Tracking Hong Kong stock market concepts | National childcare subsidy implementation plan announced Ministry of Agriculture and Rural Affairs accelerates dairy industry relief (with concept stocks)

The General Office of the Ministry of Agriculture and Rural Affairs issued a notice on "Speeding up the Relief of the Dairy Industry and Enhancing the High-quality Development of the Dairy Industry", proposing that localities should implement a white list system, promptly send lists of dairy farms with high production and operation levels and good credit to financial institutions, and "point-to-point" do a good job in docking financial policies. Promote banks to continuously innovate financial products such as "silage loans" to ensure the funding needs for the storage of silage feed on breeding farms. Projects that meet the conditions should be included in the reserve of the Agricultural and Rural Infrastructure Financing Project Library, and explore ways to provide support through interest subsidies. Strengthen accurate and effective communication between banks, government, enterprises, and households, guide financial institutions to provide credit support through extension and renewal loans, and not blindly reduce, cut off, or limit loans. Support the inclusion of live dairy cows and pens in the scope of collateral. Further implement dairy cattle policy insurance to ensure comprehensive protection. China Securities Co., Ltd. issued a research report stating that after nearly four years of decline, milk prices are at historically low levels, and the livestock industry is generally deeply losing money, with cash flow under pressure and a strong willingness to reduce industry inventory. In the second half of the year, there is a large demand for funding in the silage season, and with the increase in the price of culling cows, farms with weaker credit qualifications will accelerate the reduction by exchanging cows for grass; leading livestock companies are actively adjusting the cattle structure, improving the standard for retaining calves, and the new inventory added in 2020 will enter the natural culling period one after another. The industry's favorable factors for inventory reduction are increasing, and the bank is optimistic that the supply-demand relationship will further ease in the second half of the year, milk prices will gradually stabilize, and milk prices will rise in 2026-2027. The stabilizing and rising milk prices will drive the valuation increase of the livestock sector, paying attention to the clear of farm inventory and changes in downstream demand in the second half of the year, and seizing the opportunities for layout in the milk industry cyclicality. Guotai Haitong released a research report stating that on July 28, the implementation plan for the national childcare subsidy system was announced. "Guo Bu" officially entered the field of childbirth. The food and beverage team calculated that the annual average childcare subsidy is about 100 billion, which is expected to have a multiplier effect and may be further increased, boosting demand for dairy products and other industries. Considering the development trend of the age-eligible population, Guotai Haitong predicts that the number of births in the future will decrease, and the annual subsidy amount will also decrease accordingly, but it will still be a considerable fiscal expenditure. For the dairy industry, the national childcare subsidy is expected to drive related dairy consumption at the national level, especially for milk powder, etc., helping to boost sector prosperity and accelerate the convergence of supply-demand gap. Related Hong Kong-listed companies in the dairy industry include: AUSNUTRIA (01717), H&H International Holdings (01112), MENGNIU DAIRY (02319), CH MODERN D (01117), CHINA FEIHE (06186), YOURAN DAIRY (09858), YST DAIRY (01431), etc.