Shares of YOURAN DAIRY (HKEX: 09858) have risen more than 8%. At the time of writing, the stock is up 7.87%, trading at HK$3.29 with a turnover of HK$153 million.
Market Catalysts and Industry Analysis
Recent analysis points to a clear upward trend in the beef cattle cycle. As of June 5, the price for culled cows was RMB 22.75 per kilogram, a year-on-year increase of 17.9%, while beef prices stood at RMB 66.76 per kilogram, up 3.6% year-on-year, both holding steady month-on-month.
Data indicates that the Type 1 foot-and-mouth disease outbreak in South Africa has disrupted the flow of some raw milk. Additionally, some farms have reduced production following vaccination, contributing to a price increase for national bulk raw milk in the first week of May.
Sector Trends and Future Outlook
Growing consumer health awareness is creating expansion opportunities for low-temperature dairy products and deep-processed goods. With ongoing contraction in farm capacity, a gradual balance between raw milk supply and demand is anticipated by 2026, signaling a potential cyclical turning point.
Company-Specific Growth Drivers
Analysts highlight the company's successful diversified strategy, with its beef cattle business experiencing rapid growth, unlocking long-term expansion potential. While it remains deeply focused on its core dairy farming operations, the beef cattle segment has become a key growth driver.
Feed sales for beef cattle are projected to grow swiftly by 2026, and the company's self-operated beef cattle farming is expected to scale up rapidly. Leveraging its resource base of over 300,000 mature dairy cows, the company has ample breeding capacity. Furthermore, it utilizes shared equipment for both beef and dairy cattle feed, avoiding the need for significant additional capital expenditure.
This strategic positioning is expected to create a dual-drive business model powered by both dairy and beef cattle, effectively hedging against volatility in any single business cycle and providing robust long-term growth momentum.