Mengniu releases 2025 financial report: Evolving resilience, preparing for growth

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On March 25, Mengniu Dairy (2319.HK) released its 2025 annual performance report. Facing multiple challenges such as insufficient domestic demand growth momentum and significant structural and far-reaching adjustments in the industry, Mengniu pushed forward under pressure, firmly advancing the “One Body, Two Wings” strategy. Its business structure continued to optimize, resilience was significantly strengthened, and it achieved full-year revenue of 82.24 billion yuan and operating profit of 6.56 billion yuan.

The announcement shows that Mengniu enhanced quality and efficiency through a series of refined management initiatives. The company’s gross profit margin reached 39.9%, cash flow from operating activities was 8.75 billion yuan, and free cash flow was 6.3 billion yuan. All three indicators hit the highest levels in history. Analysts said the company’s fundamentals have continued to improve, its core competitiveness has been comprehensively enhanced, providing solid performance support for seizing opportunities during the cyclical recovery.

Adhering to strategic resolve and promoting coordinated development across “One Body, Two Wings”

In 2025, Mengniu maintained strategic resolve and fully advanced “One Body, Two Wings,” while its category structure continued to optimize. In “One Body,” ambient and chilled products rebounded steadily, helping solidify the liquid milk core business. Fresh milk, cheese, milk powder, and domestic ice cream segments all achieved double-digit growth. On the “Two Wings” side, innovative businesses made breakthrough progress in areas such as deep processing and functional nutrition, and international operations delivered solid performance in both the Southeast Asian market and the Australia-New Zealand bases.

Mengniu’s ambient segment underwent a systematic restructuring focused on product innovation, marketing and communications, and deep channel cultivation. It rolled out “Soft Milk,” as well as functional milks such as prebiotics and vitamins, continuously expanding the population that drinks milk and opening up incremental markets, fully reinforcing the liquid milk core business. On the 20th anniversary of flagship brand “Turelusu,” Mengniu launched “Shajin Taohai” high-end organic milk, further strengthening its leadership position in the high-end market. In the chilled segment, it actively seized the trend of increasingly diverse consumption scenarios. Leveraging ongoing breakthroughs in product innovation and channel layout, its profitability kept improving, and it maintained the #1 position in market share for 21 consecutive years.

Mengniu’s fresh milk segment achieved double-digit growth, and its market share further increased. In particular, “Daily Fresh” continued to strengthen its core product 4.0, and it entered high-end fresh milk sub-segments with new products such as zero-lactose double proteins and A2 β-casein milk, achieving high double-digit growth. In domestic ice cream, business focused on the dual-brand strategy of “Change-Plus + Green Mood,” continuously optimizing product layout and scenario fit, and also delivered double-digit growth while sustaining improving profitability. For the milk powder segment, it focused on functional sub-segments, strengthening product performance through scientific research and innovation. It grew by nearly double digits for the full year, with growth accelerating to high double digits in the second half.

Worth noting is that Mengniu’s cheese segment grew by more than 20% for the full year, demonstrating strong growth momentum. By further strengthening synergy with Miao Ke Lan Duo, Mengniu deepened comprehensive empowerment across its supply chain, market, and channel resources, helping Miao Ke Lan Duo establish an absolute leading position in the industry.

On the basis of ongoing structural optimization of its core business, Mengniu strategically laid out innovative businesses and overseas platforms, actively building a “second growth curve” and accelerating its march toward “Healthy Cattle” and “World Cattle.”

In the deep processing sector, the pace of industrialization accelerated. Products such as lactoferrin, micellar casein, and demineralized whey powder D90 successfully met targets. Mascarpone cheese and original mozzarella cheese were successively launched, breaking through technical bottlenecks and reducing reliance on imports. Mengniu’s professional dairy products successfully won the trust of leading tea, baking, and catering chain brands, and its market penetration rate increased significantly. The sports nutrition brand “Maisheng” completed nearly 100 million yuan of Series A financing, receiving recognition from both consumers and investors.

International expansion has been steadily advancing. Aixi maintained its first-market position in Indonesia, while also extending into emerging markets such as the Philippines, Vietnam, and Africa and Latin America. At the same time, Mengniu strengthened its strategic positioning of Burra Foods for its B-end and Bellamy’s for its C-end, grounded in Australia, and accelerated further expansion and development across key domestic markets, Southeast Asia, and other global priority markets.

Four capabilities evolving, forging resilience across the entire industry chain

During the reporting period, facing a complex environment in which domestic market supply was strong but demand was weak, consumption needs diversified, and channel structures were undergoing accelerated transformation, Mengniu actively embraced change. Through comprehensive upgrading of “Four Capabilities”—brand leadership, scientific and technological innovation, digital and intelligent transformation, and channel upgrades—it forged development resilience that can withstand cycles.

With a long-term mindset, building a brand moat. Since the beginning of the year, leveraging the IP collaboration of “Ne Zha 2,” the entire lineup of products worked together and went viral, capturing widespread attention. By year-end, visits from IOC President Coates and brand ambassador Gu Ailing followed one after another. Mengniu joined hands with top domestic and international IPs and connected with consumers through shared “dare to be strong” resonance. Mengniu continued to carry out offline brand activities throughout the year—from “dare to be strong” leading the hundreds-city marathon, to the eighth CIIE “full attendance” of open sharing, from supporting grassland youth to realize their dreams as World Cup flag-bearers, to supporting senior citizens in getting their square-dancing featured on CCTV… Through diverse cross-industry and richly layered brand activities, Mengniu deeply reached hundreds of millions of users. In every moment of empathy and resonance, it achieved unity of brand and performance, strengthening its brand moat.

Driven by innovation, creating new-quality productive forces. Mengniu’s self-developed new HMOs were approved again. The “Active Fresh Locking Technology” received international advanced certification. Its self-developed probiotics Lc19 and Hi188 were successively featured in leading international journals. Through the “highway” of industry-academia-research, achievements were transformed into products, providing systematic solutions for precise nutrition. Relying on its invention patent for “a formulated milk containing DHA algae oil and its production method,” Mengniu won the Silver Award at the 25th China Patent Awards in one fell swoop. It also received three innovation awards for dairy products worldwide at the 2025 World Dairy Congress, fully showcasing its scientific research strength and innovation leadership.

Using digital and intelligent transformation to reduce costs and increase efficiency across the entire chain. At the upstream farm level, Mengniu comprehensively improved overall competitiveness through digital and intelligent bases such as smart wearables, intelligent milking parlors, and unmanned feeding. In production, Mengniu accelerated the advancement of smart manufacturing. Within the year, its Wuhan plant was recognized as “the world’s largest single-site low-temperature yogurt factory” thanks to its world-class digital and intelligent flexible production lines and supply chain system. Together with its Ningxia Lighthouse plant, it became a benchmark for digital and intelligent factories in China’s dairy industry—“one in the south and one in the north.” In addition, Mengniu connected millions of retail terminals through its “Win-Win” platform at the channel end, enabling precise allocation of channel expenses. At the marketing end, it empowered consumers with deep insights through visualization of cost-effectiveness. A whole-process traceability system built on the “one item, one code” technology aims to help consumers enjoy milk with peace of mind.

Upgrading channels to meet diverse sub-segment needs. Mengniu accelerated the upgrade of both traditional and emerging channels, promoting seamless connection between online and offline scenarios and building a “full-domain channel ecosystem.” Online, it continuously deepened cooperation with platforms including platform e-commerce, content e-commerce, live-streaming e-commerce, and instant retail, driving double growth in online sales merchants and member scale. Offline, while consolidating traditional channels, Mengniu responded to customized channel needs and accelerated its positioning and layout in new tracks. For example, Mengniu provides customized products for channels such as Sam’s Club and Hema, creating best-selling products such as “Guan Yi Milk Early 8 tons tubs,” and continued to precisely meet consumers’ sub-segment needs through “product-to-channel alignment.”

Improving management to enhance quality and efficiency, building momentum to meet the cyclical recovery

Behind strong resilience is a management evolution that goes deep into the fundamentals. In 2025, Mengniu optimized asset quality during the industry downturn through proactive adjustments and lean management, improved operational effectiveness, and continuously returned trust to shareholders through deterministic high-dividend and share buyback policies—accumulating strength for the upcoming industry cyclical recovery.

Mengniu, together with joint venture companies such as Modern Dairy, promoted eight structure upgrades across the upstream and downstream, including “herd structure, feeding structure, and seed industry structure,” helping partner farms enhance their ability to withstand risks. Data shows that during the “14th Five-Year Plan” period, the average milk yield per dairy cow across Mengniu’s partner farms increased from 16 kilograms to 35 kilograms. The average cost of kilograms of milk across farms was reduced by nearly 0.2 yuan, fully achieving quality improvement, cost reduction, and efficiency gains.

At the same time, Mengniu advanced digital and intelligent and lean operations across its supply-chain system, achieving end-to-end cost reduction and efficiency enhancement from procurement, production, logistics, to sales. The announcement shows that in 2025, Mengniu’s selling and administrative expenses decreased year-on-year. Inventory turnover days and receivables turnover days were further optimized. Full-year operating cash flow and free cash flow reached 8.75 billion yuan and 6.3 billion yuan, respectively, both setting historical record highs. During the reporting period, Mengniu proactively optimized asset quality, identified and cleared certain historical risks related to idle facilities and accounts receivable, demonstrating outstanding management effectiveness and strong risk resilience.

The announcement shows that Mengniu formulated a three-year shareholder return plan for 2025-2027. The goal is for stable increases in dividends per share over the next three years, while also maintaining the share buyback pace in 2024 and 2025. Mengniu will continue to enhance shareholder returns through dividends and share buybacks. In the announcement, Mengniu stated that its dividend per share in 2025 will be 0.520 yuan, and the total dividend amount will be 20.170 billion yuan. Mengniu continues to return to shareholders with real actions, demonstrating confidence in its long-term value and its commitment to rewarding shareholders.

At the beginning of 2026, as raw milk supply and demand move toward balance and pricing stabilizes with clear signals, expectations for the industry’s cyclical recovery continue to grow. Mengniu also leveraged a combination of “Winter Olympics marketing + Lunar New Year” campaigns, successfully boosting sales conversion and ushering in a “strong start” for 2026. Multiple domestic and overseas institutions, including Goldman Sachs, Citibank, and CITIC, released positive assessments one after another, saying they look favorably on its future growth.

Mengniu’s President Gao Fei said, “In the opening year of the ‘15th Five-Year Plan,’ the industry overall is showing a good trend of stabilization and recovery, with prospects for recovery turning positive. Mengniu will actively respond to the national ‘15th Five-Year’ health-priority development strategy, firmly implement the execution of ‘One Body, Two Wings,’ accelerate its layout in nutrition tracks such as basic nutrition, functional nutrition, and medical nutrition. Through product value, it will continuously create nutritional value for consumers, and with the company’s own high-quality development, it will contribute new and greater efforts to accelerate the revitalization of the dairy industry and ‘Healthy China.’”

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Responsible editor: Song Yafang