Feihe (06186) reported a revenue of 9.36 billion yuan for the first half of 2026, with self-produced milk protein raw materials reshaping its long-term development resilience.

On August 26, CHINA FEIHE (06186) released its performance report for the first half of 2026. During the reporting period, the company achieved revenue of 9.36 billion yuan, a year-on-year increase of 2.3%; net profit was 901 million yuan, with continuous improvement in profit quality. Cash flow and operational quality maintained a positive trend, steadily realizing the company's long-term operational value and shareholder returns. The infant formula industry is currently undergoing a deep adjustment cycle, facing challenges from changes in the birth population structure, intensified market competition, high-end and functional demands from consumers, and increased fluctuations in global dairy protein raw material prices. These multiple factors test the cyclical resilience and long-term development strength of dairy companies. Feihe has built strong market trust through many years of commitment to a quality system across the entire industry chain, continuously stabilizing its position as a leader in China's infant formula market. It has transformed its long-accumulated core research capabilities in dairy proteins and advantages in self-produced raw materials into new growth momentum. Continuously promoting product innovation, Feihe is tapping into structural increments in the high-end sector. In an increasingly competitive industry where consumers are more cautious about dairy product safety, Feihe has maintained its position as the market leader in China's infant formula segment for seven consecutive years, solidifying its operational foundation and demonstrating strong resilience to industry cycles. On the product side, Feihe is continuously driving product innovation, with its core product lines consistently leading the market. The Zhuorui series, benefiting from its mature formula and long-standing market reputation, remains at the forefront of the industry, while the newly launched ultra-high-end Jicui and Qicui series leverage domestic breastfeeding research outcomes to create a new generation of formulas better suited for Chinese babies. The Jicui verification effectively accelerates the growth of babies' own immunoglobulin slgA by 10.6%, while the Qicui formula verification helps enhance cognitive ability by 1.2 times, precisely matching the new generation of families' demands for refined and high-end infant nutritional products, continually garnering market recognition with fresh, safe, and verifiable nutritional quality. Unlike many industry brands that focus on single formula iterations, Feihe has long expanded its quality competition to the entire industry chain dimension, redefining high-end milk powder standards with fresh raw materials + fresh products and driving the industry into the era of fresh milk powder. From the pristine ecological pastures in the golden milk source belt at 47N latitude to intelligent temperature-controlled breeding, AI cow health management, rapid processing of fresh milk within two hours, sterile closed production, and comprehensive quality inspection control, Feihe has established a fresh system covering six dimensions: milk source, raw materials, formulas, products, traceability, and standards. Notably, Feihe's fresh and self-produced core protein raw materials have achieved a new leading advantage in freshness from years to days. Furthermore, Feihe was the first to launch a global traceability system for fresh milk powder raw materials and, in collaboration with the China Academy of Standardization, released the Fresh Quality Management Standard for Dairy Source Raw Materials, incorporating freshraw materials as an independent dimension into the standard system. This has transformed freshness from a marketing concept into a rigid standard encompassing farms, research, production, finished products, and traceability, truly taking safety and quality into its own hands. Comprehensive quality control establishes a solid safety foundation, while intelligent manufacturing safeguards the quality of every can. As infant formula is considered the national staple food that protects babies' healthy growth, safety and quality are fundamental to the industrys existence and an inviolable core baseline. Feihe relies on years of industry chain construction, embedding quality and safety concepts throughout the manufacturing process and developing a comprehensive safety system that covers source control, intelligent manufacturing, quality inspection, and entire-process traceability. Recently, a live broadcast by CCTV news titled Traceability to Purity, Exploring Fresh Nutrition showcased Feihes pharmaceutical-grade clean production workshop with a cleanliness level of 100,000. The workshop employs fully enclosed pipeline transportation, automated production equipment, and a stringent cleanliness management system to minimize contamination risks during the production process. During the live broadcast, a guest added a 2mm microball to a can of milk powder. Even when the ball sank to the middle of the can, it was accurately identified and automatically removed by the equipment, demonstrating Feihe's intelligent manufacturing system's ability to ensure product safety and quality. It was noted that Feihe's intelligent production line is equipped with an AI vision detection system, integrating near-infrared detection technology with deep learning algorithms to monitor over 200 core production indicators in real-time, achieving quick identification, early warning, and handling of abnormal risks. Currently, Feihe has established 1,322 quality management systems covering the entire process, including farm management, research and development technology, and laboratory management, implementing 24-hour comprehensive monitoring across 25 testing procedures and 411 individual tests. The company also holds 12 exclusive quality patents and is continuously upgrading quality management from result testing to risk prevention throughout the entire process. With self-produced raw materials breaking through bottlenecks, dairy protein technology opens a second growth curve. If the fresh quality system supports the stability of Feihe's fundamentals, the controllable self-produced dairy protein raw materials represent the core guarantee for Feihe to unlock long-term growth potential. For infant formula, what truly determines the core nutrition and quality ceiling of the product is not just the milk source but also the core raw materials like whey protein, lactoferrin, and functional proteins, which account for 70% to 80% of the total composition. In the first half of 2026, global dairy protein raw material prices continued to rise, revealing the supply chain shortcomings of domestic dairy companies, which relied heavily on imported materials: imported raw materials are vulnerable to international price fluctuations, and long-distance storage and transportation can compromise nutritional viability, leading to quality uncertainties, with supply chain security becoming a common challenge for the industry. As early as 2011, Feihe took the lead in initiating research and development of advanced dairy protein processing technology. Through more than a decade of sustained R&D investment, long-term collaboration between industry, academia, and research, and iterative implementation of large-scale production lines, Feihe has mastered globally leading dairy protein extraction technology. It has achieved 100% self-research and production of 16 key core raw materials, including lactoferrin, demineralized whey protein, and -lactalbumin, and possesses 12 technological reserves, establishing three dairy protein processing bases in Inner Mongolia, Heilongjiang, and Ningxia, all set to be operational by August 2026, thereby building a world-class dairy protein raw material supply system. This solid technological foundation will completely break the long-standing monopoly of overseas raw materials and technology, addressing the core upstream shortcomings of China's dairy industry. Internally, self-producing raw materials can stabilize the fluctuation of international raw material prices, ensuring stable costs and product quality, thereby enhancing operational resilience; at the same time, it facilitates efficient reuse of core technologies, comprehensively transforming technological, raw material, and quality advantages from the supply chain into product competitiveness across multiple categories and demographics. Based on its existing advantages in infant formula products, Feihe's product matrix for full lifecycle nutrition continues to be refined, expanding into multi-diverse products such as youth cheese, Aibon PRO50 adult milk powder, freshly extracted dairy protein nutrient powder, and slow-fermented cheese, covering all demographics from infants and young children to adolescents, adults, and the elderly. This transition from being a leader in infant formula to a full-age nutritional technology enterprise accurately grasps the trend of national nutritional upgrading and opens up new domestic growth spaces. At the same time, leveraging mature technology systems and supply chain capabilities, Feihe is embarking on a global expansion, advancing from product export to system export. Currently, Feihe has established operations in key regions such as North America, the Philippines, and Indonesia, bringing high-quality Chinese dairy products to the global market and showcasing the robust capabilities of Chinese dairy companies in upstream deep processing, self-sufficient raw materials, and comprehensive quality control. Externally, the dairy protein business is becoming a new growth engine for Feihe. The company has established an independent raw materials business division to promote commercialization, exporting domestically produced high-quality dairy raw materials globally, launching a new protein raw materials brand Zhi Chun FURIMMO, and significantly releasing six self-produced protein raw materials. Strategic collaborations have been established with leading companies in the sports nutrition and health sectors, such as CPT, Xizi Health, Baihe Bio, and JD.com, and five innovative protein composite raw materials have been released in collaboration with Aker BioMarine, Yuxin Bio, Xiaozhao Technology, Yuan Sheng Bio, and Huazhong Science and Technology. These efforts aim to solve the challenges of protein raw material supply. Relying on domestically leading casein large-scale production lines and refining its dairy protein nutrition strategy, Feihe aims to become a core supplier of casein globally by the end of 2026, opening a definitive second growth curve. Feihe Chairman Leng Youbin stated: We not only need to meet the protein demands of our people but also have the responsibility to provide high-quality protein solutions for the world, allowing the global market to witness the hard power of Chinese dairy companies in the field of deep processingcapable not only of producing excellent milk powder but also of supplying quality raw materials.