--- title: "Milkground Inherits Mengniu Dairy's Cheese Assets, Records Over 30% Revenue Growth for Two Consecutive Quarters" type: "News" locale: "en" url: "https://longbridge.com/en/news/284318533.md" description: "Following enhanced synergy with MENGNIU DAIRY, Milkground achieved revenue of RMB 1.626 billion in Q1 2026, a year-on-year increase of 31.81%, marking the second consecutive quarter with growth exceeding 30%. Net profit attributable to shareholders, excluding non-recurring items, rose 11.94% year-on-year. Since MENGNIU DAIRY integrated its cheese business into Milkground in 2024, the two parties have deepened collaboration in areas such as milk sources and procurement, driving upgrades in business structure. In Q1 2026, both consumer-facing (C-end) and business-facing (B-end) segments recorded growth exceeding 20%, with the B-end becoming a significant source of incremental growth. The company has strengthened market recognition and partnerships through collaborations with leading foodservice brands like McDonald's" datetime: "2026-04-28T05:47:06.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/284318533.md) - [en](https://longbridge.com/en/news/284318533.md) - [zh-HK](https://longbridge.com/zh-HK/news/284318533.md) --- # Milkground Inherits Mengniu Dairy's Cheese Assets, Records Over 30% Revenue Growth for Two Consecutive Quarters Milkground has accelerated its growth following deepened synergy with MENGNIU DAIRY. In Q1 2026, the company reported revenue of RMB 1.626 billion, a year-on-year increase of 31.81%, marking the second consecutive quarter with growth exceeding 30%; net profit attributable to shareholders, excluding non-recurring items, rose 11.94% year-on-year. As the first full quarter following the departure of founder Chai Xiu and subsequent management changes, these results not only addressed market concerns but also served as a key milestone to test the effectiveness of the "MENGNIU DAIRY synergy." Since MENGNIU DAIRY formally integrated its cheese business into Milkground in 2024, collaboration between the two parties has continued to deepen in areas such as milk sources, procurement, production lines, and distribution channels. In November 2025, Chen Yiyi, Vice President of MENGNIU DAIRY Group and Chairman of Milkground, publicly stated that MENGNIU DAIRY remained "firmly optimistic about Milkground's development," expressing confidence that its deep cultivation of the cheese sector would "certainly achieve new substantial development and high growth again." On the supply side, leveraging MENGNIU DAIRY's guaranteed milk sources and global procurement capabilities, Milkground has secured more stable raw material supplies and a more flexible cost structure, while enhancing scale effects through regional complementarity in deep-processing capacity. At the asset and product level, the "Two Oils and One Cheese" pattern, comprising "Arla Foods Ingredients butterfat + Milkground cheese," is gradually taking shape, shifting the business focus from single-product cheese sticks to a full-category portfolio. In 2025, revenue from Milkground's core cheese business accounted for over 80%; the share of liquid milk business dropped to 6.51%, with production lines retrofitted to produce cheese-related ingredients such as whipping cream and mascarpone, simultaneously advancing structural contraction and upgrading. On this basis, the dual-drive model of B-end and C-end businesses has begun to show results. In Q1 2026, both C-end and B-end segments achieved growth exceeding 20%, with the B-end emerging as the most structurally significant source of incremental growth. Leveraging the "Two Oils and One Cheese" product portfolio, the company has accelerated its entry into Western cuisine, baking, tea and coffee, and chain catering systems. Products such as original mozzarella and mascarpone have entered multiple leading chain catering clients, gradually validating its supply chain capabilities. Collaboration with leading foodservice brands has also extended from supply to brand linkage. In Q1, the company launched a points redemption campaign with McDonald's. Approximately 80,000 of the initial 100,000 units were redeemed within one hour of launch. This "experiential" approach expanded the consumer base, reinforcing C-end awareness while simultaneously strengthening B-end partnerships. On the C-end, while stabilizing its core children's product base, the company is accelerating expansion into adult nutrition and ready-to-eat scenarios. It plans to focus on niche demands such as calcium supplementation for the middle-aged and elderly in the future, thereby expanding its consumer base. Strategically, in March 2026, the company released its "13434" Cheese Ecosystem Strategy, clearly focusing on three major categories: cheese, milk fat, and whey. Mergers and acquisitions and overseas expansion have become new growth engines alongside B-end and C-end businesses. In Q1, Milkground signed a memorandum of understanding with Saudi dairy company SADAFCO, aiming to leverage its distribution network in the Middle East to advance localization and expand into the Gulf region. Meanwhile, leveraging MENGNIU DAIRY's channel resources in Southeast Asia, its products have entered markets such as Singapore and Thailand. The company stated that it will establish an international business team in the future and deploy overseas production capacity as appropriate. Its M&A focus will be on highly synergistic areas such as deep processing in the dairy industry and functional foods. However, rapid expansion comes with pressure. Sales expenses in Q1 increased by approximately 48% year-on-year to RMB 307 million, significantly outpacing revenue growth; net operating cash flow declined by approximately 48% year-on-year to RMB 62.69 million, indicating increased capital occupation due to channel expansion and market investment. In the medium to long term, the impact of the rising B-end share on gross margin, along with uncertainties regarding overseas expansion and new product volume ramp-up, remains to be continuously verified. For Milkground, how it converts "MENGNIU DAIRY synergy" into stable profits and cash flow will determine the sustainability of this round of high growth. 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