Modern Dairy (09858) saw an intraday surge exceeding 8%, and as of press time, the stock is up 5.68% to HKD 3.35, with a turnover of HKD 123 million.
According to data from the Ministry of Agriculture and Rural Affairs, as of April 30, the average price of raw milk in China's main producing regions was RMB 3.02 per kilogram, representing a weekly increase of 0.3% but a year-on-year decrease of 2%. At the current raw milk price, the industry is generally operating at a cash loss. With subsequent factors such as rising meat prices stimulating culling, production capacity is expected to undergo accelerated reduction.
Huaxi Securities released a research report stating that, looking ahead at this year's milk prices, the bank believes the supply-side clearance will persist, while demand is expected to gradually recover. The milk price cycle is on the verge of entering a reversal phase. In the medium term, due to the difficulty of quickly replenishing supply-side capacity after reduction, a tight balance is likely to be maintained over the next 2-3 years.
As a leading enterprise in the industry, the company is positioned to benefit from this round of industry adjustment, with significant potential for elasticity release upon the cycle's reversal.
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