Group 1 - The core viewpoint of the article highlights the rise in dairy stocks, specifically mentioning Modern Dairy (01117) increasing by 4.14% to HKD 1.51 and Yurun Dairy (09858) rising by 2.94% to HKD 4.91 [1] - On December 22, the Ministry of Commerce announced a preliminary ruling on anti-subsidy investigations for imported dairy products from the EU, deciding to implement temporary anti-subsidy measures [1] - According to Caitong Securities, with domestic raw milk production capacity being excessive and milk prices at a low point, the price advantage of imported dairy products is diminishing, creating a window for domestic deep processing capacity expansion [1] Group 2 - The implementation of anti-subsidy measures is expected to further solidify the price advantage of domestic products and accelerate the process of domestic deep processing substitution [1] - The increase in domestic deep processing capacity will create additional demand for raw milk, benefiting upstream farms, and companies such as Yurun Dairy and Modern Dairy are recommended for attention [1]

Group 1 - The core viewpoint of the article highlights the rise in dairy stocks, specifically mentioning Modern Dairy (01117) increasing by 4.14% to HKD 1.51 and Yuanrong Dairy (09858) rising by 2.94% to HKD 4.91 [1] - The Ministry of Commerce announced a preliminary ruling on December 22 regarding anti-subsidy investigations on imported dairy products from the EU, deciding to implement temporary anti-subsidy measures [1] - Financial analysts at Caitong Securities (601108) believe that due to domestic raw milk overcapacity and a downward cycle in milk prices, the price advantage of imported dairy products is diminishing, creating a favorable window for domestic deep processing capacity [1] Group 2 - The implementation of anti-subsidy measures is expected to further solidify the price advantage of domestic products and accelerate the process of domestic deep processing substitution [1] - The increase in domestic deep processing capacity will create additional demand for raw milk, benefiting upstream farms [1] - Analysts recommend focusing on companies such as Yuanrong Dairy and Modern Dairy due to these favorable market conditions [1]

证券研究报告 | 2025年12月23日 2025年12月24日 牧业大周期更新点评 重视牧业大周期反转，肉奶联动有望打开成长空间 |  | 行业研究·行业快评 | | 农林牧渔  | 投资评级：优于大市（维持）  | | --- | --- | --- | --- | --- | | 证券分析师： | 鲁家瑞 | 021-61761016 | lujiarui@guosen.com.cn | 执证编码：S0980520110002 | | 证券分析师： | 李瑞楠 | 021-60893308 | liruinan@guosen.com.cn | 执证编码：S0980523030001 | | 证券分析师： | 江海航 | | jianghaihang@guosen.com.cn | 执证编码：S0980524070003 | 事项： 据农业农村部统计，截至 2025 年 12 月 18 日，国内主产区牛肉均价为 65.73 元/kg，较年初低点累计上涨 16%；主产区生鲜乳均价为 3.02 元/kg，较年初累计下跌约 3%；肉奶比（牛肉价格/生鲜乳价格）已接近 22，创历史新高。 国信农业观点：1） ...

Investment Rating - The report maintains a "Recommendation" rating for the food and beverage industry, expecting the industry index to outperform the benchmark index by over 5% in the next 3-6 months [24]. Core Insights - The Ministry of Commerce has announced a countervailing policy against EU dairy imports, which is expected to accelerate domestic product substitution and stabilize raw milk prices. The policy will impose temporary countervailing measures on EU dairy products starting December 23, 2025, with subsidy rates ranging from 21.9% to 42.7% [2][8]. - The policy targets high-fat dairy products, particularly cheese and cream, which have a high dependency on imports. This is expected to significantly increase the cost of EU products, thereby enhancing the price advantage for domestic manufacturers [8]. - The domestic dairy processing industry has historically relied on imports due to high raw milk costs and immature technology. The report estimates that the domestic production of similar products accounted for only 14%-18% in 2023, indicating a substantial market opportunity for local producers [8]. Summary by Sections Industry Overview - The food and beverage industry comprises 126 listed companies with a total market capitalization of 46,266.30 billion and a circulating market value of 45,144.74 billion [5]. Market Performance - The absolute performance of the industry over the past month is -2.1%, with a 6-month performance of 2.7% and a 12-month performance of -4.9%. Relative performance shows a decline of -5.9% over one month, -17.1% over six months, and -22.4% over twelve months [6]. Policy Impact - The countervailing measures are expected to create a market space of approximately 20 billion for cream and 14 billion for cheese, accelerating domestic substitution. The report highlights that the production capacity of deep processing projects is expected to consume over 400 million tons of raw milk, potentially leading to a reversal in the raw milk cycle by the second half of 2026 [8]. Investment Opportunities - The report identifies three main investment opportunities: - Domestic substitutes that will directly benefit from the policy, with a focus on companies like Lihigh and Miaoke, which are positioned to capture high-end market segments [8]. - Dairy farms such as Youran and Modern Dairy, which are expected to benefit from a reversal in raw milk prices [8]. - Leading dairy companies like Yili and Mengniu, which are anticipated to strengthen their competitive edge through accelerated deep processing business and improved operational stability [8].

Core Viewpoint - The Chinese Ministry of Commerce has imposed temporary anti-subsidy tariffs of up to 42.7% on EU dairy products, significantly impacting French companies and altering the global trade landscape [1][3][5]. Group 1: Tariff Details - The temporary anti-subsidy tariffs are categorized into three tiers: 21.9% to 42.7% for sampled companies cooperating with the investigation, a uniform rate of 28.6% for other cooperating EU companies, and a maximum rate of 42.7% for non-cooperating companies [1][3]. - The affected dairy products include fresh cheese, processed cheese, blue cheese, and cream, excluding infant formula [3][5]. - The new tariffs increase the effective tax rates on EU cheese exports to China by over 20 percentage points, with some products exceeding a total tax rate of 50% [3][5]. Group 2: Background and Investigation - The trade dispute began with a complaint from the China Dairy Industry Association in August 2024, leading to an investigation into EU subsidies affecting Chinese dairy companies [5][10]. - The investigation revealed that EU subsidies under the Common Agricultural Policy have significantly harmed Chinese dairy producers, with EU dairy exports to China reaching €1.7 billion in 2023, accounting for over 30% of China's total dairy imports [5][10]. Group 3: Impact on Companies - French dairy companies, particularly those producing high-end products like Roquefort and Camembert, are expected to face severe impacts, with prices for French cheese in China projected to rise by 30% to 50% [8][12]. - New Zealand is positioned to benefit significantly from this trade dispute, as it currently supplies 60% of China's cheese imports, and the new tariffs will likely allow New Zealand to capture the market share left by EU products [12][14]. - Domestic dairy companies in China, such as Yili and Mengniu, are expected to accelerate their production capabilities in response to the tariff changes, with Yili planning to expand its cheese production lines [12][14].

Investment Rating - The report maintains an "Add" rating for the industry [3] Core Insights - The EU's anti-subsidy measures on dairy products are expected to accelerate domestic substitution in the dairy processing sector, with temporary anti-subsidy deposits imposed on EU dairy imports starting December 23, 2025, at rates between 21.9% and 42.7% [1][2] - The share of EU dairy products in China's total dairy imports has been significant, ranging from 23.6% to 34.6% from 2020 to March 2024, indicating a substantial market impact [2] - Domestic dairy companies such as Miao Ke Lan Duo, Yili, Mengniu, and Li Gao are actively expanding their deep processing capabilities, which is expected to enhance demand for raw milk and improve the supply-demand balance in the upstream raw milk industry [2] Summary by Sections Industry Overview - The report highlights the implementation of temporary anti-subsidy measures on EU dairy imports, which is anticipated to shift processing activities back to domestic producers [1][2] Market Dynamics - The deep processing of dairy products is projected to increase raw milk consumption, driven by expanding demand from new consumption scenarios such as milk tea [2] Investment Recommendations - The report suggests focusing on companies with strong potential in deep processing and raw milk supply-demand balance, specifically recommending Miao Ke Lan Duo, Yili, Mengniu, Li Gao for deep processing, and You Ran Mu Ye, Modern Dairy, and China Shengmu for upstream dairy farming [2]

Macro and Strategy - Silver prices have reached historical highs, driven by its dual industrial and financial attributes, with over 60% of silver used in industrial applications as of December 2025 [6][7] - The recent surge in silver prices was triggered by significant physical deliveries at the New York COMEX, with registered inventories dropping over 70% from their peak in 2020 [6] - Long-term demand for silver is expected to grow due to industrial applications in solar energy, AI, and electric vehicles, alongside continued global monetary easing [6] Industry and Company - The agricultural sector is witnessing a bullish trend in livestock prices, particularly for beef and milk, with expectations of a cyclical recovery in the meat and dairy markets [24][26] - The price of live pigs has increased to 11.57 CNY/kg, reflecting a week-on-week rise of 2.03%, while beef prices are also on an upward trajectory [24][26] - The media and internet industry has shown resilience, with a 0.54% increase in the sector, outperforming major indices, driven by upcoming IPOs and strong box office performances from films like "Avatar 3" [27][28] - The copper industry is facing a significant shift as long-term processing fees for copper concentrate have been set to zero, indicating a potential improvement in the industry structure [31] - The home appliance sector is experiencing a downturn, with retail sales down 19% year-on-year in November, although there are signs of recovery in exports for certain categories like refrigerators and washing machines [32][33]

Investment Rating - The industry investment rating is "Positive" and is maintained [5]. Core Insights - The Ministry of Commerce announced preliminary findings of a countervailing investigation against imported dairy products from the EU, confirming that these products are subsidized and have caused substantial harm to the domestic dairy industry in China. A temporary countervailing duty will be implemented starting December 23, 2025 [2][4]. Summary by Sections Event Description - The Ministry of Commerce's announcement (Document No. 83 of 2025) revealed that imported dairy products from the EU are subsidized, leading to significant harm to the domestic dairy industry. The State Council Tariff Commission will impose temporary countervailing duties starting December 23, 2025 [4]. Event Commentary - The countervailing investigation was initiated following a request from the China Dairy Industry Association and the China Dairy Products Industry Association in July 2024. The investigation confirmed that the subsidization of EU dairy products has resulted in increased inventory and a shift from profit to loss for domestic producers. The subsidy rates for sampled companies ranged from 21.9% to 42.7% [4]. Market Opportunities - The reliance on EU imports for various dairy products presents opportunities for domestic alternatives. In 2024, the B-end market for cheese, cream, and butter is projected to reach approximately 27.4 billion yuan, with a CAGR of 13.6% over the past decade. Key recommended companies include Miaokelando, Yili, Mengniu, New Dairy, and Lihai Foods [4]. Raw Milk Price Outlook - There is an expectation for a turning point in raw milk prices, as domestic fresh milk prices have decreased significantly while international prices for bulk powder have shown an upward trend. The supply-demand balance for raw milk is anticipated to stabilize by 2026, with recommendations for companies like Youran Dairy and Modern Dairy [4].

Core Viewpoint - The "Golden Award" annual outstanding company selection by Gelonghui highlights ten companies recognized for their investment value in the small and mid-cap category, emphasizing their revenue and net profit growth, as well as their overall business capabilities [1][2]. Group 1: Award Winners - Ten companies received the "Annual Investment Value Award (Small and Mid-Cap)" including: - Baiao Family Interaction (02100.HK) - Honghua Smart Energy (01083.HK) - Guichuang Tongqiao (02190.HK) - Laikai Pharmaceutical-B (02105.HK) - Longpan Technology (603906.SH/02465.HK) - Shoucheng Holdings (00697.HK) - Tiangong International (00826.HK) - Tuhu-W (09690.HK) - Yaoshibang (09885.HK) - Youran Agriculture (09858.HK) - The ranking is in alphabetical order and does not imply any priority [1]. Group 2: Evaluation Criteria - The award focuses on evaluating listed companies based on revenue and net profit growth, considering factors such as company size, business model, management capability, and innovation ability [1]. - The selection process involved quantitative data analysis and an expert review panel to determine the final results [1]. Group 3: Event Purpose - Gelonghui aims to create a reference value ranking for listed companies and unicorns with a global perspective on investing in China, covering all listed companies on major exchanges including HKEX, SSE, SZSE, NYSE, and NASDAQ [2].

Core Viewpoint - Yuran Dairy (09858) has seen its stock price rise over 7%, reaching a new high of 4.91 HKD, driven by favorable market conditions and industry trends [1]. Company Summary - Yuran Dairy is the largest raw milk supplier in China, operating 100 farms and raising approximately 620,000 dairy cows. The company is projected to produce about 3.74 million tons of raw milk in 2024, accounting for 12.1% of the national total [1]. - The company is also the largest provider of ruminant feed in China, with its subsidiary, Saikexing, being the largest dairy cattle breeding enterprise in the country [1]. - In the first half of this year, Yuran Dairy reported an average feed cost of 1.91 HKD per kilogram, with a leading cow yield of 12.9 tons per cow [1]. Industry Summary - Recent reports indicate that the price of raw milk has rebounded to around 3 HKD per kilogram, which has slowed the industry's destocking rate. However, the industry continues to face significant financial pressure and ongoing losses, suggesting that capacity reduction may persist [1]. - It is anticipated that as supply-side capacity reduction gradually takes effect, raw milk prices may stabilize and recover next year [1]. - In the beef cattle sector, prices for calves and live cattle have recently increased, indicating the potential for a new beef cattle cycle, which could enhance the overall sector's performance [1].