Core Viewpoint - The company reported a decline in revenue and net profit for the first half of 2025, with a focus on the challenges faced in the liquid milk and livestock product segments, while other dairy products showed positive growth [1][2]. Revenue Summary - For 25H1, the revenue from liquid milk, other dairy products, and livestock products was 66.1 billion, 44.5 billion, and 5.2 billion respectively, showing year-on-year changes of -8.6%, +8.8%, and -13.8% [2]. - In 25Q2, the revenue for liquid milk, other dairy products, and livestock products was -10.8%, +6.1%, and +140.4% year-on-year, indicating a mixed performance across product lines [2]. - Regional performance in 25H1 showed revenue from Shanghai, other regions, and overseas at 34.9 billion, 49.9 billion, and 39.4 billion respectively, with year-on-year changes of -6.9%, -1.5%, and +1.9% [2]. - Channel-wise, direct sales, distributors, and other channels generated revenues of 27.6 billion, 95.7 billion, and 0.8 billion respectively, with year-on-year changes of -1.1%, -2.2%, and -13.1% [2]. Profitability Summary - The gross margin for 25H1 decreased by 1.0 percentage points to 18.9%, while the net profit margin and the non-recurring net profit margin were 1.7% and 2.0% respectively, both showing declines [3]. - The sales expense ratio for 25H1 decreased by 0.8 percentage points to 10.9%, indicating effective cost control [3]. - The management expense ratio also saw a decline, down by 0.4 percentage points to 3.3% in 25H1 [3]. Outlook and Valuation - The company anticipates a gradual recovery in overall dairy product demand, benefiting from a balanced supply-demand situation in the raw milk cycle starting in 2026 [4]. - The earnings per share (EPS) forecast for 2025-2027 is adjusted to 0.45, 0.48, and 0.52 yuan, reflecting slight changes from previous estimates [4]. - The target price is set at 9.90 yuan based on a price-to-earnings (PE) ratio of 22x for 2025, indicating a positive outlook for the company's stock [4].