Dairy stocks showed strong activity in the Hong Kong market. At the time of writing, YOURAN DAIRY (09858) rose 6.98% to HKD 4.6, while CH MODERN D (01117) climbed 4.35% to HKD 1.44. CHINA FEIHE (06186) gained 2.18% to HKD 4.21, and MENGNIU DAIRY (02319) increased 1.71% to HKD 14.88.

The rally follows recent policy developments. On December 13, China’s National Healthcare Security Administration announced plans to achieve nationwide "zero out-of-pocket" childbirth expenses under policy coverage by 2026. Additionally, on December 14, three government departments jointly issued a notice to strengthen coordination between commerce and finance for greater consumer stimulus, emphasizing policy synergy.

Kaiyuan Securities noted that 2026 could mark an inflection point for China’s dairy industry, with supply-demand dynamics improving. Current fundamentals suggest the sector is nearing its bottom, as declining liquid milk demand stabilizes and reduced cattle inventories drive supply adjustments. Milk price declines are slowing, with potential recovery by 2026, which may lift both volumes and prices. The firm recommends focusing on leading dairy farms and processors for investment opportunities.