Investment Rating - The report maintains a "Recommended" rating for Tianrun Dairy [6][5] Core Views - The company reported a revenue of 2.074 billion yuan for the first three quarters of 2025, a decrease of 3.81% year-on-year, and a net profit attributable to shareholders of -0.11 billion yuan, indicating a shift from profit to loss [3] - The company has shown resilience in operations despite industry supply and demand pressures, with expectations for improvement in raw milk prices as the supply situation stabilizes [5] Summary by Sections Financial Performance - For Q3 2025, the company achieved a revenue of 678 million yuan, down 4.84% year-on-year, and a net profit of 11 million yuan, down 77.60% year-on-year [3] - The gross margin for Q3 2025 was 14.72%, a decrease of 5.15 percentage points, while the net margin was 0.64%, down 5.68 percentage points [5] Product and Market Development - The company sold 226,800 tons of dairy products from January to September 2025, a year-on-year increase of 1.91%. The revenue from ambient dairy products in Q3 2025 was 358 million yuan, down 3.81% year-on-year [4] - New product launches include various low-temperature yogurt and milk beer flavors, contributing to a diversified product matrix [4] Regional Performance - Revenue from the Xinjiang region in Q3 2025 was 358 million yuan, up 10.16% year-on-year, while revenue from outside Xinjiang was 300 million yuan, down 13.68% year-on-year [4] - The company expanded its distribution network, increasing the number of distributors in Xinjiang to 388 and outside Xinjiang to 574, totaling 962 distributors [4] Future Outlook - Revenue projections for 2025 to 2027 are 2.750 billion, 2.957 billion, and 3.200 billion yuan, respectively, with net profits expected to be 27 million, 124 million, and 187 million yuan [5][10] - The current stock price corresponds to a price-to-earnings ratio (PE) of 116, 25, and 17 for the years 2025, 2026, and 2027, respectively [5][10]