Within a year, New Dairy lost nearly 400 distributors.

Questions about AI · East China revenue growth but dealer loss: what hidden integration challenges lie behind?

On March 22, New Hope’s dairy listed company, New Dairy (002946), released its 2025 financial report.

As of now, New Dairy is the first leading dairy company to disclose its annual report. Last year, the company achieved revenue of 11.233 billion yuan, a year-on-year increase of 5.33%; net profit attributable to shareholders was 731 million yuan, up 35.98%. New Dairy’s revenue size has long been in the “second tier” among domestic dairy companies, second only to Yili, Mengniu, Bright Dairy, and Junlebao.

In 2025, the dairy industry is not optimistic, with overall cyclical oversupply and declining prices and volumes. Low-temperature dairy products are among the few sectors growing against the trend. New Dairy’s growth is largely due to “choosing the right track,” as it early on expanded into low-temperature dairy, with brands like Asahi Weipin, Today’s Fresh Milk, and Huaron.

However, New Dairy faces multiple operational pressures: intensified industry competition, near-stagnant growth in its core Southwest market, and shrinking dealer numbers.

Water Lotus/Photo

Reporters note that last year, Yili Jindian, Mengniu Daily Fresh, and Junlebao Yuexianhuo increased promotional activities in offline supermarkets. Facing intensified competition from giants, New Dairy significantly increased advertising and promotional investments.

The financial report shows that last year, the company’s sales expenses grew by 9.05% year-on-year to 1.81 billion yuan, outpacing revenue growth. Advertising expenses reached 316 million yuan, an increase of over 30%, accounting for 17.47% of sales expenses.

Looking at the longer timeline, New Dairy’s sales expense ratio (sales expenses/total revenue) rose from 13.55% in 2022 to 16.11% in 2025, indicating a decline in marketing conversion rates and brand competitiveness.

In March this year, New Dairy announced plans to list in Hong Kong. If successful, it will become the first domestic dairy company to achieve “A+H” listing. However, the capital market is not optimistic; the day after the announcement, the company’s stock price plummeted 9.21%.

New Dairy states that the Hong Kong listing aims to “meet business development needs, deepen internationalization strategies, and build an international capital operation platform,” but entering the dairy industry’s overseas markets is challenging. Based on the just-released financial report, its national expansion still faces difficulties, with regional disparities evident. How can it achieve globalization?

In 2025, New Dairy’s growth in the entire Western region nearly stagnated. The core Southwest region’s revenue was 3.83 billion yuan, only 0.04% higher than the previous year; the Northwest region’s revenue was 1.266 billion yuan, unchanged from the previous year.

East China has become a major growth market for New Dairy, with last year’s revenue reaching 3.524 billion yuan, up nearly 15%. However, dealer numbers in this region experienced large-scale loss, dropping from 1,051 to 785, a reduction of 266 dealers.

This is not an isolated regional phenomenon. Last year, New Dairy only increased dealers in the Southwest, while others shrank. The total number of dealers decreased from 3,461 to 3,078, an 11% reduction. The company only explained that North China’s dealer count decreased by 31.6% year-on-year, due to the optimization of some low-yielding, less contributive dealers, without clarifying the shrinkage in other regions.

Overall growth but significant regional divergence, partly related to New Dairy’s development history. Previously, the company acquired over a dozen local small dairy brands and operated them independently.

New Dairy’s previously acquired fresh yogurt brand, “Yichaoyou” Left Yu/Photo

This model’s advantage is rapid expansion in the short term, maintaining regional dairy channels locally. The disadvantage is difficulty in forming a strong national brand, as consumer awareness of “New Dairy” remains low, marketing resources are hard to concentrate, and this is not conducive to nationwide brand development.

Frequent acquisitions have also led to high asset-liability ratios. In 2022, this indicator approached 72%, which was seen by the market as a main reason for New Dairy’s pursuit of Hong Kong listing. The 2025 financial report shows the company’s debt ratio at 56.51%, down 8.1 percentage points from the previous year.

Water Lotus/Photo

Text editor: Zuo Yu