CITIC Securities: It's the right time to eliminate overcapacity, and the turning point for the animal husbandry sector may appear in 2025H2

On December 6th, Jin10 Data reported that CITIC Securities pointed out that in recent years, the increase in the supply of raw milk and the weak downstream demand for dairy products have led to a continuous decline in milk prices. By 2024H1, more than 80% of ranches will be in a loss. From 2021H2 to now, the price of raw milk has been falling for more than 3 years, and leading ranch companies have been in a financial dilemma of loss or small profit for 2.5 consecutive years. In 2024, the capacity of the ranch industry began to be digested. With the continuous digestion of dairy cows and the weak recovery of downstream demand for dairy products, we expect the turning point of supply and demand in the ranch industry to occur in 2025H2. The current valuation of the zone is at its historical low and is in the left investment stage.