Second‑largest goat milk powder maker Yipin Dairy (宜品乳业) heads to Hong Kong for a "make‑up" exam: profit to the left, growth to the right

Yipin Dairy (宜品乳业) has quietly reappeared at Hong Kong's IPO gate, reportedly refiling a listing application less than two months after its first submission lapsed. On paper the company looks steady — revenue and gross margin ticked up and net profit posted modest gains — but beneath the surface the story is mixed: profits lifted by non‑operational items and cost cuts; organic growth in its core infant formula business is stalling. Can a heritage dairy player turn balance‑sheet resilience into a convincing growth narrative for investors?

Financial snapshot

Yipin reported revenues of RMB 1.614bn, 1.762bn and 1.864bn for the three years to end‑2025, with net profit of RMB 168m, 172m and 183m and gross margins around 50%. Yet first‑half 2025 shows a different rhythm: revenue fell 10.4% year‑on‑year to RMB 806m and net profit plunged 42.6% to RMB 56.7m. The year‑end picture was propped up by narrower bio‑asset fair‑value losses, higher government subsidies and lower finance costs — and by active working‑capital management that raised cash to RMB 471.8m. Red flags remain: inventories hit RMB 779m and inventory days stretched to 304, tying up capital and raising obsolescence risk if demand or packaging standards shift.

Growth challenge and IPO outlook

The growth question is the hard one. Yipin’s infant formula — its historical cash engine, particularly goat/sheep milk powder — is showing signs of peak: full‑year 2025 infant formula revenue slipped to RMB 1.009bn and now accounts for 54.2% of sales. Industry dynamics are not benign. Brokers estimate the 2025 infant formula market at about RMB 130bn, down 12.7% year‑on‑year, while larger rivals and cow‑milk formulas (Feihe (飞鹤), Yili (伊利) and others) push small‑protein products that eat into the sheep‑milk niche. Yipin points to temporary packaging‑driven shipment timing; independent analysts see competitive erosion.

The company is pitching a second growth curve: special medical purpose foods (FSMP), which grew at a reported 61.4% three‑year CAGR but from a modest base near RMB 300m. FSMP is attractive — high growth and higher margin potential — yet it is also dominated by foreign incumbents (Nestlé, Danone, Abbott) that control roughly 70% of the category and bring deep R&D and regulatory experience. FSMP carries heavy regulatory and product‑safety burdens; it has been reported that Yipin faced past quality issues and responded with remediation, but in a category serving infants and the medically vulnerable, any slip is costly to trust and to valuation.

Investors will price certainty. Peers with clear second engines enjoy richer multiples — Feihe trades at a single‑digit-to‑teens PE by some metrics, while companies with visible low‑temperature liquid milk traction command materially higher ratios. Yipin has cash and history, and it has trimmed leverage; but can it translate that heritage into an unambiguous, investable growth story? That is the make‑up exam investors and regulators will be grading.