Huaxi Securities has issued a research report adjusting its forecasts for Ausnutria. Looking ahead, factors such as market channel adjustments and the expansion of certain new, lower-margin businesses (e.g., goat cheese) are expected to temporarily suppress overall profitability. Consequently, the firm has revised down its profit projections for Ausnutria for 2025-2027. Revenue forecasts have been lowered from RMB 7.83 billion / 8.24 billion / 8.62 billion to RMB 7.49 billion / 7.90 billion / 8.26 billion for the respective years. Net profit attributable to shareholders has been adjusted down from RMB 300 million / 360 million / 430 million to RMB 240 million / 270 million / 320 million. Earnings per share (EPS) estimates have been reduced from RMB 0.17 / 0.20 / 0.24 to RMB 0.13 / 0.15 / 0.18. Based on the closing price of HKD 1.96 on February 9, 2026, the corresponding price-to-earnings (P/E) ratios are 14x, 12x, and 10x for 2025-2027. Huaxi Securities maintains an "Overweight" rating on the stock.
The main points from the report are as follows:
Domestic challenges in the infant formula milk powder sector persist, while overseas奶粉 sales are leading growth. Domestically, the infant formula industry showed rapid recovery in the first half of 2025 but weakened again in the second half, influenced by the fading lag effect of the 2024 newborn population dividend. According to NielsenIQ, while sales value for infant formula across all channels saw year-on-year growth from January to August 2025, it was flat for the period from January to November. Furthermore, company announcements indicate that in the second quarter of 2025, Ausnutria's奶粉 business experienced a short-term decrease in shipments due to an internal code system upgrade and proactive channel inventory adjustments. It is anticipated that both the domestic goat milk and cow milk formula businesses will see a decline for the full year 2025, with profits falling short of expectations. However, improvement is expected in 2026 as domestic channels operate with a lighter load.
Overseas, according to interim reports, the Kabrita brand achieved a 65.7% year-on-year revenue increase in international markets during the first half of 2025. This was primarily driven by strategic breakthroughs in three core markets: the Middle East, North America, and the Commonwealth of Independent States. Significant progress was made in each market regarding channel expansion, product innovation, and brand building. The company remains confident in its market position and future development, planning to continue expanding in the Middle East and further develop offline channels such as Walmart in the US, thereby outlining a clear growth blueprint and building diversified growth engines.
The infant formula business reported successes on both fronts. The cow milk formula brand Hyproca has been ranked number one in national sales of nutritional milk powder for three consecutive years by iiMedia Research, receiving dual certifications as an "Innovator" and "Sales Leader." According to the "2025 Comprehensive Nutritional Milk Powder White Paper," the brand holds a significant mindshare among consumers and channels for "comprehensive nutrition" and achieved strong counter-trend growth in key channels during the first half of 2025 amid industry adjustments. The goat milk formula brand Kabrita, leveraging dual-IP innovative marketing and the industry's first "Feeding Trends Report," was awarded the "Annual IP Innovative Brand of 2025" by Xiaohongshu, effectively leading the breakout of the goat milk category.
On February 5th, the National Health Commission approved the inclusion of Bifidobacterium longum subsp. infantis YLGB-1496 in the list of bacterial strains permitted for use in infant food. This is the second nationally approved probiotic strain specifically for infants secured by Ausnutria's subsidiary, Genuine Biotech, following the MP108 strain approved in 2021, making it a "dual champion" with two nationally recognized strains. This approval signifies authoritative endorsement of the company's core technological capabilities and represents an important milestone in the collaborative efforts between Ausnutria and Yili to promote the industrialization of "Chinese probiotics."
Guided by the strategies of "simultaneously developing goat and cow milk products" and "family nutrition and health," the company has established a nutritional product system covering all life stages. Facing industry challenges, Ausnutria will continue to focus on consumers, stabilize its core business, and expand its growth trajectory, advancing through scientific research and innovation towards its vision of becoming "the world's most trusted formula milk and nutritional health company."
Risk warnings include the ongoing risk of declining newborn population, food safety issues, volatility in raw milk prices, and industry competition.