitive advantages of leading dairy companies in terms of sourcing, distribution, and branding, which will support their long-term stability in the market [86]. Investment Recommendations - The report advises continued monitoring of the supply adjustments and demand recovery in the dairy sector. It recommends focusing on leading companies such as Mengniu Dairy, Yili Group, and New Hope Dairy for potential investment opportunities [86].