HK Stock Market Move | YOURAN DAIRY (09858) saw a rise of over 5% in the morning session, with the supply-demand gap in the raw milk industry expected to accelerate convergence. The company will benefit from the reversal of the raw milk cycle.

YOURAN DAIRY (09858) rose more than 5% in early trading, as of the time of writing, it has risen by 4.39% to HKD 2.38, with a turnover of HKD 213.457 million. Guotai He Tong released a research report stating that recently, many places have introduced detailed guidelines for childbirth subsidies. Some dairy companies have voluntarily proposed childbirth subsidy plans, which are expected to boost the recovery of categories such as infant formula and liquid milk, accelerating the process of supply and demand balance in the dairy industry. Considering that the dairy products industry is at a triple bottom in terms of supply, demand, and inventory, destocking is an important drive for the convergence of supply and demand imbalances in this cycle. With domestic demand and childbirth-related policies catalyzing, the outlook is expected to improve faster, speeding up this process. Huaxi also stated that looking ahead to this year's milk prices, we believe that the clearance of supply and the gradual recovery of demand following the implementation of various policies may lead to a turning point in milk prices coinciding with the consumption peak during the Mid-Autumn Festival and National Day starting from the second half of this year. In the medium term, we believe that due to the difficulty of short-term capacity replenishment after the clearance of supply side production capacity, the market may maintain a tight balance for the next 2-3 years. As a leading company in the industry, YOURAN DAIRY is expected to benefit from this industry adjustment and the future cycle reversal will release significant elasticity.