China Modern Dairy Holdings Ltd (01117) shares climbed more than 9% in Hong Kong trading, reaching a high of 8.96% gain to HK$1.46, with turnover of HK$64.06 million.

The company recently issued a profit alert, forecasting a pre-tax profit of no less than RMB 43 million for the first half of 2026, marking a turnaround from a loss in the same period last year. Additionally, China Modern Dairy has completed its tender offer for China Shengmu Organic Milk Ltd.

Notably, recent milk price increases across multiple regions have garnered market attention. On July 23, data from the Animal Husbandry and Veterinary Bureau of the Ministry of Agriculture and Rural Affairs showed that the average price of raw milk in 10 major producing provinces, including Inner Mongolia and Hebei, was RMB 3.05 per kilogram in the third week of July 2026, up 0.3% from the previous week and 0.3% higher year-on-year.

Huaxi Securities believes that the turnaround to profitability for leading dairy farming companies initially signals a reversal in the milk price cycle. The brokerage notes that the narrowing supply-demand gap, combined with the upcoming peak season from August to October, could accelerate the cycle's bottoming and recovery. Huaxi Securities also suggests that the first-half profit alert boosts confidence in a significant full-year profit improvement, progressing from financial statement improvements to operational profit enhancements.