In-depth Analysis of Investment Opportunities in Dairy Concept Stocks

Recently, the strong performance of the dairy sector is mainly driven by strong policy support. On December 14, the Ministry of Commerce, the People’s Bank of China, and the State Financial Supervision and Administration jointly issued the “Notice on Strengthening Collaboration Between Commerce and Finance to Boost Consumption with Greater Efforts”, which injected a shot in the arm into the consumer sector [1]. The core of the policy includes:

• Increased financial support
  : Financial institutions will alleviate the capital pressure of dairy enterprises in R&D innovation and capacity expansion through credit support and supply chain finance [1]
• Consumption quality upgrading
  : The “consumption quality upgrading” encouraged by the policy is highly aligned with the current transformation direction of the dairy industry towards functional and high-quality products
• Expansion of sinking markets
  : Collaboration between commerce and finance will further open up urban and rural consumption channels, helping dairy products expand in sinking markets

At the same time, the “Qiushi” magazine published an important article by senior officials titled “Expanding Domestic Demand is a Strategic Move”, which clearly stated that “we should accelerate the filling of domestic demand, especially consumption gaps, so that domestic demand becomes the main driver and stable anchor for economic growth” [2], providing policy guarantees for the long-term development of the consumer sector.

Dairy consumption is undergoing a structural transformation from basic nutrition supplementation to precise functional satisfaction. Data shows:

• Functional products are favored
  : Functional products such as lactoferrin to enhance immunity, β-casein to help calcium absorption, and whey protein to regulate metabolism are备受关注
• Driven by young consumer groups
  : As the main consumer force, Generation Z has a penetration rate of over 90% for functional dairy products [1]
• Rapid growth of new categories
  : Sugar-free tea, functional drinks, and Chinese-style health water are growing rapidly, forming a synergistic effect with dairy products

From the perspective of stock price performance, Huanlejia (300997.SZ) rose 9.55% today to 30.39 yuan, with a market capitalization reaching 12.7 billion USD [0]. The cumulative increase over the past year reached 77.30%, and the 3-year increase even reached 122.47% [0], showing a strong upward momentum.

• Valuation level
  : P/E ratio is 168.83 times, P/B ratio is 12.50 times, indicating high valuation [0]
• Profitability
  : ROE is 6.83%, net profit margin is 4.76%, operating interest rate is 7.02% [0]
• Financial security
  : Current ratio is 1.35, quick ratio is 1.06, short-term solvency is good [0]

• Kedi Dairy
  (002770.SZ): Stock price is only 0.60 yuan, P/E ratio is 7.23 times, but ROE is as high as 29.01%, net profit margin is 11.68%, showing good profitability [0]
• Obvious industry differentiation
  : The dairy sector is highly differentiated, with some companies having relatively stable fundamentals, while individual companies like ST Yaxing still face operational difficulties

The “China Food and Nutrition Development Outline (2025-2030)” issued by 3 departments including the Ministry of Agriculture and Rural Affairs sets a quantitative target - by 2030, the per capita annual consumption of milk will reach 47 kg, and at the same time, it clearly states that it is necessary to cultivate the low-temperature dairy product market and promote the consumption of cheese and other dry dairy products [1]. This provides a clear growth target for the industry.

• Milk coffee and milk tea drive raw material demand
  : Milk coffee and milk tea based on raw milk have become winter consumption hotspots, driving rapid growth in demand for raw materials such as cream and butter
• Explosive growth of cheese consumption
  : Cheese consumption has increased by 120% in the past 5 years, and products such as mozzarella cheese shreds, cheese sticks, and cheese sauce have become new choices for family consumption

1. Valuation risk
   : Huanlejia’s current P/E ratio is as high as 168.83 times, far exceeding the industry average, and there is a risk of valuation correction [0]
2. Performance fluctuation
   : The latest quarterly data shows that Huanlejia’s 2025 Q3 revenue was 294 million USD, EPS was -0.02 USD, resulting in a quarterly loss [0]
3. Increased industry competition
   : With the release of policy dividends, industry competition may further intensify, affecting corporate profitability

1. Continuous policy dividends
   : The effect of the consumption support policy jointly issued by the three departments will gradually appear, and dairy products as an important part of consumer goods will directly benefit
2. Consumption upgrading trend
   : The growth in demand for functional dairy products and high-end dairy products will drive industry structure optimization and profit margin improvement
3. Technology innovation-driven
   : Through technological innovation and product upgrading, dairy enterprises are expected to open up new growth space

Given the current positive policy environment and high market sentiment, dairy concept stocks still have performance opportunities in the short term. However, attention should be paid to the high valuation risk of leading stocks like Huanlejia, and it is recommended to focus on trading opportunities catalyzed by policies.

From the perspective of 3-5 years, the dairy industry has long-term investment value driven by both policy support and consumption upgrading. It is recommended to focus on:

• Enterprises with strong product innovation capabilities
• Companies with布局 in the functional dairy product field
• Leading enterprises with perfect channel construction and outstanding brand strength

Investors need to be alert to the market adjustment risk after the release of policy dividends, as well as the valuation regression pressure caused by the mismatch between corporate fundamentals and stock price increases.

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[0] Gilin API Data
[1] Sina Finance - “Three Departments Jointly ‘Inject Blood’ into Consumption, Dairy Sector Takes Advantage to ‘Score’, Huanlejia Leads the Rise!” (https://finance.sina.com.cn/tech/roll/2025-12-15/doc-inhawiai1994192.shtml)
[2] East Money - “Great Consumption Benefits Frequent! Institution: Food and Beverage Welcomes the Starting Point of a Big Year in 2026” (https://finance.eastmoney.com/a/202512163592684644.html)