CH MODERN D (01117) shares climbed more than 9% in Hong Kong trading, continuing a strong rally that has pushed cumulative gains to over 90% since late June. As of the latest update, the stock was up 8.52% at HK$1.72, with turnover reaching HK$104 million.

The catalyst comes from the announcement that CH MODERN D and CHINA SHENGMU (01432) have declared the closure of the mandatory unconditional cash offer initiated by Modern Dairy. Together with its concert parties, CH MODERN D now holds approximately 7 billion shares, representing about 83.52% of the issued share capital of CHINA SHENGMU. Following the acquisition, the combined dairy cattle herd of CH MODERN D and CHINA SHENGMU has reached 604,000 head, accounting for roughly 10.4% of the national total herd.

Adding to the positive sentiment, CH MODERN D recently issued a profit alert, forecasting a pre-tax profit of no less than RMB 43 million for the first half of the year, marking a turnaround from a loss in the same period last year. Analysts at Huaxi Securities noted that the first-half profit alert boosts confidence in a significant improvement in full-year profitability, with the company expected to transition from balance sheet financial improvements to solid operational profit gains. The brokerage also highlighted that the dairy farm sector's return to profitability is an early signal that the milk price cycle may be entering a reversal phase.