格隆汇September 27th | Lyon published a report pointing out 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 ranches through the industry's downturn period, mainly due to the decrease in raw milk prices since 2022, and currently about 80% of upstream ranches are 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 supply and demand of raw milk. In addition, as the specific details of the current consumer vouchers are unclear, the bank finds it difficult to determine the impact of the relevant policies on the sales of downstream enterprises, but believes it is a positive catalyst for dairy industry stocks and a bullish factor that has boosted market sentiment recently. The bank rates Yili Industrial Group, Inner Mongolia Yili Industrial Group, and CH Modern D as "outperform the market." The bank is optimistic about Yili's continued growth in the second half of the year due to its dividend distribution and ongoing share repurchases, as well as its relatively low valuation, with a target price of HK$19.4. The bank also set a target price of HK$1 for CH Modern D.