Shares of leading dairy farming companies are advancing in Hong Kong trading, with Youran Dairy (09858) climbing 3.3% to HK$4.22 and China Modern Dairy (01117) rising 2.58% to HK$1.59 as of the latest update.

Market data shows that raw milk prices are showing signs of stabilization, with the average price of fresh milk in major producing provinces reaching 3.06 yuan per kilogram in the fourth week of August, marking a 1.3% year-on-year increase and remaining flat month-on-month. On the supply side, as of the end of June 2026, the national dairy cow inventory stood at approximately 5.772 million heads, down about 12.5% from the peak seen in 2023.

A research report from CLSA indicates that upstream dairy farmers typically enjoy greater profit leverage during an upward cycle in raw milk prices. Assuming all other factors remain constant, a 10-cent increase in raw milk prices per kilogram would generate approximately 320 million yuan in additional profits for China Modern Dairy (excluding the consolidation of China Shengmu Organic Milk).