Major Events - Yunzhisheng (09678) is set to conduct an IPO from June 20 to June 25, with an expected listing date of June 30 [1] - Teda Pharmaceutical (03880) will also hold an IPO from June 20 to June 25, anticipating a listing on June 30 [1] - Baize Medical (02609) has set its share price at HKD 4.22, with a public offering that received 25.92 times subscription [1] - Sanhua Intelligent Control (02050) has a public offering that was oversubscribed by 747.92 times [1] - Yaojie Ankang-B (02617) saw its Hong Kong public offering oversubscribed by 3419.87 times, with an expected listing on June 23 [1] - Geely Automobile (00175) plans to establish a joint venture to enhance its brand influence and market coverage in Brazil [1] - China Gas (00384) raised CNY 216 million for Zhongran Hongming Electric Power Sales, diluting its stake to 77% [1] - Xiansheng Pharmaceutical (02096) received approval from the National Medical Products Administration for its insomnia drug, Kewike® [1] - Weichai Power (02338) intends to spin off Weichai Lovol and list it on the main board of the Hong Kong Stock Exchange [1] - Bank of China (03988) plans to increase its capital in Bank of China Europe by up to EUR 300 million using its own funds [1] - Yongtai Real Estate (00369) intends to sell its entire stake in Topworth Enterprises for GBP 4.3 million [1] - Yimai Sunshine (02522) plans to invest CNY 54 million to acquire a 70% stake in Gaomai Health [1] Financial Data - Cathay Pacific (00293) reported a 28.4% year-on-year increase in passenger volume for the first five months [1] - China Tianrui Group Cement (01252) announced a profit attributable to shareholders of CNY 279 million for the 2024 fiscal year, marking a return to profitability [1] - Modern Dairy (01117) issued a profit warning, expecting a net loss of approximately CNY 800 million to CNY 1 billion for the first half of the year [1]

Investment Rating - The report maintains an "Outperform" rating for the raw milk industry [1] Core Insights - The domestic raw milk market is expected to experience a reversal and upward trend in 2025, driven by a combination of domestic dairy cow culling and rising meat prices, alongside a reduction in imports [5][6] - The industry has faced a cumulative decline in raw milk prices for nearly four years, with significant losses reported [4][6] - The current reliance on imported whole milk powder to supplement domestic raw milk supply indicates a structural gap in production [30][32] Overview of the Industry - Raw milk is the core raw material for the dairy industry, with China being the fourth-largest milk producer globally, yet still dependent on imports to meet demand [3][17] - The domestic raw milk market has been under pressure due to overcapacity and declining prices since mid-2021, leading to significant financial losses for producers [4][59] Historical Review - The domestic raw milk price has experienced two major cycles since 2009, with the latest cycle starting in 2018, characterized by price recovery and capital expansion [4][56] - The current downturn has persisted since mid-2021, with prices dropping to around 3.40 yuan/kg, reflecting a cumulative decline of approximately 22% from the peak [59][63] Future Outlook - By the second half of 2025, raw milk prices are anticipated to rebound due to a reduction in domestic dairy cow numbers and a decrease in imports, as the overseas market has already begun to recover [5][63] - The report forecasts that the number of dairy cows in China will decrease to approximately 13 million by early 2025, returning to levels seen in 2019 [63] Supply and Demand Dynamics - The annual demand for raw milk in China is close to 4.5 million tons, with a supply gap of about 500,000 tons that is primarily filled by imports of whole milk powder [32][30] - The cost structure of raw milk production is heavily influenced by feed prices, which account for approximately 65% of the total production cost [23][24] Industry Structure - The dairy farming sector is capital-intensive, with large-scale operations benefiting from economies of scale and improved production efficiency [25][26] - Major dairy companies are increasingly integrating upstream to secure raw milk supply, indicating a trend towards consolidation in the industry [25][64]

Investment Rating - The report indicates a neutral investment rating for the agricultural sector, with expectations of limited price fluctuations in the near term [76]. Core Insights - The agricultural sector index outperformed the Shanghai Composite Index, with a weekly increase of 0.91% [13][14]. - The report highlights the ongoing adjustments in the pig farming industry, with a focus on the profitability of leading companies amidst fluctuating prices [20][21]. - The poultry sector is experiencing price stabilization despite seasonal demand fluctuations, with potential impacts from avian influenza affecting supply [33][29]. - The dairy and beef sectors are showing signs of recovery, with rising prices for raw milk and beef, indicating a potential upward trend in profitability [37]. - The planting industry is stabilizing, with potential improvements expected if there are significant reductions in grain production due to external factors [44]. Summary by Sections 1. Market Review - The agricultural index closed at 2682.22 points, with a weekly increase of 0.91%, outperforming major indices [13][14]. - The top-performing sectors included telecommunications and non-ferrous metals, while agriculture ranked 20th [14]. 2. Key Data Tracking 2.1 Pig Farming - The average weight of pigs at market was 129.17 kg, with prices showing a slight decline [19][20]. - Leading companies are expected to maintain profitability above 200 CNY per pig in the first half of the year [21]. - The report suggests a cautious outlook for the second half of the year due to supply pressures [21]. 2.2 Poultry Farming - White feather chicken prices decreased to 7.32 CNY/kg, while overall prices remained stable [29][33]. - The report anticipates a recovery in consumer demand as macroeconomic policies adjust [33]. 2.3 Dairy and Beef Industry - Raw milk prices have stabilized at 2.6 CNY/kg, with expectations for further recovery in the second half of 2025 [37]. - The beef market is showing signs of a new cycle, with rising prices for calves and live cattle [37]. 2.4 Planting Industry - Grain prices are experiencing fluctuations due to tariff policies and external uncertainties [44]. - The report emphasizes the importance of increasing grain yields to counteract potential production declines [44]. 2.5 Feed and Aquaculture - Feed prices have stabilized, with slight variations in water product prices [64]. - The report notes that prices for various fish species remain steady, with some increases in shrimp prices [64].

牧业即将迎来右侧时刻：一边涨价一边加速去产能 20250604 摘要 环保政策和非洲猪瘟曾系统性影响养殖业周期，2016 年起环保政策清 理散户，2018 年非洲猪瘟导致蛋白质价格上涨，奶牛养殖周期长达三 年，影响市场供应持久。 当前行业完全成本约 3.5 元/公斤，合同内原奶价格约 3-3.1 元/公斤， 社会散奶价格更低，行业整体亏损，散奶价格仅能维持泌乳牛现金成本， 后备牛亏损严重，中小散户养不起后备牛，行业运行不健康。 奶价已接近泌乳牛现金成本线，短期内泌乳牛淘汰有限，供应过剩难缓 解，但后备牛亏损导致配种意愿低，预计两年后市场供应将减少，今年 年底或明年初奶价或开始上涨。 奶业周期通常为八年，目前处于新周期临界点，2023 年中行业亏损并 开始去产能，预计 2025 年底将出现供应拐点，提前淘汰和需求旺季可 能加速拐点到来。 行业产能去化已持续两年多，预计未来奶价上涨将持续至少两年，6-8 月淘汰旺季可能加速淘汰速度，当前时间点临近奶价趋势性上涨。 Q&A 当前畜牧业周期的趋势是什么？为什么奶价可能会在产能去化的同时上涨？ 目前畜牧业正处于一个关键时刻，我们预计未来将出现产能去化与奶价上涨并 存的情 ...

Market Overview - The Hong Kong stock market opened high but closed lower, with the Hang Seng Index down 0.53% to 23,258.31 points and a total trading volume of 180.82 billion HKD [1] - Citic Securities anticipates a volatile upward trend for Hong Kong stocks in Q3, with potential performance upgrades in Q4 due to domestic growth policies and AI industry catalysts [1] Blue-Chip Stocks Performance - Kuaishou-W (01024) rose 5.95% to 51.65 HKD after reporting Q1 revenue of 32.608 billion RMB, a 10.9% YoY increase, and an adjusted net profit of 4.58 billion RMB, up 4.4% YoY [2] - Other blue-chip stocks like Budweiser APAC (01876) and Nongfu Spring (09633) also saw gains, while SMIC (00981) and Li Auto-W (02015) faced declines [2] Sector Performance - Consumer stocks generally rose, with notable gains in beer, dairy, and restaurant sectors, while gaming stocks benefited from increased Macau gaming revenue [3] - Airlines continued to rise, with China Eastern Airlines (00670) up 3.4% as domestic and international flight bookings increased significantly [4] - Nuclear power stocks experienced volatility, with a notable rise in the morning followed by a decline, influenced by U.S. nuclear energy policy announcements [5] Automotive Sector - The automotive sector faced pressure, with several companies like Li Auto-W (02015) declining due to renewed price wars [6] - Analysts suggest that without regulatory intervention, competition will intensify, particularly affecting mid-tier companies [6] Notable Stocks Movements - Yaoshi Bang (09885) reached a new high, up 13.18% after announcing a share buyback plan and reporting significant growth in its proprietary brand business [7] - Alibaba Pictures (01060) rose 11.54% following a strategic shift towards cautious film investment and a focus on its DaMai business [8] - Meizhong Jiahe (02453) surged 10.2% after launching a new language model for proton therapy, showcasing its treatment effectiveness [9] - SF Express (09699) increased by 9.5%, with analysts highlighting its leading position in the third-party delivery market and growth potential [10]

Summary of Mengniu Dairy's Conference Call Company and Industry Overview - **Company**: Mengniu Dairy - **Industry**: Chinese Dairy Products Industry Key Points and Arguments 1. **Revenue Growth**: Mengniu Dairy has maintained long-term revenue growth despite external shocks, with new business expansions expected to achieve steady growth [2][4][5] 2. **Financial Resilience**: The company has shown strong financial resilience with stable cash flow and consistent dividends, despite fluctuations in profit due to goodwill impairment [2][5][17] 3. **Management Changes**: The appointment of CEO Gao Fei has led to reforms that are stabilizing channels, with expectations for improved operational efficiency and revenue growth in 2025 [2][6][17] 4. **Market Dynamics**: The Chinese dairy market is experiencing stable sales growth, but a decline in both volume and price due to demographic changes and falling raw milk prices [2][7][11] 5. **Core Business**: Liquid milk remains the backbone of Mengniu's business, while ice cream and cheese are identified as potential growth areas [2][9][12] 6. **Support from COFCO**: The backing of COFCO Group provides stability and support for Mengniu's operations and growth strategies [2][9] 7. **Rural Consumption Growth**: Increasing rural incomes and the spread of Western dietary habits in southern China present growth opportunities for dairy consumption [2][10][11] 8. **Future Growth Opportunities**: The company is well-positioned for future growth through its extensive product range and strategic partnerships in both domestic and international markets [2][9][15] 9. **Industry Trends**: The dairy industry is expected to see changes in consumer habits, particularly among the elderly, leading to increased demand for specialized dairy products [11][16] 10. **Challenges and Opportunities**: The industry faces challenges such as competition and changing consumer preferences, but also opportunities from rising disposable incomes and urban-rural consumption disparities [14] Additional Important Content 1. **Impact of Raw Milk Prices**: The decline in raw milk prices is expected to stabilize, which may reduce competition and improve profitability for leading companies like Mengniu [4][11][16] 2. **International Expansion**: Mengniu's international strategy includes expanding into Southeast Asia and Australia, which could enhance its global supply chain capabilities [15] 3. **Valuation and Market Position**: Mengniu's current valuation is lower than its peers, with a price-to-earnings ratio of approximately 13, indicating potential for upward adjustment as operational pressures ease [17]

Investment Rating - The report assigns an "Outperform" rating to several companies including Pop Mart, Anta Sports, Haidilao, and China Feihe, while Budweiser APAC is rated "Neutral" [1]. Core Insights - The report highlights significant developments in the F&B and designer toys sectors, including the opening of ChaPanda's first store in France and the launch of promotional activities by GOODME [6][7]. - Key financial results are reported, such as Super Hi International's Q1 revenue of $198 million, a 5% year-on-year increase, and MINISO's Q1 revenue of 4.43 billion yuan, a 19% year-on-year increase [6][7]. Weekly Performance Summary - In the F&B sector, top performers include GOODME (+13.0%), MIXUE (+11.2%), and ChaPanda (+6.3%), while underperformers include Yum China (-4.4%), Haidilao (-7.6%), and Super Hi International (-13.3%) [2][7]. - In the designer toys sector, Pop Mart (+12.3%) and Blokees (+8.9%) performed well, while MINISO (-9.9%) lagged behind [2][7]. Company Highlights - Pop Mart opened its first premium store in Chengdu SKP, enhancing its brand experience [6]. - 52TOYS submitted its IPO prospectus, reporting a 31% year-on-year revenue growth to 630 million yuan in 2024 [6].

Group 1 - The raw milk industry is expected to improve in the second half of 2025 compared to the first half, following a prolonged downturn that has lasted over three years [1][3] - In 2024, the industry is projected to face a 90% loss rate, with the purchase price of raw milk falling below that of New Zealand, leading to a significant decline in domestic milk prices [1][2] - The average price of fresh milk in major producing provinces was reported at 3.07 yuan per kilogram, reflecting a 10.5% year-on-year decrease, indicating that while prices have bottomed out, there is no clear sign of recovery [2] Group 2 - The domestic milk price has fallen below international levels, with New Zealand's price at approximately 3.2 yuan per kilogram, and the prices in the US and Europe at 3.6 yuan and 4.2 yuan per kilogram respectively [3] - The number of dairy cows in China is expected to decrease by 200,000 to 300,000 heads in 2024, reversing a five-year growth trend, with total raw milk production projected to decline by 2.8% to 40.79 million tons [3] - The average daily spray-dried fresh milk from leading dairy companies decreased from 20,000 tons in April 2024 to 13,000 tons in April 2025, indicating a positive trend in supply adjustment [3] Group 3 - The market is anticipated to reach a supply-demand balance in the third quarter of 2025, driven by the exit of small farms and consumer stimulus policies [4] - The industry is advised to explore potential milk consumption, continue to reduce production capacity to achieve supply-demand balance, and expand controllable milk sources to stabilize the market [4] - Recommendations include establishing a raw milk supply quota system based on agricultural resources in various provinces to protect the interests of farmers [4]

Core Viewpoint - The dairy industry is undergoing a capacity adjustment and destocking process, with a clear direction influenced by policy support, leading to potential stabilization of milk prices in the second half of the year [1] Group 1: Milk Price Cycle - The milk price cycle is influenced by multiple factors including capacity, demand, and imports, creating a cyclical relationship where milk prices affect farming profits, which in turn influence capacity [1] - Since 2008, the milk price has experienced three downward cycles and two upward cycles, with significant events like the melamine incident in 2008 impacting prices [1] Group 2: Industry Losses and Capacity Adjustment - The fresh milk price decline in 2024 has led to severe losses for farms, with a continuous destocking trend observed [2] - In 2024, the total raw milk production is projected to be 40.79 million tons, a decrease of 2.8% year-on-year, with a 4.5% decline in the number of Holstein cows [2] Group 3: 2025 Outlook - The current milk price adjustment cycle has lasted over three years, with over 80% of the industry facing losses, indicating a more severe situation than previous cycles [3] - Despite ongoing losses, policies such as fertility subsidies and student milk promotions are expected to marginally boost dairy product demand, leading to a potential stabilization of raw milk prices in the second half of 2025 [3] Group 4: Milk Price and Dairy Company Stock Performance - Historical data shows a high correlation between milk price fluctuations and stock price movements of upstream dairy companies, with stock prices often reacting ahead of milk prices [4] - During periods of rising milk prices, upstream companies are expected to benefit directly, while downstream dairy companies may experience stock price changes driven by their product structure upgrades and market expectations [4]

Investment Rating - The report rates the food and beverage industry as "Overweight" [1] Core Insights - The dairy price is expected to stabilize in the second half of 2025 after a prolonged adjustment cycle lasting over three years, with over 80% of the industry facing losses [6][60] - The report highlights the cyclical nature of raw milk prices influenced by production capacity, demand, and imports, with significant historical fluctuations noted [6][19] - The report emphasizes the correlation between raw milk prices and the stock prices of upstream dairy companies, suggesting that stock prices may react ahead of milk prices during cyclical changes [6][35] Summary by Sections 1. Raw Milk Price Cycle - The raw milk price is influenced by multiple factors including production capacity, demand, and imports, creating a cyclical pattern [6][19] - The dairy industry is characterized by a long breeding cycle for dairy cows, leading to delayed responses in production capacity adjustments [18][19] - Historical data shows three downward cycles and two upward cycles in raw milk prices since 2008, with significant events impacting demand and prices [19][26] 2. 2025 Outlook - The industry is currently facing severe losses, with a continued trend of dairy cow capacity reduction expected [60][62] - Policy support is anticipated to improve dairy product demand, contributing to a gradual stabilization of milk prices in the latter half of 2025 [60][64] - The report forecasts that as the supply-demand balance improves, raw milk prices may stabilize, benefiting upstream dairy companies [60][62] 3. Correlation Between Milk Prices and Dairy Company Stocks - The report notes a high correlation between raw milk prices and the stock prices of upstream dairy companies, indicating that stock prices may respond more quickly to changes in market conditions [6][35] - The performance of downstream dairy companies is also influenced by their product structure and market expectations, which can affect their stock prices during different price cycles [6][35] 4. Investment Recommendations - The report suggests focusing on leading dairy companies such as Modern Dairy and Yurun Dairy, as well as major dairy enterprises like Yili and New Dairy, which are expected to benefit from the stabilization of milk prices [6][60]