China’s Dairy Giants Report Diverging Profits in 2026 First Half

Financial results from China’s leading domestic dairy companies show a broad recovery in revenue during the first six months of 2026. Distributor turnover improved after several quarters in which liquid-milk supplies exceeded demand and commercial inventories were reduced. The strongest improvement was reported in the companies’ main liquid-dairy businesses.

Yili recorded operating revenue of 64.33 billion yuan, an increase of 4.1% from a year earlier. Revenue from liquid milk rose 1.3% to 36.59 billion yuan. Its total net profit, however, fell by about 20% during the interim period.

Mengniu reported revenue of between 44.8 billion yuan and 45.0 billion yuan, representing growth of 7.8%. Net profit increased by almost 16%, exceeding market expectations. The company also raised its guidance for full-year profit growth to the high single digits.

The companies’ different profit performances were linked in the reports to their holdings in external mergers-and-acquisitions assets and specialist subsidiaries. Yili’s result included losses and goodwill impairments associated with Ausnutria, its infant-nutrition subsidiary. Ausnutria reported a net loss of 726 million yuan.

Mengniu’s earnings benefited from previous asset write-downs at Bellamy’s and an operational recovery at China Modern Dairy, an associated farming business. Its fresh-milk revenue rose by 30%, while Milkground’s cheese business also grew by 30%. The company’s milk-formula business recorded double-digit growth.

Conditions at the farming level also changed during the period covered by the reports. National herd consolidation and pasture optimisation were described as improving the balance between raw-milk supply and demand. In July, average farmgate milk prices in major producing provinces rose above their year-earlier levels for the first time in almost five years. The reports said retail discounting had also begun to ease as the second half of the year approached.

Analysts cited in the report said future profit recovery would depend on expanding beyond standard ambient white milk into higher-margin processing. Chinese dairy companies are investing in functional-nutrition products such as lactoferrin, casein and desalted whey powders. They are also developing dedicated supply lines for food-service customers, including tea-drink and bakery chains.