Core Viewpoint - Tianrun Dairy reported a decline in revenue and net profit for the first three quarters of 2025, indicating challenges in the dairy market and the need for strategic adjustments [4][5]. Financial Performance - For Q1-Q3 2025, the company achieved revenue of 2.074 billion yuan, a year-on-year decrease of 3.81%, and a net loss of 11 million yuan compared to a net profit of 22 million yuan in the same period last year [4]. - In Q3 2025, the company recorded revenue of 678 million yuan, down 4.84% year-on-year, with a net profit of 11 million yuan, a significant decrease of 77.60% year-on-year [4]. Product Category Performance - Revenue from various product categories in Q3 2025 included 358 million yuan from ambient dairy products, 264 million yuan from chilled dairy products, and 30 million yuan from livestock products, reflecting declines of 3.81% and 5.87% respectively, while livestock products saw an increase of 80.08% [5]. - The overall market demand remains weak, with ongoing price competition affecting revenue from both ambient and chilled dairy products [5]. Regional Performance - Revenue from the domestic market in Q3 2025 was 358 million yuan, up 10.16% year-on-year, while revenue from outside the region was 300 million yuan, down 13.68% [5]. - The company is expanding its sales network through various channels, including airports and convenience stores, to enhance consumer reach [5]. Sales Model Analysis - In Q3 2025, revenue from the distribution model was 580 million yuan, down 8.06% year-on-year, while direct sales revenue increased by 88.32% to 78 million yuan [5]. - The growth in direct sales is attributed to the establishment of an e-commerce subsidiary and the transition of the sub-brand Jiali from a distribution model to a direct sales model [5]. Profitability and Cost Analysis - The gross margin for Q1-Q3 2025 was 16.17%, decreasing to 14.72% in Q3 2025, reflecting a year-on-year decline of 5.14 percentage points [6]. - The increase in sales expenses is linked to promotional activities, with the sales expense ratio for Q3 2025 at 6.46%, up 0.06 percentage points year-on-year [6]. - The net profit margin for Q3 2025 was 1.66%, down 5.38 percentage points year-on-year, indicating pressure on profitability due to market conditions and inventory impairments [6].