CH MODERN D(01117) achieved a gross profit of approximately 1.727 billion yuan in the first half of the year, an increase of 7.72% year-on-year.

CH MODERN D(01117) announced its mid-term performance for 2026, with revenue of approximately 6.593 billion yuan, a year-on-year increase of 8.6%; gross profit of about 1.727 billion yuan, a year-on-year increase of 7.72%; net profit attributable to equity shareholders of 15.29 million yuan, turning from loss to profit; basic earnings per share of 0.2 cents. The announcement stated that the turnaround to profit was mainly due to a significant reduction in losses from the fair value changes of dairy cows as a result of decreased costs of milk cow sales, along with an increase in gross profit. In the first half of 2026, despite improvements in the market environment, the group continued to implement various cost-cutting and efficiency-enhancing measures, optimizing herd structure and increasing milk yield per cow. During the period, the number of culling cows decreased, coupled with a rise in culling prices, resulting in a year-on-year reduction in losses from changes in fair value of dairy cows. The gross profit from the sale of raw milk also increased, maintaining stable gross profit margins, while other operating costs and expenses were effectively controlled during the period. The group continued to enhance lean management of the farms, increasing the proportion and health level of the core herd, leading to significant improvements in major operating indicators during the period. The group achieved an average annualized milk yield per mature cow of 13.3 tons (2025: 13.2 tons), a year-on-year increase of 0.4%, with total milk production reaching 1.778 million tons (2025: 1.661 million tons), a year-on-year increase of 7.1%. The continued enhancement in the milk yield per mature cow is attributed to comprehensive and efficient herd management and meticulous adjustments, including cross-generational genetic optimization of dairy cows, extending the lactation peak period, and managing aspects such as parity, breed, living comfort, health status, and feed structure. As of July 20, 2026, the group and concerted parties held approximately 71.49% of the shares in China Shengmu Organic Milk Limited, with the offer becoming unconditional in all aspects. By the end of the offer period on August 3, 2026, the group held approximately 53.53% equity in China Shengmu, becoming its largest shareholder. This move enabled the group to quickly obtain scarce desert organic milk sources, improve product structure, and enhance high-end raw milk supply capabilities. Following the acquisition, the group significantly expanded its business scale and asset base, achieving economies of scale, improving synergy effects, reinforcing comprehensive operational and financial strength, and further consolidating the groups leading position in the raw milk supply market.