Core Viewpoint - Mengniu Dairy reported a decline in revenue and net profit for the first half of 2025, indicating challenges in the liquid milk segment while other product categories showed growth [3][4]. Revenue Performance - In H1 2025, Mengniu achieved a revenue of 41.567 billion yuan, a year-on-year decrease of 6.95%, with a net profit of 2.046 billion yuan, down 16.37% [3]. - Revenue breakdown by product: liquid milk 32.192 billion yuan (-11.2%), ice cream 3.879 billion yuan (+15.0%), milk powder 1.676 billion yuan (+2.5%), cheese 2.374 billion yuan (+12.3%), and other dairy products 1.447 billion yuan (+12.4%) [4]. Business Segment Analysis - Liquid milk business faced a decline due to weak consumer demand and price adjustments, while other categories like ice cream and milk powder saw positive growth [4]. - Ice cream introduced innovative products, with some becoming bestsellers, and entered the Hong Kong market [4]. - The milk powder segment, particularly the high-end product line, experienced significant growth, with revenue from Bellamy's increasing over 20% [4]. Profitability and Cost Management - The gross margin for H1 2025 was 41.7%, an increase of 1.5 percentage points, primarily due to falling raw milk prices [5]. - Selling expense ratio decreased to 27.9% (-0.4 percentage points) due to improved expense management, while management expense ratio increased to 4.7% (+0.3 percentage points) [5]. - Operating profit margin improved to 8.5% (+1.5 percentage points), but net profit margin decreased to 4.9% (-0.6 percentage points) due to losses from joint ventures [5]. Future Outlook - The company anticipates improved performance in H2 2025 by adjusting pricing strategies and managing channel inventory, with expectations for stable operating profit margins for the full year [6].

Core Insights - In the first half of 2025, Mengniu Dairy Company has made significant progress in its internationalization strategy, with multiple brands performing well in overseas markets [1] - The company is focusing on high-growth potential markets and optimizing global resource allocation through a "one body, two wings" strategic framework [1] Group 1: International Expansion - The Aisle Ice Cream brand has maintained its leading position in Southeast Asia while gradually expanding into emerging markets such as Africa and Latin America [1] - Aisle has received over $100 million in additional investment from strategic shareholders to support its rapid expansion in Southeast Asia and other new markets [1] - Aisle's localized operational strategy has led to rapid business scale expansion since entering the Indonesian market in 2015 [1][2] Group 2: Product Development and Market Penetration - Aisle has developed a dessert series of ice cream products tailored to Indonesian consumer preferences, gaining market recognition [2] - The brand has implemented an "ice cabinet deployment plan," placing nearly 600,000 ice cabinets in rural areas, covering about 400,000 retail terminals [2] - Aisle's annual sales in Indonesia grew from 20 million to 1.2 billion yuan within three years, achieving a market share of 34% [2] Group 3: Supply Chain and Production - Aisle has established a complete localized supply chain system, including joint ventures for cold chain infrastructure and three self-built production bases in Indonesia [2] - The brand has built four production bases in Southeast Asia, creating a solid competitive barrier through its "R&D + channel + supply chain" localized operational model [2] Group 4: Global Strategy - Aisle is accelerating its global expansion by targeting Africa and Latin America, having completed the business structure setup for these regions [3] - In Africa, Aisle is forming a localized operational team and developing products suited to local consumer tastes and spending levels [3] - In Latin America, Aisle has chosen Brazil as its entry point and is building a localized marketing system [3] Group 5: Bellamy's Growth - Bellamy, as a key pillar of Mengniu's international strategy, is showing strong growth momentum in the Southeast Asian market [3] - The brand has successfully upgraded its product line in Vietnam, with new products launched in both Australia and Vietnam [4] - Bellamy's brand influence in Vietnam is increasing, supported by media coverage and visits from government representatives [4]