On August 27, Mengniu Dairy disclosed its interim results for 2025, reporting revenue of 41.567 billion yuan and net profit attributable to shareholders of 2.046 billion yuan for the first half of the year.

The company achieved robust growth across key segments during the period. Fresh milk operations posted 22.3% growth with market share expanding by 2.4 percentage points. Ice cream revenue reached 3.879 billion yuan, up 15% year-over-year, with the "Aice" brand maintaining its leading position in Indonesia's market share. Cheese operations generated revenue of 2.374 billion yuan, representing 12.3% growth while preserving its top market position.

Over recent years, Mengniu has been accelerating strategic upgrades and operational improvements, with continuous enhancement in competitiveness, operational efficiency, and profitability. The company is positioned to enter a harvest period once raw milk prices reach an inflection point.

**Interim Results Highlights: Double-Digit Fresh Milk Growth and Continued Margin Improvement**

As the dairy industry undergoes deep adjustments, industry leader Mengniu Dairy delivered several notable highlights in its interim results.

The company's core liquid milk segment generated revenue of 32.192 billion yuan during the first half. Despite overall demand weakness affecting the broader industry's liquid milk operations, Mengniu leveraged its competitive advantages to achieve rapid growth in specific categories.

Fresh milk operations delivered exceptional 22.3% growth, significantly outpacing the industry average and gaining 2.4 percentage points in market share. The company secured the leading market share position in offline channels including hypermarkets and membership stores during the period.

Fresh milk remains in a rapid expansion phase, driven by rising health consciousness among consumers, channel and market penetration into lower-tier cities, and supportive policies. The proportion of low-temperature fresh milk within the liquid milk category continues to increase. For dairy companies, fresh milk operations have become the next key battleground, as high-margin fresh milk business not only drives product portfolio upgrades but also strengthens brand positioning.

Mengniu's "Daily Fresh" brand has established itself as a premium fresh milk benchmark, achieving rapid growth through product innovation and channel expansion. According to industry data, Daily Fresh ranks first across three key metrics: social media composite index, premium fresh milk sales, and consumer taste preference, maintaining its position as the leading premium fresh milk brand.

In other categories, ice cream operations achieved revenue of 3.879 billion yuan, up 15% year-over-year.

The domestic ice cream market has faced pressure since 2025 began. According to terminal POS data, offline single-store sales performance for ice cream products in the first half of 2025 weakened notably compared to the same period in 2024. Despite this challenging environment, Mengniu's ice cream division achieved counter-cyclical growth through product innovation, channel transformation, breakthrough marketing, and overseas expansion, with sales volume exceeding expectations.

Notably, the "Aice" brand maintained its leading position in Indonesia's market share during the first half, ranked second in the Philippines' ready-to-eat ice cream market, and advanced to second place in Vietnam's market share. International markets have provided new growth opportunities for Mengniu's ice cream operations.

Additionally, cheese operations generated revenue of 2.374 billion yuan, up 12.3%, while other dairy products achieved revenue of 1.447 billion yuan, growing 12.4%.

Cheese represents another segment where Mengniu holds competitive advantages. The company established its cheese division in 2018, partnered with Arla Foods in 2019 to launch Arla cheese products, and subsequently acquired Milkground, creating synergies to enhance market share.

According to Worldpanel consumer index data, Milkground maintained over 38% market share in China's packaged cheese brand sales during the first half of 2025, with cheese sticks maintaining the leading industry position. Euromonitor statistics show Milkground continued to rank first in China's retail cheese market brand share rankings for the first half of 2025.

For Mengniu, fresh milk, ice cream, and cheese operations offer higher value-added attributes compared to liquid milk, providing new growth drivers while promoting product portfolio upgrades and driving continued profitability improvements.

During the first half of this year, Mengniu Dairy's overall gross margin reached 41.75%, up 1.49 percentage points year-over-year and significantly higher compared to previous years. Securities analysts note that as a leading dairy company, Mengniu demonstrates steady operations, structural optimization, and enhanced profitability, making its long-term development prospects promising.

**Industry Inflection Point Approaching as Mengniu Enters Harvest Phase**

The current raw milk cycle began in October 2021, with prices declining continuously for three years. Under conditions of raw milk oversupply and persistent price declines, dairy industry chain companies face significant pressure.

According to research data, China's dairy cow production declined 2.8% year-over-year in 2024, with large-scale farms reducing dairy cow inventory by 200,000-300,000 head. Inventory levels continued declining in 2025.

With farm losses and reduced financing, 2025 is expected to see decreased raw milk supply. As farms exit the market and consumption recovers, raw milk prices are anticipated to reach an inflection point.

For industry leaders, once the negative impacts from low raw milk prices and weak demand are eliminated, the core liquid milk segment will experience performance recovery.

Over recent years, Mengniu has accelerated strategic upgrades and operational efficiency improvements. This is reflected in operational metrics: during the first half of this year, operating profit increased 13.4% year-over-year to 3.54 billion yuan, with operating margin improving 1.5 percentage points to 8.5%, and operating cash flow surging 46.2%. Additionally, inventory turnover days decreased by 4.3 days, maintaining healthy inventory levels.

China's dairy industry is transitioning from "scale expansion" to "quality competition," creating significant opportunities for leading companies. Top-tier enterprises possess unique brand and channel advantages, positioning them to benefit maximally from evolving consumer trends.

From Mengniu Dairy's perspective, the company has accelerated product and channel innovation in recent years, establishing growth momentum in segments beyond ambient liquid milk.

During the first half of this year, the company launched 72 new ambient products and 20 new ice cream products, covering health-focused, premium, and personalized segments. On the channel front, the company is accelerating construction of a "comprehensive channel ecosystem." Management disclosed: "We are strengthening our online distributors and offline dealers, accelerating expansion in lower-tier markets, focusing on breakthrough in weaker regions, while actively deepening cooperation with warehouse membership supermarkets, snack retailers, and emerging channels including instant retail." The "Guanyiru Early 8-ton Bucket" became a popular "sold-out king" at Sam's Club during the first half, while Telunsu's 200ml Master Limited Edition achieved monthly sales exceeding 100 million yuan. The company's innovation capabilities and new product promotion abilities were fully demonstrated.

Looking ahead, if demand conditions improve and raw milk prices reach an inflection point, Mengniu will enter a true harvest period.