Core Insights - The report from the 16th China Dairy Conference highlights the significant advancements in China's dairy industry over the past two decades, particularly in milk source construction, yield levels, and product quality, with key indicators surpassing EU standards [1] Group 1: Industry Developments - China's dairy industry has seen continuous improvements in milk quality, with protein, fat, somatic cell counts, and total bacterial counts all exceeding EU standards [1] - The industry leader, Yili, has demonstrated superior raw milk quality, particularly in bacterial counts [1] Group 2: Technological Innovations - Yili's Chulu Ecological Smart Ranch employs fully automated management systems, including automatic feeding, milking, and waste management, ensuring optimal conditions for dairy cows [2] - The ranch utilizes a green circular economy model, converting waste into organic fertilizers for pasture cultivation, and incorporates renewable energy sources to promote sustainable practices [2] Group 3: Manufacturing Efficiency - Yili's Global Smart Manufacturing Base features advanced production technologies, including the world's largest pre-pasteurization machine and high-speed packaging systems, achieving a 20% reduction in operational costs [5] - The facility's production capacity has increased dramatically, with milk powder production scaling from 0.5 tons/hour to 10 tons/hour, representing a 20-fold efficiency improvement [5] Group 4: Research and Development - The National Dairy Technology Innovation Center, as China's only national-level platform, focuses on key research areas and has made significant breakthroughs in critical technologies, such as the extraction of lactoferrin [8] - The center's innovations have improved the retention rate of lactoferrin in milk from 10% to 90%, overcoming previous technological barriers [8] Group 5: Overall Industry Impact - The integration of ecological ranching, intelligent manufacturing, and cutting-edge research is transforming China's dairy industry into a complete, green, and sustainable value chain [9] - The rapid advancements in the industry have significantly narrowed the gap with developed dairy nations, achieving in two decades what took others over a century [9]

Core Insights - Yili's revenue and net profit have declined for the first time in 29 years, with 2024 revenue at 115.39 billion, down 8.24% year-on-year, and net profit at 8.45 billion, down 18.9% [2][3] - Liquid milk, the core revenue driver, saw a significant revenue drop of 10.5 billion, a decrease of 12% [2][3] - The company's chairman, Pan Gang, experienced a slight salary reduction from 21.79 million to 19.74 million amid the performance decline [2] Revenue Performance - Yili's total revenue for 2024 was 115.39 billion, a decrease of 8.24% year-on-year, with net profit at 8.45 billion, down 18.9% [3][6] - Liquid milk revenue fell to 75 billion, a decline of over 12%, while the cold drink segment also saw a significant drop, with revenue at 8.72 billion, down 18.41% [3][5] - The share of liquid milk in total revenue has decreased from over 75% in previous years to approximately 65% in 2024 [6] Strategic Challenges - Yili has been facing challenges in its core liquid milk business, which has historically driven growth [5][6] - The company has invested approximately 6.3 billion in the infant formula sector, acquiring a stake in Aoyou Dairy, but this segment has also shown declining revenue and profits [7][9] - Aoyou's revenue fell from 8.575 billion in 2021 to 7.382 billion in 2023, with net profit dropping significantly [9][11] Future Outlook - Despite current challenges, Pan Gang expressed confidence in a gradual recovery of the consumer market, anticipating a return to growth in 2025 [14] - Yili is exploring new product lines, including ready-to-drink tea and other food categories, although these currently contribute minimally to overall revenue [13][14] - The company believes there is still growth potential in the dairy market, particularly in lower-tier cities where consumption is expected to rise [14]