Understanding the Market | Livestock Stocks Continue to Rise, Dairy Cow Capacity Reduction May Be Nearing Its End, Institutions Say Dairy-Meat Linkage Model Companies Have Outstanding Profitability

Livestock stocks continue to rise. As of the time of writing, YOURAN DAIRY is up 10.26%, trading at HKD 3.33; CHINA SHENGMU is up 9.23%, trading at HKD 0.355; YST DAIRY is up 3.39%, trading at HKD 0.305; CH MODERN D is up 2.36%, trading at HKD 1.3. In terms of news, YST DAIRY announced that it has signed an agreement with its controlling shareholder China Feihe to supply raw milk from 2026 to 2028, with proposed annual sales caps of RMB 3.1 billion, 3.4 billion, and 3.7 billion, accounting for 96% of total revenue; the price of the raw milk to be supplied will not be lower than the prices offered to the group's independent third-party customers. Tianfeng Securities pointed out that the current reduction in dairy cow capacity may be nearing its end, and the financial pressure from Q3 silage purchases may accelerate the clearing of margins, with raw milk prices expected to bottom out and rebound; beef prices may reach a turning point, but due to multiple factors such as funding, confidence, and environmental protection affecting restocking enthusiasm, the subsequent increase and sustainability may exceed expectations. Companies with cow resources or adopting a "milk-meat linkage" model will have more prominent profitability. It is recommended to pay attention to YOURAN DAIRY, CHINA SHENGMU, Bright Meat Industry, CH MODERN D, and Aoyah Group

YST DAIRY has entered into a raw milk supply agreement with its controlling shareholder

YST DAIRY has signed an agreement with its controlling shareholder China Feihe to supply raw milk between 2026 and 2028, with annual sales caps of 3.1 billion yuan, 3.4 billion yuan, and 3.7 billion yuan, accounting for 96% of total revenue. The price of raw milk will not be lower than the price charged to the group's independent third-party customers. Feihe Dairy has been the group's largest customer since 2017, and as its business grows, the demand for raw milk is also increasing

YST DAIRY announced its interim results, with a net profit of approximately 119 million yuan, a year-on-year decrease of 7.85%

YST DAIRY announced its mid-term results for 2025, with revenue of approximately RMB 1.312 billion, a year-on-year increase of 8.88%; net profit of approximately RMB 119 million, a year-on-year decrease of 7.85%; earnings per share of RMB 0.025. During the reporting period, the sales volume of raw milk was 304,729 tons, a year-on-year increase of 17.6%. The average selling price of raw milk was RMB 4,305 per ton, a year-on-year decrease of 7.4%

YST DAIRY: Zhu Zhanbo resigns as independent non-executive director

According to the Zhitong Finance APP, YST DAIRY announced that Mr. Zhu Zhanbo has requested to resign as an independent non-executive director due to other commitments requiring more of his time and energy, effective from August 20, 2025. Following his resignation, he will no longer serve as the chairman of the company's nomination committee, a member of the audit committee, or a member of the remuneration committee. From the same date, independent non-executive director Ms. Liu Jinping has been appointed as the chairman of the nomination committee and a member of the remuneration committee

Hong Kong stock dairy shares surged across the board, with AUSTASIA GROUP rising over 37%, CH MODERN D up 15%, YST DAIRY and CHINA SHENGMU rising over 10%, YOURAN DAIRY up over 8%, and AUSNUTRIA rising nearly 5%