Core Viewpoint - Tianrun Dairy's performance in the first three quarters of 2025 shows a decline in revenue and net profit, attributed to a low milk price cycle in the Chinese dairy industry, despite an increase in product sales volume [1][2]. Financial Performance - For the first three quarters of 2025, the company's operating revenue was 2.074 billion yuan, a year-on-year decrease of 3.81% [1]. - The net profit attributable to shareholders was a loss of approximately 10.61 million yuan, a year-on-year decline of 147.7% [1]. - In Q3 2025, the operating revenue was 678 million yuan, down 4.8% year-on-year, while the net profit attributable to shareholders was 11.24 million yuan, a decrease of 77.6% [1]. - The non-recurring net profit was 18.75 million yuan, a year-on-year decline of 62.7% [1]. - As of the end of Q3, total assets were 5.767 billion yuan, a decrease of 6.9% from the end of the previous year, and the net assets attributable to shareholders were 2.397 billion yuan, down 0.7% [1]. Market and Product Development - Despite the challenging market conditions, the company achieved a sales volume of 230,000 tons of dairy products, an increase of 1.91% compared to the same period last year [1]. - The company has launched several new products to enrich its product matrix [1]. - The company is actively expanding its market channels, with its e-commerce subsidiary completing the setup of mainstream e-commerce platforms and live streaming rooms, and preparing for the "Double 11" shopping event [2]. - The company has also opened multiple direct-operated stores to enhance brand influence [2]. - The construction of a smart factory with an annual production capacity of 200,000 tons of dairy products has been largely completed and is in trial operation, marking significant progress in production intelligence and digitalization [2].

Core Viewpoint - Tianrun Dairy reported a decline in revenue and a net loss for the first three quarters of 2023, indicating significant challenges in the dairy industry amid low milk prices and increased competition [1][3]. Financial Performance - For the first three quarters, the company achieved revenue of 2.074 billion yuan, a year-on-year decrease of 3.81% [1][2]. - In Q3, revenue was 678 million yuan, down 4.84% year-on-year [1][2]. - The net profit attributable to shareholders was approximately -10.61 million yuan, marking a shift from profit to loss [1][2]. - The total profit for Q3 was 1.58 million yuan, a decline of 96.50% [2]. - The net profit attributable to shareholders decreased by 77.60% in Q3 [2]. Sales and Product Performance - The company sold 226,800 tons of dairy products from January to September, an increase of 1.91% compared to the same period last year [3]. - Shelf-stable dairy products accounted for 54% of the company's revenue, while low-temperature dairy products contributed approximately 40% [3]. Industry Context - The Chinese dairy industry is currently experiencing a downturn, characterized by low milk prices, capacity reduction in upstream farming, and intense competition among downstream dairy companies [3]. - The company's net profit growth rates are projected to decline by 27.71% in 2023 and 69.26% in 2024 [3]. Operational Adjustments - Tianrun Dairy has actively eliminated low-yield dairy cows, with over 7,700 cows culled in 2024 [3]. - As of the reporting period, the company had 51,900 cows, a decrease of 12,900 from the end of 2024 [3]. - The proportion of breeding cows increased to 56%, enhancing breeding efficiency [3]. Production Capacity - The company’s annual production capacity for dairy products has reached 200,000 tons, with the project nearing completion and entering trial operations [3]. - The production system includes 21 operational systems, creating a comprehensive data ecosystem covering the entire dairy supply chain [3]. Market Performance - As of October 23, Tianrun Dairy's stock price increased by 1.76%, closing at 10.42 yuan per share, with a total market capitalization of 3.288 billion yuan [4].

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]