Investment Rating - The investment rating for the company is "Buy" with a target price not specified [8] Core Views - The company achieved a revenue of 487 million yuan in the first half of 2025, representing a year-on-year increase of 21.7%, and a net profit attributable to shareholders of 220 million yuan, up 44.1% year-on-year [1] - The demand for animal health products remains strong due to improved profitability in the breeding sector, leading to a 17% increase in batch approvals in the first half of 2025 [2] - Vaccine sales have improved significantly, with a 43% year-on-year increase in batch approvals for vaccines in the first half of 2025, driven by strong industry demand and the launch of new products [3] - The company is focusing on research and development, with R&D expenses rising to 9.34% of total revenue, which has led to the successful launch of several new products [4] - The company is expected to benefit from the release of multiple new products in 2025-2027, with projected revenues of 1.22 billion, 1.31 billion, and 1.57 billion yuan, respectively, indicating a growth rate of 29%, 8%, and 19% [5] Financial Summary - The company reported a gross margin of 67% and a net margin of 45% for the first half of 2025, with improvements in profitability despite challenges in the downstream market [3] - The projected net profit for 2025 is 449 million yuan, with a year-on-year growth of 17.4%, and the corresponding P/E ratios for 2025, 2026, and 2027 are 20, 17, and 14, respectively [6][5]

Core Insights - Hohhot's dairy industry is leveraging full-chain technological innovation to achieve breakthroughs, from grass breeding to dairy processing, forming a complete ecological chain from "a blade of grass" to "a cup of milk" [1][6] Group 1: Technological Advancements - The construction of a probiotic smart factory in Hohhot has led to the domestic production of 7 types of yogurt fermentation agents, previously reliant on imports, reducing costs and increasing self-sufficiency [3] - The Inner Mongolia Kete Biological Company has established the world's largest lactic acid bacteria germplasm resource bank, with a projected annual output value increase of 4 billion yuan and tax revenue of 1.5 billion yuan upon full production [3] - The National Dairy Technology Innovation Center is focusing on key links in the entire industry chain, aiming to break international seed source monopolies and achieve self-sufficiency in high-quality breeding [5] Group 2: Research and Development - The National Dairy Technology Innovation Center has initiated 237 out of 600 research projects, with breakthroughs in areas such as milk protein preparation and the development of lactose-free milk powder [5] - The establishment of a high-throughput phenotyping robot at the National Grass Technology Innovation Center has significantly improved breeding efficiency, shortening the breeding cycle for alfalfa by 4-5 years [6] - The development of a new β-galactosidase technology has led to the launch of China's first fully enzyme-based lactose-free milk powder, addressing the reliance on imported key raw materials [5] Group 3: Industry Ecosystem - Hohhot's dairy industry has formed a complete innovation system that spans from grass breeding to dairy product sales, creating a high-quality development "ecological closed loop" [6] - The integration of various technological innovations across the entire industry chain supports the overall growth and competitiveness of the dairy sector [6][7]