Core Insights - The dairy industry is experiencing a significant downturn, with 19 listed dairy companies in A-shares reporting a total revenue of 184.83 billion yuan in 2023, a year-on-year decrease of 7.44% [1] - The total net profit attributable to shareholders dropped from 13.10 billion yuan to 9.58 billion yuan, with 13 companies reporting a decline in net profit [1] - Key factors affecting the industry include oversupply, weakened demand, and high inventory levels, leading to a continuous decline in fresh milk prices and intensified competition [1] Revenue and Profit Trends - In 2023, 14 out of 19 dairy companies saw a decline in revenue, compared to only 6 the previous year [1] - The dairy industry index has fallen over 50% from its peak in January 2021 to its low in September 2024, although a noticeable increase has been observed since September 2024 [1] - The expectation is that upstream destocking will help stabilize fresh milk prices, alongside policies aimed at boosting demand [1] Sales and Management Expenses - Total sales expenses for the 19 listed dairy companies amounted to 31.55 billion yuan, a decrease of 2.96% year-on-year, which is less than the revenue decline [2] - The median sales expense ratio increased from 11.49% to 13.05%, with only 6 companies reporting a decrease in their sales expense ratios [2] - Companies like Beiyinmei had the highest sales expense ratio at 26.42%, followed by Miaokelando at 19.03% and Yili at 18.99% [2] Management Expenses - Total management expenses for the 19 listed dairy companies were 7.58 billion yuan, a year-on-year decrease of 9.06% [3] - Eight companies reported an increase in management expenses, with Miaokelando showing the highest growth at 81.43% [3] - The median management expense ratio rose from 5.82% to 6.55%, indicating that 11 companies experienced an increase in their management expense ratios [3]

Core Viewpoint - The dairy industry is experiencing a significant downturn in 2024, with a notable decline in revenue and net profit among major companies, attributed to oversupply, weakened demand, and high inventory levels [1] Group 1: Industry Performance - In 2023, 19 dairy companies in A-shares reported total revenue of 184.83 billion yuan, a year-on-year decrease of 7.44% [1] - The total net profit attributable to shareholders fell from 13.10 billion yuan to 9.58 billion yuan, with 13 companies reporting a decline in net profit [1] - The dairy industry index has dropped over 50% from its peak in January 2021 to its low in September 2024, although a recent uptick in the index suggests potential recovery [1] Group 2: Company-Specific Challenges - Knight Dairy and Western Pastoral both reported continuous cash collection ratios below 100%, indicating weaker sales collection capabilities [1] - Knight Dairy's performance was adversely affected by falling fresh milk prices, rising sugar costs, and significant losses in futures trading, leading to increased accounts receivable and inventory [2] - Despite having cash collection ratios above 100%, companies like Huangshi Group and Junyao Health experienced significant year-on-year declines in performance [3] Group 3: Accounts Receivable and Inventory Trends - The total accounts receivable for 19 dairy companies was 8.65 billion yuan, a decrease of 4.55% year-on-year, with 9 companies reporting an increase in accounts receivable [4] - Notable companies with rising accounts receivable include Huirong Technology, Knight Dairy, and Yiming Foods [4] - The total inventory for these companies was 19.07 billion yuan, down 11% year-on-year, but 9 companies saw an increase in inventory, including Junyao Health and Knight Dairy [4] Group 4: Specific Company Insights - Miao Ke Blue and Zhuangyuan Pastoral faced revenue declines alongside rising inventory levels, with Miao Ke Blue's accounts receivable increasing by 20% [5] - Miao Ke Blue's rapid expansion since 2020 has led to increased competition and a price war, necessitating time to digest the consequences of previous overproduction [5]