HK Stock Market Move | YOURAN DAIRY (09858) rises by over 11% again, with the price of raw milk expected to reach a turning point. Institutions are bullish on the prosperity of the meat and dairy industries resonating with each other.

YOURAN DAIRY (09858) surged more than 11%, with its stock price nearly doubling so far this year. As of the release of this article, it rose by 11.38% to 3.62 Hong Kong dollars, with a turnover of 175 million Hong Kong dollars. It is reported that YOURAN DAIRY is the largest dairy farming group in the country, with 97 ranches nationwide and an annual production of 3.75 million tons (24 years). In recent years, the dairy cow stock has continued to expand, with the acquisition of Saixing and Hengtianran ranches in 2020 and 2021, respectively, and the dairy cow stock reached 621,600 in 2024. Guosen mentioned that dairy farming companies benefit from the prosperity of the meat and dairy industry and have a high potential for profit recovery. The dairy farming business has a normal elimination rate of about 30% every year, so dairy companies sell a large number of dairy cows every year, and the price of eliminated cows is positively correlated with the price of beef, with similar growth rates. The bank stated that the financial statements of dairy farming companies listed on the Hong Kong stock exchange will measure the profit and loss of this business through fair value measurement, and it is not directly reflected in the main operating revenue. The bank believes that this business is a part of the sustainable operation of dairy farming companies and affects the company's cash flow. With the future reversal of beef prices, the elasticity of selling cows profit will become apparent, and the company's cash flow is expected to improve simultaneously, so the valuation of selling cow profits should be reconsidered. Sinolink pointed out that with the gradual transmission of capacity absorption on the supply side, raw milk prices are expected to stabilize and rise in the second half of 2025; in terms of beef cattle, the prices of calves and live cattle have recently risen, and a new beef cattle cycle is expected to begin soon.