Bright Dairy's 2025 Annual Report Analysis: Net profit attributable to parent company lost 149 million yuan; operating cash flow down 51.21% year-over-year

Core Revenue Performance Interpretation

Operating Revenue: Down Slightly by 1.58%, with Clear Structural Differences

In 2025, the company achieved operating revenue of 23.895 billion yuan, representing a year-on-year decrease of 1.58%. By business segment, liquid milk revenue was 13.252 billion yuan, a slight decline; other dairy products revenue was 8.520 billion yuan, an increase; and the animal husbandry segment revenue was 0.917 billion yuan, a decline. By region, revenue from the China market was 16.245 billion yuan, revenue from the New Zealand market was 7.650 billion yuan, and the combined total was basically flat compared with the previous year.

Net Profit Attributable to Shareholders of the Parent: Turn from Profit to Loss, Loss of 149 million Yuan

In 2025, net profit attributable to shareholders of listed companies was -149 million yuan, down 120.67% year over year, marking the first annual loss. The main driver was the underperformance of the New Zealand subsidiary Newread, whose loss in the period was 407 million yuan, having a significant impact on the company’s consolidated net profit.

Non-recurring Profit: Loss Narrows to 58 Million Yuan

After deducting non-recurring gains and losses, net profit attributable to shareholders of listed companies was -58 million yuan, down 133.83% year over year. The magnitude of the loss narrowed compared with the parent-attributable net profit. The main non-recurring gains and losses include losses from disposal of non-current assets of 231 million yuan, government subsidies of 116 million yuan, and others.

Earnings per Share: Turn from Positive to Negative

Basic earnings per share were -0.11 yuan per share, down 121.15% year over year; non-recurring earnings per share were -0.04 yuan per share, down 133.33% year over year, with both shifting from positive earnings in the prior year to negative earnings.

Expense Side: Multiple Expenses Decline, with Financial Expenses Seeing a Significant Drop

Total Expenses: Slight Year-on-Year Decrease

In 2025, the company’s total expenses (sales + management + R&D + finance) totaled 4.007 billion yuan, down 2.8% year over year, with initial results in expense control.

Selling Expenses: Down 3.91%, with Reduced Advertising Spend

Selling expenses were 2.856 billion yuan, down 3.91% year over year. Of this, advertising expenses were 539 million yuan, down sharply by 20.07% year over year; marketing market expenses were 679 million yuan, up 20.37% year over year. The company adjusted its marketing resource allocation, reduced brand advertising placements, and increased terminal promotional efforts.

Administrative Expenses: Down 8.50%, Streamlining Administrative Spending

Administrative expenses were 810 million yuan, down 8.50% year over year, mainly due to decreases in expenses such as consulting fees and staff compensation. The company lowered management costs by streamlining management processes and optimizing staffing structure.

Financial Expenses: Down 25.31%, with Reduced Interest Expenses

Financial expenses were 184 million yuan, down 25.31% year over year, mainly due to lower interest expense on borrowings. The company optimized its debt structure to reduce financing costs. Interest expense in this period was 141 million yuan, down 2.72 billion yuan year over year.

R&D Expenses: Basically Flat, with Stable Investment

R&D expenses were 137 million yuan, up 0.38% year over year, and the scale of investment remained stable. R&D expenses mainly went toward staff compensation, R&D materials, and others. The company continued to carry out research and development of dairy product formulas and process technologies.

R&D Personnel Overview: Team Size Stable, with Over 70% Holding Advanced Degrees

As of the end of 2025, the company had 144 R&D personnel, accounting for 1.18% of the company’s total headcount. In terms of educational background, there were 25 PhD holders, 75 master’s degree holders, and 44 bachelor’s degree or below; the proportion of employees with bachelor’s degree or above was 70.14%. In terms of age structure, the group is mainly 30–50 years old, accounting for 68.06%. The R&D team is generally younger and has a high level of education with strong professional backgrounds.

Cash Flow: Operating Cash Flow Halved, Investment Cash Flow Turns Positive

Overall Cash Flow: Net Amount Shifts from Positive to Negative

In 2025, the net increase in cash and cash equivalents was -108 million yuan, compared with -297 million yuan in the same period last year, indicating that cash-flow pressure continues.

Cash Flow from Operating Activities: Down 51.21%, with Slower Receipts from Sales

Net cash flow generated from operating activities was 612 million yuan, down 51.21% year over year. This was mainly because cash received from selling goods decreased to 26.986 billion yuan, while cash paid for purchasing goods increased to 20.977 billion yuan. Slower collections from sales combined with higher procurement expenditures led to a significant contraction in operating cash flow.

Cash Flow from Investing Activities: Turns from Negative to Positive, with Receipts from Asset Disposals

Net cash flow generated from investing activities was 198 million yuan, compared with -229 million yuan in the same period last year, achieving a shift from negative to positive. This was mainly due to receiving 697 million yuan of cash from recovering long-term assets such as disposal of fixed assets and intangible assets, while expenditure for constructing and purchasing long-term assets was 496 million yuan. Receipts from asset disposals became the main source of cash flow from investing activities.

Cash Flow from Financing Activities: Outflows Narrow, with Reduced Repayments

Net cash flow from financing activities was -916 million yuan, compared with -1.319 billion yuan in the same period last year, and the scale of cash outflows narrowed. This was mainly because cash paid for repaying debts decreased to 2.786 billion yuan, and dividend distribution payments were 221 million yuan. The company adjusted its financing schedule and reduced the scale of debt repayments.

Risks Faced by the Company

2. Industry Competition Risk: Competition in the dairy products industry is fierce. Market share is concentrated among leading companies. The company needs to continuously optimize its product structure and strengthen brand influence to respond to competition.
3. Risk of Raw Material Price Fluctuations: Prices of raw materials such as fresh milk and feed are affected by factors including market supply and demand and weather. Price fluctuations directly impact production costs. The company needs to hedge risks through methods such as hedging and large-scale procurement.
4. Overseas Business Risk: The New Zealand subsidiary Newread faces risks including local regulatory policies and exchange rate fluctuations. In 2025, operating losses have already occurred. In the future, stable operation of overseas business is crucial to the company’s performance.
5. Food Safety Risk: Food safety requirements for the dairy products industry are high. If a food safety incident occurs, it will cause a major impact on the company’s brand image and operating performance. The company needs to continuously strengthen quality control across the entire process.

Executive Compensation: Declines in Line with Performance

In 2025, the total compensation paid to the company’s directors and senior management was 8.393 million yuan, down 16.83% year over year, moving in tandem with the company’s performance decline. Among them, the Chairman, Huang Liming, reported pre-tax compensation of 1.3028 million yuan during the reporting period; the General Manager, Ben Min, reported pre-tax compensation of 1.3028 million yuan; the Vice General Manager, Li Xiukun, reported pre-tax compensation of 538.3 thousand yuan, and Zhu Yi reported pre-tax compensation of 875 thousand yuan; the Chief Financial Officer, Zhao Jianfu, reported pre-tax compensation of 1.0352 million yuan. Compensation levels adjust in line with the company’s performance.

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