A：The low-temperature business has achieved significant results around the three major sub-categories of nutrition, deliciousness, and functionality. Through the launch of high-end delicious daily fresh cheese, immune bottles, and other new products, the business growth space has been expanded. The intelligent production of the low-temperature Wuhan factory has obtained global authoritative certification, making it the largest and most efficient single yogurt factory in the world. The Southwest business has achieved growth of over 20%, and core products such as double protein lactose-free and HM children's nutrition products have effectively expanded the penetration rate of lactose intolerant and precision nutrition populations. At the same time, online and offline advantages channels continue to lead, and strategic cooperation with top coffee and tea beverage brands has been reached, driving overall sales growth.

A：In the ice cream business, Mengniu has launched innovative new products to cater to diverse consumer demands, with several new products becoming hot sellers. Among them, the Delan Shengxue brand has entered the market in Hong Kong and Macau, becoming the first high-end ice cream brand to receive a license in Hong Kong while also covering mainstream large supermarket systems. The infant formula business has performed well, with the Ruipengyou brand increasing brand visibility and sales conversion rate through patented formulas and the million-beneficiary campaign, achieving a positive growth trend. Additionally, the Bellamy brand grew by over 20% in the first half of the year, with a focus on high-end product lines particularly in the platinum products and Bellamy Platinum organic A2, accelerating market expansion in Southeast Asia.

A：This year, we have further strengthened our synergistic cooperation with Mykinda, empowering each other in terms of supply chain and research and development innovation. We have made concerted efforts in both the consumer (C-end) and business (B-end) markets, successfully solidifying the positioning of a national cheese brand and continuously expanding into a variety of scenarios such as leisure snacks, family dining tables, and the catering industry, breaking through the barriers of consumer groups and scenarios. At the same time, in the first half of the year, we have persisted in research and development-driven initiatives, achieving breakthrough progress from technological developments to commercialization in various fields such as professional dairy products and sports nutrition products. The revenue of sports and nutrition brands has shown strong growth, and our independently developed HMO has expanded into more application scenarios, with a series of products revolving around core technologies being launched.

A：This year, we have accelerated our pace in the deep processing layout. Currently, lactoferrin and D90 skimmed milk powder products have entered the debugging and listing stage. In terms of overseas markets, the Aixue brand is not only deeply cultivating the Southeast Asian market, but also accelerating the expansion into other emerging markets. We have successfully established market business structures in Africa and Latin America, taking a key step towards our global strategy.

A：We continue to deepen the strategic focus of the revolution, comprehensively promoting various aspects such as dual carbon action, zero deforestation in green packaging, green operations, and green supply chains, with the aim of creating industry-leading ESG competitive advantages and converting this advantage into quantifiable business value, to enhance the cooperative competitiveness of channel customers and B-end customers.

A：Facing the prominent fictitious contradictions, lack of diversification in product categories, and insufficient resilience in the industry chain, Mengniu will leverage the experience of mature global markets, especially the highly diversified solid consumer structure and high value-added raw material supply experience in European and American markets, to accelerate technological innovation, promote product innovation, upgrade product categories, and expand market scenarios, transitioning to high value-added professional fields.

A：In the first half of the year, we focused on expanding the value chain, launching high-cost-effective basic milk products, introducing soft milk and lactose-free series for lactose intolerant individuals, and ensuring that high-quality dairy products cover a broader market. At the same time, we have increased efforts in popular science education in collaboration with industry associations, professional institutions, and media, helping consumers establish scientific consumption awareness through scenario-based marketing, making dairy products a necessity for high-quality living.

A：Since its inception, Terun Su has continuously exceeded the limit of protein nutrition, launched strategic new products such as desert organic pure milk, embodying the pursuit of high-quality milk sources and a holistic industry chain mindset. This year, the launch of the Desert Organic Milk from the Sajin Gold Sea, originating from the core production area of ​​the Ulanbuhe Desert, with a protein content of 4.3 grams per serving, reshapes the high-end milk market, demonstrating the deep integration of natural endowment and industrial wisdom.

A：Yili strengthens investment in scientific research and innovation, deeply cultivates dairy science, and meets precise and comprehensive nutritional needs. In the first half of the year, it launched functional milks such as probiotic milk and vitamin milk. With the promotion of the Healthy China strategy, Yili gradually realizes precise, personalized, and even custom-designed nutrition intake concepts. It has successfully broken through industry difficulties with its independently developed HMO applications in infant and toddler formulas, liquid milk, and fresh milk products, enhancing precise nutrition levels. In addition, Yili also adheres to the layout of deep processing, reduces dependence on imports, and promotes the whole value chain of the Chinese dairy industry to leap to the high end.

A：In the first half of this year, the sales of liquid milk declined by about ten percentage points. Among them, the sales decline monitored by Mengniu itself was X percentage points, while the industry experienced a decline of Y percentage points. We hope to differentiate between these two sets of data to understand the reasons for the decline, whether it is due to weak demand or the impact of channel destocking.

A：Next year, under the assumption of a weak recovery, Mengniu needs to pay attention to changes in market share for its night (possibly referring to liquid milk) sales expectations. Although the market generally expects a reversal of the cycle, the forecast given at the Modern Dairy Industry Conference is that milk prices may be difficult to reach 4 yuan, and may only reach around 3.5 yuan. In this situation, it is necessary to analyze whether the cost of collecting milk from small dairy companies will truly be significantly higher than that of top companies, and how Mengniu will respond to expectations of growth in Vietnam in such market conditions.

A：The current industry is facing the issue of overall balance and structural difficulties, such as the mismatch between consumption and production. Companies can enhance their resilience through scenario switching, cost control, and shortening product launch cycles. At the same time, companies need to accelerate layout adjustments, improve industrial chain efficiency, and maintain advantages in areas such as feed costs and scale production. In addition, leading companies solve problems through efficiency improvements and structural upgrades, for example, Mengniu increases balance in the liquid milk field, explores new business models and product innovations to address the challenges brought by industry change.

A：The main challenges facing the liquid milk industry are the overall decrease in demand and changes in market share among top companies. Due to a decrease in sales for the top two companies, there is still inertia pressure in the liquid milk industry this year, partially due to overreliance on traditional expansion in distribution channels. Facing the opportunities and challenges brought about by changing scenarios, Mengniu has swiftly embraced change by launching products that cater to modern consumer trends, leading to double-digit growth in certain business units. At the same time, the company actively seeks profit improvement in the B2B sector by changing business models, increasing product development speed (such as using AI technology), and providing more competitive product solutions to adapt to the market's transformation demands.

A：Income in the first half of the year is declining, with a decrease in quantity of about 4%, and ASP has also decreased, indicating a decrease in both quantity and price. The situation in the second half of the year is similar to the first half, with still a decrease in quantity.

A：We are confident in the future profit improvement of Mengniu, and there is potential for growth. This potential mainly comes from changes in the product category structure, which will lead to an increase in operating profit. For example, although overall revenue has declined, other categories such as cheese, ice cream, fresh milk, etc. have experienced varying degrees of growth, and even low-temperature products have only seen a single-digit decline, which will drive an increase in overall operating profit margin.

A：Improving space is expected to increase profits from other categories within 2-3 years through optimizing category structure. Additionally, there is still room for improvement in SND costs. The company will focus on large-scale sports IP partnerships to ensure effective marketing expenses, and there is still room for lowering sales and management expenses as channels evolve. At the same time, the company will strengthen cost and expense management in the supply chain.

A： Mengniu's dividend ratio will not decrease, although the interim board of directors has decided not to pay dividends for now, but it may resume at the end of the year. In addition, the next round of stock buyback plan has been approved, with a buyback amount of 1 billion yuan, which will be implemented at a normal pace over the next three years.

A：Since July, the recovery trend in terminal consumption of liquid milk has narrowed compared to the second quarter, basically maintaining the trend of the second quarter.

A：As an active practitioner of the Two Mountains concept, Mengniu has achieved a number of successes and initiatives in sustainable development and green, low-carbon development. For example, they have created an oasis in the Ulan Buh Desert by planting over 98 million sand plants, and have established an organic industrial chain based on this foundation. There are 37 national-level green factories nationwide, with Yinchuan, Ningxia Province having completed the world's first fully digital factory, which has been recognized as a "lighthouse factory" with energy consumption reduced by 43% compared to traditional factories. In addition, there are several zero-carbon factories, and they have committed to achieving zero deforestation by 2030. By promoting the green development of the entire industry chain, Mengniu is committed to contributing to social and industrial sustainable development and has achieved the highest level of dual-A rating in the industry's ESG rating.