Investment Rating - The investment rating for the company is "Buy" and is maintained [1] Core Views - The company is positioned to lead in the low-temperature dairy market, with a focus on enhancing profitability through strategic initiatives and product innovation [2][23] - The overall dairy industry in China is experiencing a downturn, but low-temperature dairy products are gaining traction due to their freshness and functional benefits, indicating a shift in consumer preferences [2][10] - The company aims for double-digit compound annual growth in revenue from 2023 to 2027, with a target to double its net profit margin [2][45] Industry Overview - The dairy industry in China is under pressure, with a projected decline in the milk and yogurt market from 2022 to 2024, with a compound annual growth rate of -4.18% [9] - Low-temperature dairy products are outperforming their ambient counterparts, with their market share increasing from 29.97% to 33.82% for yogurt and from 16.53% to 16.91% for fresh milk between 2021 and 2023 [2][18] - The competitive landscape for low-temperature dairy is relatively fragmented, with significant room for market concentration compared to the high concentration in ambient dairy products [2][21] Company Overview - The company is projected to achieve a revenue of 10.665 billion in 2024, with a product matrix that includes both ambient and low-temperature dairy products [2][25] - The company has established a national presence through three rounds of acquisitions, differentiating itself from major competitors like Yili and Mengniu [2][29] - The company operates 52 subsidiaries and has a diverse brand portfolio under the "New Hope" umbrella, optimizing resource allocation across its brands [2][25] Growth Drivers - The company is expected to achieve revenue and profit growth in 2023-2024, driven primarily by the performance of low-temperature products [2][58] - The company maintains a strong focus on high-quality milk sources, with approximately 60% of its supply coming from self-owned and joint-venture sources [2][64] - The DTC (Direct-to-Consumer) channel is a core strategic focus, with plans to increase its contribution from 15% to 30% by 2027 [2][78] Profitability Enhancement Path - The company's net profit margin is expected to improve primarily due to an increase in gross margin, supported by an optimized cost structure [2][83] - The company has consistently achieved a double-digit revenue contribution from new products, indicating a strong innovation pipeline [2][68] - The gross margin is projected to rise as the company continues to enhance its product mix and optimize operational efficiencies [2][84]

Core Viewpoint - New Hope Dairy is focusing on high-quality growth through product innovation and a user-centered approach, showcasing its product matrix and strategies at the 2025 Investor Conference amidst a complex market environment in 2024 [1] Group 1: Product Strategy - New Hope Dairy has established a "fresh strategy" since 2010, recognizing the potential of low-temperature dairy products, and has successfully launched the 24-hour fresh milk series, which saw a sales revenue increase of over 15% year-on-year in 2024 [3] - The company is expanding its core categories to include fresh milk, yogurt, and specialty beverages, achieving double-digit growth in new product revenue for four consecutive years [5] - New Hope Dairy's yogurt brands, "Chuxin" and "Huirun," have also experienced double-digit growth, showcasing strong product innovation capabilities [3][5] Group 2: Market Engagement - The company is enhancing its market penetration through immersive product experiences, such as the 24-hour fresh milk experience at the investor conference, and operates over 500 fresh milk stores nationwide [6] - New Hope Dairy is tapping into health-conscious consumer trends with products like "Chuxin" yogurt and "Huirun" yogurt, which cater to sugar reduction and weight management needs [8] Group 3: Cultural Integration - The company is leveraging cultural elements to appeal to the Z generation, integrating traditional crafts into its branding, exemplified by the "Today Fresh Milk" exhibit that combines heritage culture with modern branding [10] Group 4: Market Positioning - New Hope Dairy is addressing the dual demand for high-end and cost-effective products in the Chinese market by creating a comprehensive product portfolio that spans all consumer segments [12] - The company’s subsidiary, Asahi VIP, is targeting the high-end market with organic A2 milk, emphasizing sustainable farming practices and emotional branding [14] Group 5: Overall Strategy - New Hope Dairy is committed to building brand strength through quality products, innovative marketing, and a focus on fresh values, aiming to enhance consumer experiences and meet market opportunities [16]

Core Viewpoint - The "Fresh Decade, Quality Leads the Future" event marks the 10th anniversary of the Quality Milk Project, showcasing the transformation of China's dairy industry from a "follower" to a "definer" of quality standards [1][3]. Group 1: Quality Milk Project Overview - The Quality Milk Project was initiated in 2008 in response to a trust crisis in domestic milk, with market share dropping from 94% to 63% due to imported milk [3]. - Over the past decade, the project has established a standardized technical system across the entire dairy supply chain, defining indicators for 318 key control points across 14 stages [3]. - The project has developed the first international standard for non-denatured lactoferrin detection, emphasizing natural active nutrition as a core indicator [3]. Group 2: New Hope Dairy's Role - New Hope Dairy has been a pioneer in the Quality Milk Project since 2015, with its subsidiary, Xuelan Dairy, being the first company to pass the project's standards in 2016 [4]. - The company has enhanced its breeding, sourcing, and production technologies, participating in the formulation of 31 quality standards for milk [4]. - New Hope Dairy has the highest number of brands passing the Quality Milk Project standards, with a market share of 97% for pasteurized milk [4]. Group 3: Fresh Strategy and Product Innovation - New Hope Dairy's "Fresh" strategy, initiated in 2010, focuses on low-temperature processing, differentiating itself from the ambient milk market [6]. - The company launched the world's first "24-hour fresh milk," breaking the traditional sales period of 5-7 days for pasteurized milk, promising "freshness sold the same day" [6]. - The 24-hour fresh milk product line has evolved from 1.0 to 4.0, with significant improvements in pasteurization processes and immunoglobulin content, achieving up to 25 times the levels found in regular fresh milk [6][11]. Group 4: Consumer Engagement and Transparency - New Hope Dairy has implemented a "same-day shelf" sales model, enhancing consumer trust through visible freshness [11]. - The company has established a digital quality safety loop, integrating with government regulatory platforms to ensure transparency from farm to table [11]. - Initiatives like the "Nutrition Education Park" and various community activities aim to educate consumers about dairy products, fostering a deeper understanding of milk consumption [11]. Group 5: Future Outlook - The event signifies a milestone for national dairy enterprises, with New Hope Dairy committed to leading the Quality Milk Project into the next decade [13]. - The company aims to continue innovating within the fresh milk sector, reinforcing its position as a leader in the domestic dairy market [13].

Core Viewpoint - The company reported a slight decline in revenue for 2024 but achieved significant growth in net profit, indicating strong operational performance despite challenging market conditions [1][2]. Financial Performance - In 2024, the company achieved operating revenue of 10.665 billion, a year-on-year decrease of 2.93%, while net profit attributable to shareholders was 538 million, an increase of 24.80% [1]. - The fourth quarter of 2024 saw operating revenue of 2.516 billion, down 9.94%, but net profit rose by 28.08% to 64 million [1]. - For the first quarter of 2025, the company reported operating revenue of 2.625 billion, a slight increase of 0.42%, and net profit of 133 million, up 48.46% [1]. Product Strategy - The company focuses on its "Fresh and Sour Dual Strong" development strategy, achieving mid to high single-digit growth in low-temperature fresh milk and yogurt in 2024, with double-digit growth in high-end fresh milk and low-temperature modified milk [2]. - The "24-hour" fresh milk high-end series saw over 15% growth, and the "Active Moist" brand grew over 20%, with new product revenue maintaining a double-digit proportion [2]. Profitability Improvement - The company's gross margin and net profit margin for 2024 were 28.36% and 5.04%, respectively, reflecting year-on-year increases of 1.49 and 1.12 percentage points [3]. - Key factors for the gross margin improvement included enhanced product mix, strong performance in direct-to-consumer (DTC) channels, and cost advantages in raw milk [3]. - In Q1 2025, the gross margin was 29.50%, with a slight year-on-year increase of 0.12 percentage points, indicating stable profitability [3]. Strategic Outlook - The company is expected to continue its "Fresh Cube Strategy," solidifying its advantages in low-temperature fresh milk and yogurt, and is on track to meet its five-year net profit doubling target [4]. - Forecasts for net profit from 2025 to 2027 are 676 million, 816 million, and 938 million, representing year-on-year growth rates of 26%, 21%, and 15%, respectively [4].

Core Insights - New Dairy achieved a revenue of 10.665 billion yuan and a net profit of 538 million yuan in 2023, marking a 24.8% increase in net profit [1] - In Q1 2025, the company reported a revenue of 2.625 billion yuan and a net profit of 133 million yuan, reflecting a year-on-year increase of 48.46% [1] - The company is in the second year of its five-year strategic plan, focusing on boosting dairy consumption amid a slowing industry growth and intensified competition [1][3] Financial Performance - The net profit margin for Q1 2025 was 5.25%, an increase of 1.69 percentage points year-on-year [3] - Operating cash flow improved significantly, reaching 160 million yuan [3] - The asset-liability ratio decreased by 2.38 percentage points compared to the beginning of 2025, indicating improved financial health [3] Strategic Initiatives - New Dairy continues to implement its "Fresh Cube Strategy," focusing on core product categories, with low-temperature fresh milk and yogurt showing mid-single-digit growth [3] - High-end fresh milk and low-temperature modified milk achieved double-digit growth, with the "24-hour" fresh milk high-end series seeing over 15% revenue growth [3] - The company is actively involved in the "Quality Milk Project," enhancing quality from farm to table and participating in the establishment of 31 standards [3] Innovation and Development - In 2024, New Dairy filed 37 patent applications, including 14 invention patents, and received 19 patent grants, with 8 being invention patents [3] - The company has built a resource library of over 2,000 unique strains of lactic acid bacteria, leveraging key technologies for product innovation [3] Distribution and Retail Expansion - The "Fresh Go" system allows for nationwide delivery coverage across 141 cities and regions, with a standardized delivery process [4] - New Dairy has surpassed 500 image stores in 2024, enhancing its retail presence [4] - The company aims to achieve revenue growth and improved net profit margins in 2025, focusing on long-term value creation [4]