Core Viewpoint - The leadership transition at Sichuan Jule Food Co., Ltd. is marked by the appointment of Gao Zhaohui as acting chairman due to the health issues of the current chairman, Tong Enwen, who has been instrumental in the company's growth and development over the years [2][3][6]. Group 1: Leadership Transition - Tong Enwen, the actual controller and chairman of Jule, is temporarily unable to perform his duties due to health reasons [2][3]. - Gao Zhaohui, who has been with the company since 2011 and is related to Tong, has been appointed to fulfill the chairman's responsibilities during this period [2][3]. - The company assures that daily operations are normal and will disclose any further developments as required [2][3]. Group 2: Company Background - Jule was founded in 1984 under Tong Enwen's leadership and has evolved from a pharmaceutical company to a well-known dairy enterprise in Sichuan [6]. - The company gained a foothold in the dairy market with its product "Suanle Milk" in 1996, and as of 2024, it holds 0.82% market share in China's milk beverage market, ranking eighth [6]. - Tong Enwen holds a significant stake in the company, with a total ownership of 42.87%, including 26.51% directly [6]. Group 3: IPO Attempts - Jule has made several attempts to go public, with four unsuccessful IPO attempts since 2017 due to various regulatory and operational challenges [7]. - The company is currently pursuing its fifth IPO attempt, shifting its focus from the Shenzhen Stock Exchange to the Beijing Stock Exchange [7]. Group 4: Financial Performance and Market Dependency - Jule's revenue has shown a steady increase from 1.472 billion yuan in 2022 to 1.641 billion yuan in 2024, with net profits rising from 172 million yuan to 232 million yuan during the same period [8]. - The company heavily relies on the Sichuan market, with revenue contributions from the region being 76.55%, 77.59%, and 76.03% over the last three years [8]. - To mitigate this regional dependency, Jule has made acquisitions to expand its national presence, although competition remains strong within the local market [8].

Investment Rating - The report gives an investment rating of "Overweight" for the dairy industry, indicating an expectation for the industry to outperform the overall market [65]. Core Insights - The dairy industry is experiencing a cyclical downturn in fresh milk prices, with a potential turning point expected in 2025. The price of fresh milk reached a low of 3.04 yuan/kg in July 2025, following a peak of 4.38 yuan/kg in August 2021. This cycle typically spans approximately eight years [21][30]. - The overall production of dairy products in China has increased from 26.518 million tons in 2014 to 29.618 million tons in 2024, with a compound annual growth rate of 1.11% [32][33]. - The report highlights a trend of consolidation in the dairy supply chain, with larger farms increasingly dominating the market. The number of farms with over 1,000 head of cattle has risen to 12% by 2022 [26][30]. Summary by Sections Dairy Industry Overview - The dairy industry has a long supply chain, including feed, dairy farming, processing, and retail. Major dairy companies are concentrated in regions such as Northwest, North China, and East China, particularly in Inner Mongolia and Zhejiang [3][11][17]. Fresh Milk Price Cycle - The fresh milk price cycle has shown a pattern of peaks and troughs approximately every eight years. The last peak was in February 2014 at 4.27 yuan/kg, followed by a decline that stabilized around 3.4 yuan/kg until 2015. The current cycle began in 2018, peaking in 2021 and declining to 3.04 yuan/kg by July 2025 [21][28][30]. Companies in the Dairy Sector - The report identifies 17 dairy-related companies listed on the New Third Board and the Beijing Stock Exchange. Notable companies include Knight Dairy, Jule Dairy, and Southern Dairy, with Knight Dairy being a listed entity and others in the process of listing [4][35]. - Knight Dairy has shown a steady revenue growth trend, with a revenue of 3.70 billion yuan in Q1 2025, marking a year-on-year increase of 55.88%. However, its net profit has declined by 38.70% [4][39]. - Jule Dairy, known for its "Suanle Milk" product, reported a revenue of 1.641 billion yuan in 2024, a 5.06% increase year-on-year, with a net profit of 232 million yuan, up 18.35% [5][52]. - Southern Dairy, recognized as a key enterprise in Guizhou, achieved a revenue of 1.817 billion yuan in 2024, reflecting a 0.65% growth, with a net profit of 209 million yuan, up 4.36% [6][59].

Core Viewpoint - Jule Foods Co., Ltd. has attempted to go public on the Beijing Stock Exchange after failing to list on the Shenzhen Stock Exchange for seven years, indicating a potential improvement in its financial fundamentals and a new strategy for growth [3][6]. Group 1: Company Background - Jule Foods, established in 1985, is a subsidiary of Chengdu Jule Enterprise Group and has been in the dairy industry since 1996, focusing on a complete industrial chain from milk sourcing to production and sales [5]. - The company has developed a significant product line, including its flagship product, "Suanle Milk," which has rapidly expanded its market presence in Sichuan, covering 98% of the county-level markets [5]. Group 2: IPO Attempts - Jule Foods has made five attempts to go public since 2017, facing various challenges including incomplete documentation, regulatory warnings, and financial issues, leading to multiple withdrawals of its IPO applications [6][8]. - The latest attempt to list on the Beijing Stock Exchange has been marked by the completion of its IPO guidance, raising questions about the improvements in its financial metrics [6][8]. Group 3: Financial Performance - The company's revenue has shown a notable increase from 8.29 billion in 2019 to an estimated 16.41 billion by 2024, representing a growth of 65.09% over five years [8]. - However, the net profit margin has fluctuated, with a decrease observed from 13.39% in 2019 to 11.12% in 2021, before showing signs of recovery [8]. - In 2024, Jule Foods is projected to generate 12.40 billion in revenue from Sichuan, accounting for 76.03% of total revenue, indicating a heavy reliance on the regional market [8]. Group 4: Business Structure and Innovation - The company’s main business, dairy beverages, accounted for 58.2% of total revenue in 2024, with a gross margin exceeding 40% [9]. - Jule Foods is exploring innovation through the development of yak milk products, aiming to establish a "second curve" for growth, with the yak milk market in China reaching approximately 2.624 billion in 2023 [11][12]. - The company has registered multiple subsidiaries to enhance its competitive edge in the dairy market, focusing on yak milk as a key product for the next 20 years [11]. Group 5: Market Challenges - Analysts have raised concerns about the sustainability of the dairy beverage market amid changing consumer trends, questioning whether Jule Foods can maintain growth in its core business [10]. - The limited market size for yak milk and the challenging conditions for its production may pose risks to the company's future performance and investor interest [12].

Core Viewpoint - Sichuan Jule Food Co., Ltd. has successfully passed the IPO guidance acceptance for the Beijing Stock Exchange, marking a significant step in its fifth attempt to enter the capital market since 2017 [1] Group 1: Company Background and Market Position - Jule Food, established in 1966, entered the dairy sector in 1996 and has become well-known for its "Suanle Milk" product, achieving a market share of 54.6% in Chengdu and 20.7% in Sichuan, ranking fifth nationally in 2022 according to Nielsen [2] - The company is primarily owned by Jule Group, which holds 45.87% of the shares, with Chairman Tong Enwen as the actual controller [2] - From 2020 to 2024, the company's revenue grew from 994 million to 1.641 billion, and net profit increased from 130 million to 232 million, indicating a continuous growth trend [2] Group 2: Challenges and IPO History - Jule Food has faced significant challenges in its IPO journey, with four failed attempts since 2017 due to various issues, including incomplete materials and regulatory warnings [3] - After realizing the increased scrutiny on the main board, the company shifted its focus to the Beijing Stock Exchange and successfully completed the guidance process in a record time of nine months [3] Group 3: R&D and Innovation - The company has historically had low R&D investment, with expenses of 6.3 million, 4.741 million, and 5.149 million from 2022 to 2024, representing only 0.42%, 0.30%, and 0.31% of revenue, respectively [4] - To meet the Beijing Stock Exchange's requirement for intellectual property, Jule Food has applied for 10 patents since September 2024, with 6 granted, which will be crucial for its IPO process [4] Group 4: Future Prospects and Market Strategy - Regional dairy companies like Jule Food face dual challenges of expanding beyond local markets and avoiding the "post-IPO peak" performance trap [5] - The effectiveness of the funds raised and the implementation of a national expansion strategy will be critical in determining the company's ability to overcome industry challenges if it successfully lists on the Beijing Stock Exchange [5]