--- title: "Mengniu is still waiting for an industry turnaround: profitability slightly declines, asset clearance continues" type: "News" locale: "en" url: "https://longbridge.com/en/news/278195950.md" description: "Expectations of a turning point are rising" datetime: "2026-03-07T03:12:23.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/278195950.md) - [en](https://longbridge.com/en/news/278195950.md) - [zh-HK](https://longbridge.com/zh-HK/news/278195950.md) --- > Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/278195950.md) | [繁體中文](https://longbridge.com/zh-HK/news/278195950.md) # Mengniu is still waiting for an industry turnaround: profitability slightly declines, asset clearance continues The chill of the long cycle in the dairy industry has left a deep mark on Mengniu's financials for 2025. On March 6, Mengniu disclosed its performance forecast for 2025, indicating a year-on-year revenue decline of 7% to 8%, which is basically in line with the company's revised guidance during the mid-2025 performance meeting. However, there is a certain gap between the actual operating profit margin for 2025 and the management's target based on key indicators. When the semi-annual report for 2025 was released, management held a relatively optimistic view on the profit outlook for the second half of the year. At that time, Mengniu expected that despite pressure on revenue, the gross profit margin would benefit from the decline in raw milk prices and the ongoing cost reduction and efficiency improvement measures, with the annual operating profit margin expected to be on par with 8.2% in 2024. The latest forecast shows that the operating profit margin for 2025 is expected to fall between 7.9% and 8.1%, a slight year-on-year decline. To cope with the cyclical adjustments in the industry, Mengniu continues to strengthen its asset clearance efforts. According to the latest announcement, the company plans to make an impairment provision of approximately 2.2 billion to 2.4 billion yuan for idle production facilities and some questionable financial assets. In comparison, the impairment provision of about 4 billion yuan in 2024 due to Bellamy goodwill was significantly larger, so Mengniu has set its full-year net profit expectation at 1.4 billion to 1.6 billion yuan. On the actual business front, benefiting from the stabilization of raw milk prices and a recovery in demand, Mengniu's liquid milk revenue saw a quarter-on-quarter rebound in the second half of 2025; categories such as fresh milk, milk powder, and cheese recorded double-digit growth for the year, highlighting a trend towards diversification. In addition, Mengniu is also deepening its B-end tea and coffee supply chain through its "Milk Cube" division, actively building a new growth logic. The industry has not yet reached a turning point. Feedback from channels indicates that dairy products performed flat overall during this year's Spring Festival. Wang Xuewei, a partner at Siyuan Hengyue, stated that both Yili and Mengniu experienced single-digit declines, with Mengniu's decline being slightly deeper. In addition to the supply-demand imbalance not being fundamentally alleviated, the diversification of holiday gift categories continues to show a substitution effect on traditional dairy products. However, signals of upstream supply clearance are gradually strengthening. Wang Xuewei told Xinfeng that the price of raw milk has rebounded to around 3 yuan per kilogram in January, basically on par with the contract milk price of 3.04 yuan, compressing the cost advantage of small and medium-sized dairy enterprises; currently, there is basically no phenomenon of spray drying in the industry, indicating that the supply-demand equilibrium point is gradually approaching. In his view, judging by the current inventory and destocking pace, the first half of 2026 is expected to complete capacity clearance, coupled with the rational expansion trend in the industry, milk prices may enter a relatively long upward cycle. "But before that, the market will still have fluctuations," Wang Xuewei reminded, "The Spring Festival data is not ideal, and in February, the price of raw milk fell again from around 3 yuan to below 2.7 yuan, reflecting that the current industry is still in a weak position." Market views suggest that Mengniu's current defensive posture, which includes reducing investments, strictly controlling capital expenditures, and accelerating asset depreciation, is essentially accumulating energy for a potential industry turning point in the first half of 2026 ### Related Stocks - [China Mengniu Dairy Company Limited (CIADY.US)](https://longbridge.com/en/quote/CIADY.US.md) ## Related News & Research - [T20 WC: Spin or pace, what should be India's go-to approach for final vs NZ](https://longbridge.com/en/news/278056413.md) - [BMO Doesn't See Toronto's Housing Market Picking Up in Spring](https://longbridge.com/en/news/278095341.md) - [Coffee Prices Push Higher on Global Supply Concerns](https://longbridge.com/en/news/278141211.md) - [Lululemon (LULU) Claims It Can Hide People's Sweat. But What About the Smell?](https://longbridge.com/en/news/277964876.md) - [What Does the Market Think About Lululemon Athletica Inc?](https://longbridge.com/en/news/277968153.md)