Lyon released a report stating that the Ministry of Agriculture and six departments jointly issued the "Notice on Promoting the Stable Development of Beef and Dairy Cattle Production." The bank believes that the "Notice" aims to support upstream pastures through the industry's downturn, mainly due to the decrease in raw milk prices since 2022, and about 80% of upstream pastures are currently experiencing net losses.

The bank emphasizes that the "Notice" attempts to stimulate dairy product consumption, not only boosting sales of downstream enterprises in the short term, but also effectively improving the current imbalance between the supply and demand of raw milk.

In addition, since the specific details of the current consumer vouchers are unclear, the bank finds it difficult to determine the impact of relevant policies on the sales of downstream enterprises. However, it believes it is a positive catalyst for the dairy industry stocks and a bullish factor that has recently boosted market sentiment. The bank has given Mengniu (02319.HK), Inner Mongolia Yili Industrial Group (600887.SH), and Ch Modern D (01117.HK) a 'outperform the market' rating. The bank is bullish on Mengniu's continued growth in the second half of the year due to its dividend distribution and share buybacks, as well as its reasonable valuation, with a target price of 19.4 yuan. The bank has set a target price of 1 yuan for Ch Modern D.