HK Stock Market Move | YOURAN DAIRY(09858) rises over 7% in the afternoon, full-year losses narrowing by nearly 40%, institutions are optimistic about the improvement of the core business profitability this year.

YOURAN DAIRY (09858) rose by more than 7% in the afternoon, with an increase of 7.37% by the time of publication, reaching HK$4.08 with a trading volume of HK$1.14 billion. On the news front, YOURAN DAIRY announced its annual performance, achieving a total operating income of RMB 25.674 billion, a year-on-year growth of 4.51%. It reported a net loss of RMB 432 million, narrowing the loss by 37.42% year-on-year. Huatai stated that YOURAN DAIRY's performance was lower than expected mainly due to the disturbance of biological asset impairment, but the company has shown strong cost control ability and stable cash profits in the background of low raw milk prices and industry capacity digestion. The bank believes that in the complex background of 25 years of low raw milk prices and continuous industry capacity digestion, the company has demonstrated strong cost control capabilities, with a 10.5% year-on-year decrease in kilogram feed costs, and a stable cash EBITDA, up by 4.9% year-on-year. Looking forward to 26, it is expected that milk prices will stabilize and rise, while beef cattle prices continue to rise, combined with the company's ongoing optimization of its cattle herd structure, the core business is expected to achieve profit improvement. The "buy" rating is maintained.