HK Stock Market Move | Dairy industry stocks increase, with various regions expected to gradually introduce birth subsidies. Leading infant formula companies are expected to enjoy double-digit growth.

The dairy sector led the gains in the stock market, as of press time, YOURAN DAIRY (09858) rose by 7.08% to 2.27 Hong Kong dollars; MENGNIU DAIRY (02319) rose by 5.35% to 18.93 Hong Kong dollars; CHINA FEIHE (06186) rose by 5.63% to 5.63 Hong Kong dollars; and CH MODERN D (01117) rose by 2.02% to 1.01 Hong Kong dollars. The Founder pointed out that the United States' tariff levels and intensity exceeded market expectations. In the context of export pressure, more active fiscal and monetary support policies are worth looking forward to, and follow-up policies to boost consumption and stimulate domestic demand are expected to continue to be implemented, driving the stable improvement of the domestic economy. The bank stated that after the government work report of the Two Sessions in March clearly stated the formulation of policies to promote childbirth and provide parenting subsidies, subsidies for childbirth are expected to be gradually introduced in various regions to form a multi-point catalyst. Dongxing previously stated that the distribution of childbirth subsidies in various regions is conducive to increasing the birth rate, with low-tier cities benefiting more. Compared to first-tier cities where imported formula milk powder has a higher market share, domestically produced formula milk powder has a higher market share in lower-tier cities. The increase in the birth rate in lower-tier cities benefits the sales of domestic formula milk powder; in recent years, the implementation of the second registration of infant formula milk powder formulas and the introduction of new national standards have raised industry entry barriers. The improvement in industry concentration combined with the potential dividends of childbirth policies are expected to bring a double boost to profits and valuations for leading infant formula companies, benefiting CHINA FEIHE, Inner Mongolia Yili Industrial Group, and other leading infant formula companies.