Summary of Key Performance
New Dairy’s performance in the first half of 2026 was outstanding: both revenue and profit increased (with profit growth outpacing revenue growth significantly), and the company generously distributed dividends to shareholders (with a dividend increase of over 57%). Against the industry trend of declining demand for ambient-temperature milk and rising demand for low-temperature milk, New Dairy has leveraged its “Fresh Cube Strategy” to strengthen its position in the low-temperature milk market through product development, supply chain optimization, technology advancement, digital transformation, and international expansion. This approach has not only preserved its core strengths in the low-temperature milk segment but also opened up new growth opportunities, earning recognition from the industry and consumers (such as receiving the first Deloitte White Gold Award).
Detailed Analysis
1. Increased Performance and Higher Dividends: A Boost for Shareholders
New Dairy achieved significant profits in the first half of the year, with revenue rising by 5.2% to over 5.8 billion yuan, and net profit attributable to shareholders increasing by 17.24% to 465 million yuan (a much faster profit growth rate than revenue growth, indicating higher efficiency in generating profits). Even more noteworthy is the dividend distribution: the company paid out a total of 387 million yuan in cash dividends, a 57% increase from the previous year. This demonstrates the company’s commitment to shareholders and sends a signal of stable and confident growth.
2. The Demand for Low-Temperature Milk Is Strong: New Dairy’s Focus on “Freshness”
The dairy industry faced challenges in the first half of the year, with declining sales of ambient-temperature milk and increasing demand for low-temperature fresh milk and yogurt. New Dairy capitalized on this trend by making “freshness” its core competitive advantage:
- Product Development: The company adopted a “Three Freshes” strategy, focusing on low-temperature fresh milk and specialty yogurts. It launched products like Norwegian Red Bull-style milk with rare ingredients and exceptional freshness, as well as “Live Moisture” yogurt that promotes gut health and “24-Hour Fresh Protection Strawberry Milk” suitable for children. These new products contributed significantly to overall revenue growth.
- Supply Chain: New Dairy implemented an “Eight Freshes” system, ensuring that every aspect of the supply chain—from milk sourcing to delivery—is kept fresh. The company even organized community events to showcase the freshness of its products.
- Distribution Channels: It directly targeted consumers through direct-to-consumer (DTC) sales, launching initiatives like “Fresh Milk into Communities” in Chengdu and Hangzhou, with promises of timely delivery and home delivery. This approach led to increased repeat purchases from existing customers and new subscriptions. The company also expanded into new retail channels, achieving faster growth than the industry average.
3. Technology as a Competitive Edge
New Dairy considers biotechnology a key driver for innovation:
- It owns a library of 2,300 strains of lactic acid bacteria, validating the benefits of various strains (such as those that can regulate mood).
- The company focused on precision nutrition, using probiotics in products like “Live Moisture Happy Bar” yogurt and “24-Hour Fresh Milk” for children’s health. These innovations have made its products more distinctive and earned it several awards from the China Dairy Association for technological advancements (First Prize and Second Prize).
- Brand marketing also incorporated technology, such as the “Fresh Life Festival” campaign targeting families, and partnerships with fitness platforms for weight management and gut health initiatives.
4. Digitalization and Compliance for Efficient Management
New Dairy uses digital tools to improve operational efficiency:
- It transformed data from a mere recording tool into a valuable decision-making tool, using analytics to optimize sales and the supply chain. It also adopted artificial intelligence to enhance production and delivery processes.
- In terms of compliance, the company established eight risk management teams (covering food safety, finance, information security, etc.) to mitigate potential risks. These efforts have earned it the “China Excellent Management Company” award for seven consecutive years, and it became the first dairy company to receive the “White Gold Award,” recognizing its advanced management practices.
5. International Expansion: From Domestic to Global Markets
New Dairy is looking to expand beyond China:
- Capital Expansion: The company applied for an H-share listing in April, aiming to establish an “A+H” dual-platform (mainland and Hong Kong stock market) to facilitate financing and global business expansion.
- Product Distribution: Its products, including those from Asahi Weipin, are available in Hong Kong’s Wellcome supermarkets, and its蝶泉 milk is popular in Southeast Asia. The company has also registered trademarks in seven countries.
- Collaborative Expansion: It partnered with Hong Kong’s “Cross Brand” milk company to enter the Hong Kong and Macau markets and collaborated with Swiss company AHWATIAN to develop low-temperature dairy beverages, leveraging external brands and resources to expand its presence internationally.
Overall, New Dairy has successfully differentiated itself in a challenging industry environment by focusing on “freshness,” utilizing technology and digitalization to improve efficiency. It has also laid the foundation for future growth through dividend distribution and international expansion, adopting a strategy of steady growth and long-term planning. (Note: This analysis does not constitute investment advice.)