Core Viewpoint - The performance of Western Dairy is under pressure due to weak dairy product consumption and supply-demand imbalance, leading to a significant increase in net losses in the first half of 2025 compared to the previous year [1][2] Financial Performance - In the first half of 2025, the company's operating revenue was 396 million yuan, a year-on-year decrease of 12.45% [1] - The net loss attributable to the parent company was 43.6 million yuan, widening from a net loss of 34.47 million yuan in the same period last year [1] - The net cash flow from operating activities turned positive at 20.45 million yuan, primarily due to increased cash inflows from sales and subsidies [1] - The net cash flow from financing activities doubled due to an increase in bank loans [1] Market Conditions - Dairy product demand has weakened since September 2021, while production has rebounded, resulting in a continuous decline in raw milk prices for over three years [1] - As of the third week of August, the average price of fresh milk in major producing provinces was 3.02 yuan per kilogram, unchanged from the previous week and down 5.6% year-on-year [1] Strategic Actions - To capture market share, the company has implemented promotional strategies, but these have not yielded significant results [1] - Revenue for 2023-2024 and the first half of 2025 has continued to decline by double digits year-on-year, with a downward trend in sales gross margin over the past five years [1] Cost Management - Research and development expenses decreased by 51% in the first half of 2025 [2] - Sales expenses were reduced by 39%, attributed to the end of cooperation with subsidiaries and a decrease in sales commissions and promotional costs [2] - Management expenses increased by 41%, amounting to 30.73 million yuan in the first half of 2025 [2]