Huatai Securities: Meat and milk may achieve cyclical resonance, the profits and valuation elasticity of upstream leading dairy companies are expected to be realized.

Huatai Securities pointed out that the beef cattle cycle is entering an upward phase, with supply-side de-stocking leading the current market trend. It is calculated that the total domestic beef supply in 2025-2027 will be -3.3%/-6.4%/+1.3% year-on-year, with the supply-demand gap reaching a peak of 1.47 million tons per year in 2026. The peak of beef prices may appear at the end of 2028. The increase in beef prices in this round may exceed the previous cycle, mainly due to the weakening impact of imports in the background of the global beef cycle heading upwards, and the amplification of supply-demand mismatch caused by delayed transmission of domestic production capacity. In terms of recommendations, it is speculated that there may be a cyclical resonance between meat and milk, and the profit and valuation elasticity of upstream leading dairy companies are expected to become evident.