[CSC Food & Beverage | Yang Ji] Strong Call: Update on 'Dairy Cycle Reversal Year': Youran's Results Beat Expectations, Bulk Milk Prices Rise, Sector in Comfortable Position for Positioning

English summary

Raw milk price: Recently, ambient-temperature milk is in the off-season, but affected by high temperature and high humidity, dairy cows' production per cow declines due to heat stress, coupled with earlier production cuts from epidemics, leading to tight supply in major northern production areas. Bulk milk prices have risen significantly since April in many places. # From late August, with Mid-Autumn Festival peak-season stocking, release of deep-processing demand, and cattle prices rising under tariff policies, bulk milk prices are expected to continue rising, opening room for contract milk price outlook. Investment advice: Youran Modern's interim results beat expectations, already verified at the report level. With reduced bulk milk supply and coming peak demand season, bulk milk prices are likely to continue rising. The company guides price increases for Mid-Autumn Festival and National Day. # The logic cannot be falsified from now to 27Q1; there are differences in future contract milk price increases but cannot be falsified temporarily. With previous stock price adjustments and no obvious negative pressure ahead, it is in a comfortable range for positioning. Even if demand does not improve significantly, the supply-side logic continues. With interim results beating expectations, consensus strengthening, and sentiment switching, there is large room for market recovery. ...