A-Share Subscription | Nanfang Dairy (920196.BJ) Opens for Subscription, Mainly Engaged in the Manufacturing and Sales of Dairy Products and Milk-Containing Beverages

On September 28, Nanfang Dairy (920196.BJ) opened for subscription at an issue price of RMB 14.21 per share, with a subscription cap of 1,231,400 shares and a price-to-earnings ratio of 11.99 times. It is listed on the Beijing Stock Exchange, with CITIC SEC acting as its sponsor. According to the prospectus, Nanfang Dairy is mainly engaged in the manufacturing and sales of dairy products and milk-containing beverages. During the reporting period, the company integrated the R&D, production, and sales of dairy products and milk beverages with dairy livestock farming. Its main products include various low-temperature dairy products (pasteurized milk, fermented milk, low-temperature modified milk), ambient dairy products (sterilized milk, modified milk), milk-containing beverages, other dairy products, and raw fresh milk. The company's main products are dairy products and milk-containing beverages. As the terminal consumer market is relatively fragmented, the company adopts a sales model combining distribution and direct sales to expand market coverage. Under the distribution model, the company sells products directly to distributors on an outright-sale basis, and distributors then sell them to retail terminals or end consumers. The company's direct sales model includes: sales to large supermarkets, community supermarkets, and chain convenience stores; group purchase sales; sales to grocery stores and subsidiary food stores; e-commerce platform sales; home milk delivery; and specialty store retail. Raw fresh milk is the company's main raw material for procurement. When selecting raw fresh milk suppliers, the company evaluates them based on quality management standards, animal inspection and quarantine, dairy cow feeding conditions, infrastructure support standards, hardware equipment standards, large-scale farming conditions, personnel professionalism, operational standardization, and hygiene conditions. It also samples and sends the raw fresh milk they produce for testing. Only after on-site inspections and sample tests both pass is it sent to the dairy plant workshop for trial use. Only after the product trial passes can the supplier enter the list of qualified suppliers. At the same time, the company's pasture management department regularly and irregularly organizes re-inspections of qualified suppliers and implements dynamic management. During the reporting period, the company purchased raw fresh milk from its own pastures, pastures of controlled subsidiaries, large third-party pastures, and professional cooperatives, which can fully guarantee the company's supply volume and supply quality of raw fresh milk. During the reporting period, the company's specific procurement of raw fresh milk from different types of entities was as follows: The company has always closely followed market innovation trends, actively explored consumer demand, and used demand as a guide to promote product innovation and upgrading. At present, the company owns dairy brands such as "Shanhua," "Huadu Pasture," "Huaxi Old Yogurt," and "Guicao," and has multiple product categories including ambient pure milk, low-temperature yogurt, low-temperature fresh milk, and milk-containing beverages, meeting consumers' diverse needs. At the same time, the company has also actively upgraded product formulas and processes to launch more personalized products for target segmented markets, including student drinking milk, 0-sucrose yogurt series, and ice cream yogurt. The company mainly produces through self-production, while some products are produced through entrusted processing. Overall, the company adopts a production model of producing according to sales, arranging production plans based on sales orders. The company's products are divided into low-temperature products and ambient products. Because the two types of products have different shelf lives, there are also differences when arranging production plans. Among them, low-temperature products, due to their short shelf life, adopt a strict production-according-to-sales model to quickly respond to consumers' requirements for product freshness, while strictly controlling inventory to ensure product freshness. Because ambient products have a longer shelf life, the production department adopts a "annual plan + monthly adjustment" model to maintain a safe and reasonable inventory level. According to data from the National Bureau of Statistics, in recent years China's milk output has generally shown an upward trend, reaching a high point in 2023; in 2024, due to the imbalance between supply and demand in the raw fresh milk market, raw fresh milk prices continued to decline, and milk output fell slightly. Since the second half of 2024, with the introduction of policies such as the Notice on Promoting the Stable Development of Beef Cattle and Dairy Cow Production to help the dairy industry overcome difficulties and stabilize basic production capacity, according to analyses in dairy industry research reports such as Huatai's "Dairy Products: Cycle Bottoming Out, Supply-Demand Reconstruction, Leading Players' Profitability Leaping," it is expected that the dairy cow farming industry is to return to supply-demand balance in 2026. In terms of financials, in 2023, 2024, and 2025, the company achieved operating revenue of approximately RMB 1.805 billion, RMB 1.817 billion, and RMB 1.839 billion, respectively; during the same periods, it recorded net profit of approximately RMB 195 million, RMB 202 million, and RMB 219 million, respectively.