Core Viewpoint - Tianrun Dairy is facing significant financial challenges, reporting a net loss of 10.61 million yuan in the first three quarters of 2025, compared to a profit of 22.27 million yuan in the same period last year, primarily due to increased culling of low-value cows and provisions for bad debts related to student milk and nurturing projects [1][4][5]. Financial Performance - For the first three quarters of 2025, Tianrun Dairy achieved operating revenue of 2.074 billion yuan, a year-on-year decrease of 3.81% [1][4]. - The company reported a net loss of 10.61 million yuan, with the first quarter alone accounting for a significant portion of this loss, at 73.30 million yuan [4][5]. - Revenue for the second and third quarters was 771 million yuan and 678 million yuan, showing year-on-year declines of 3.94% and 4.84%, respectively [5]. Operational Adjustments - Since 2024, the company has been optimizing its cattle structure by increasing the culling of cows, resulting in a decrease in the number of cows from 64,800 at the end of 2024 to 51,900 by the end of the third quarter of 2025 [1][5]. - The company has indicated that it is actively responding to market conditions through strategic adjustments and refined management, aiming for "sales growth and reduced losses" [8]. Project Development - Tianrun Dairy's project for an annual production capacity of 200,000 tons of dairy products has seen a total investment of 367 million yuan, with an investment progress of 51.5% as of the end of 2024 [2][10]. - By mid-2025, the cumulative investment had increased to 381 million yuan, with a progress rate of 53.47% [10]. - The project is reported to have been completed and is in trial operation as of September 2025 [11]. Market Context - The dairy farming industry in China is currently experiencing overall losses, with cumulative income losses projected at 70 billion yuan from 2023 to 2025 [6]. - The first half of 2025 saw a 0.3% decline in national dairy product output compared to the previous year, exacerbated by intensified market price competition [8].

Core Viewpoint - Xinjiang Tianrun Dairy Industry Co., Ltd. has reported significant declines in net profit, with a 69.24% drop in 2024 and a loss of 73.30 million yuan in Q1 2025, marking the lowest performance in nearly a decade [1][3][2] Financial Performance - In Q1 2025, Tianrun Dairy's revenue was 625 million yuan, down 2.5% year-on-year, with a net profit loss of 73.30 million yuan, a staggering decline of 1713.36% [2] - For the full year 2024, the company reported revenue of 2.804 billion yuan, a 3.33% increase, but net profit fell to 43.66 million yuan, a 69.26% decrease [3] - The decline in net profit is attributed to increased culling of low-yield cows and inventory impairment provisions for milk powder [2][3] Market Conditions - The dairy and cattle farming industries are facing challenges, with a 3.5% year-on-year decrease in national cattle inventory and a 12.3% drop in fresh milk prices in major producing provinces [2] - The company is experiencing a phase of oversupply in milk sources and intensified market competition, prompting it to optimize its core herd and explore new sales channels [2][3] Acquisition Impact - The acquisition of Xinjiang New Agricultural Dairy Co., Ltd. has significantly impacted Tianrun Dairy's profits, with a reported loss of 95.35 million yuan attributed to this acquisition in 2023 [4][5] - New Agricultural Dairy's performance has been poor post-acquisition, with losses continuing into 2024, further straining Tianrun Dairy's financials [5][6] Strategic Focus - Despite challenges, Tianrun Dairy's revenue from markets outside Xinjiang has shown growth, with 2024 figures indicating a 9.25% increase in revenue from these markets [7][8] - The company aims to leverage its advantages in Xinjiang's milk sources to build a robust product matrix and industry system [10]