Inner Mongolia Mengniu Dairy (Group) Co., Ltd. (Mengniu) saw a decline in both operating income and net profit attributable to equity shareholders in the first half of this year. This marks the second consecutive year that Mengniu has experienced a decrease in revenue and net profit.
According to Mengniu’s “Interim Performance Report for the Six Months Ended June 30, 2025,” the company recorded operating income of 41.57 billion yuan in the first half of the year, a 6.9% year-on-year decrease. The net profit attributable to equity shareholders was 2.0455 billion yuan, down 16.4% compared to the same period last year.
Comparing the revenue in the first half of 2025 to that of the same period in 2023, which was 51.12 billion yuan, there was a decrease of nearly 10 billion yuan, marking a three-year low for the company.
The mid-year performance report attributed these results to the decrease in raw milk prices in the first half of 2025, coupled with temporary oversupply and sluggish demand recovery. The report highlighted the ongoing challenges of supply-demand imbalance in the dairy industry due to the dual challenges of consumer environment and industry cycle.
Shenzhen Manager Media Co., Ltd., publisher of “Manager Magazine,” stated on October 5th that Mengniu’s decline in revenue and profit reveals the deep-seated challenges the dairy giant faces during the industry’s low cycle phase.
The continuous decline in raw milk prices has had a severe impact on Mengniu’s cooperative ranches. Since reaching a temporary high point in September 2021, the price of fresh milk has dropped by nearly 30%. Additionally, the modern farming under Mengniu experienced a attributable net loss of 913.5 million yuan in the first half of this year due to the elimination of low-yield cows and the decrease in raw milk selling prices, becoming a key factor in the 16.4% decline in profits.
Starting from the second half of 2024, prices of feed materials such as corn and soybean meal fluctuated upward, raising farm breeding costs and affecting dairy companies, putting pressure on Mengniu’s profits.
The unfavorable economic environment in China has also added pressure to Mengniu’s operations. Weak economic recovery has dampened the demand for high-end ambient temperature milk products with higher unit prices, and the decline in dairy product industry sales by 3.1% in 2024 continues.
“Manager Magazine” believes that Mengniu faces a challenging cycle of “price decline – no reduction in production capacity – expanding losses” in the upstream sector, which is difficult to break in the short term. The double pressure in the upstream sector has exposed deep-rooted flaws in Mengniu’s supply chain management, inadequate risk control in core milk source enterprises, and the lack of an effective cyclical hedging mechanism, leading to direct transmission of upstream fluctuations to the listed company’s profit statement, keeping it passive throughout the industry cycle.
Public records show that Inner Mongolia Mengniu Dairy (Group) Co., Ltd. was founded in August 1999 and is headquartered in Hohhot, Inner Mongolia. As a leading company in agricultural industrialization, its products include liquid milk, ice cream, milk powder, cheese, and more.