According to a research report released by Everbright Securities Company Limited (ASX: 601788) via CICC Finance APP, early-stage expansion in upstream dairy farming combined with post-pandemic weak downstream demand created a supply-demand gap that pushed raw milk prices into a sustained decline. Since 2025, with continued cattle culling and stable demand, raw milk prices have been oscillating at the bottom. Entering 2026, beef cattle prices have risen further, herd reduction continues, and raw milk prices are showing signs of recovery. Moreover, during this round of destocking, large-scale farms have demonstrated stronger risk resistance while small and medium-sized farms have been gradually phased out, driving industry concentration higher. Youran Dairy (HK: 09858) and CH Modern D (HK: 01117), as leading dairy farms backed by top dairy enterprises such as Yili and Mengniu, have been expanding their herds against the trend in recent years, and are expected to strengthen their competitive advantages as milk prices stabilize and enter an upward cycle. Combined with improving expectations for biological asset impairment, profits could see greater elasticity.