CH MODERN D (HKEX: 01117) has released an announcement indicating that the group expects to achieve a pre-tax profit of no less than RMB 43 million for the first half of 2026.

This represents a significant turnaround compared to the unaudited consolidated pre-tax loss of approximately RMB 972 million recorded for the six months ended June 30, 2025.

Primary Factors Behind the Profit Forecast

The anticipated pre-tax profit for the first half of 2026 is primarily attributed to several key factors.

Firstly, a decrease in the number of culled cows combined with an increase in their selling price has led to a year-on-year reduction in losses from changes in the fair value of dairy cattle.

Secondly, the gross profit margin on sales of raw milk has remained stable compared to the first half of 2025, while the absolute gross profit amount has also increased.

Finally, the continued implementation of effective cost reduction and efficiency enhancement strategies has resulted in a year-on-year decrease in feed costs, alongside effective control over other operational costs and expenses during the period.