Dairy stocks are leading the gains, with MENGNIU DAIRY (02319) up 4.22% at HK$18.29, CH MODERN D (01117) up 4.14% at HK$1.51, YOURAN DAIRY (09858) up 3.51% at HK$3.985, and CHINA FEIHE (06186) up 2.06% at HK$2.72.

On the news front, according to statistics from the Ministry of Agriculture and Rural Affairs, as of September 24, the average price of raw milk in major domestic producing areas stood at 3.09 yuan/kg, up 0.32% week-on-week and up 1.64% year-on-year. At the current raw milk price, the industry is broadly in a state of cash loss. With rising meat prices expected to stimulate culling, capacity reduction is projected to accelerate further, and subsequent capacity reduction will involve large-scale operations. Raw milk prices are expected to reach an upward turning point.

Everbright Securities noted that earlier capacity expansion in upstream dairy farming, combined with weak post-pandemic downstream demand, created a supply-demand gap that drove raw milk prices steadily downward. Since 2025, with continued cow herd reduction and stable demand, raw milk prices have been fluctuating at the bottom. Entering 2026, beef cattle prices have risen further, herd reduction has continued, and raw milk prices have shown signs of recovery. Moreover, during this round of reduction, leading farms have demonstrated stronger risk resistance while small and medium-sized farms have been phased out one after another, raising the industry's concentration level.