Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company reported stable operating performance for Q3 2025, with a revenue of 90.56 billion yuan, a year-on-year increase of 1.7%, and a net profit attributable to shareholders of 10.426 billion yuan, a year-on-year decrease of 4.1% [3] - The company plans to increase its interim dividend, distributing a cash dividend of 0.48 yuan per share (before tax), with a dividend payout ratio of 29%, aiming to enhance shareholder returns [3] - The company maintains its profit forecast, expecting net profits attributable to shareholders to be 10.81 billion yuan, 11.64 billion yuan, and 12.41 billion yuan for 2025-2027, with corresponding EPS of 1.71 yuan, 1.84 yuan, and 1.96 yuan [3] Financial Performance - For Q3 2025, the company achieved a gross margin of 33.8%, a decrease of 1.1 percentage points year-on-year, attributed to weak milk prices and an increase in the proportion of basic white milk due to oversupply [5] - The sales expense ratio for Q3 2025 was 18.3%, down 0.7 percentage points year-on-year, indicating healthy channel inventory and cautious expense allocation [5] - The net profit margin for Q3 2025 was 11.3%, a slight decrease of 0.2 percentage points year-on-year, remaining stable amid weak demand and high profit base [5] Product Performance - The company’s liquid milk segment remains the industry leader, although it faces pressure, with a year-on-year decline of 8.8% in liquid milk sales [4] - The milk powder segment continues to expand its leading advantage, with a year-on-year increase of 12.65% in sales [4] - The company has successfully launched innovative products, such as the "chew lemon" flavored yogurt, contributing to double-digit growth in its yogurt segment [4] Future Outlook - The industry supply-demand dynamics are expected to improve, with a projected core net profit margin target of 9% for the year [6] - The company anticipates steady revenue growth due to the gradual resolution of upstream supply issues and the rollout of deep processing capacity [6] - The company’s international business is expanding, with the launch of the "Jindian" brand in Singapore, contributing to high growth in core categories [4]