New Dairy's National Breakthrough Strategy: Analysis of Regional Dairy Enterprises Merging 15 Local Brands

New Dairy (New Hope Dairy, stock code: 002946.SZ), a typical representative of “regional M&A-type” enterprises in China’s dairy industry, has achieved national layout through three large-scale mergers and acquisitions [1]. According to the latest financial data, the company’s current market capitalization is USD 15.95 billion, with a P/E ratio of 23.22 times and ROE of 20.69%, reflecting strong profitability [2].

Through the above mergers and acquisitions, New Dairy has established a point-like layout in the low-temperature milk market nationwide, forming a differentiated competition pattern with Yili and Mengniu [1]. Currently, the company has formed five core regional markets in Southwest, East, North, Northwest and South China, with its business map covering major urban agglomerations across the country.

China’s dairy industry presents an obvious “two superpowers and multiple strong players” pattern. Data in 2023 shows that Yili and Mengniu together account for more than 56% of the market share, with 30.2% and 25.9% respectively [3]. In the room-temperature white milk segment, the CR2 is as high as 87%, with Yili accounting for 48% and Mengniu 39%, forming an almost monopolistic competitive barrier [3].

However, the liquid milk industry is undergoing structural adjustments. The industry’s CAGR from 2022 to 2024 is -4.2%, and the total channel sales of dairy products in September 2025 decreased by 16.8% year-on-year [4]. Under the pressure of the market environment, the differentiation of regional dairy enterprises has intensified—Bright Dairy and Sanyuan Foods have seen revenue declines, while New Dairy and Junlebao have maintained expansion [4].

The low-temperature fresh milk market provides breakthrough opportunities for regional dairy enterprises. According to Huatai Securities data, in 2023, Yili and Mengniu together accounted for only 28% of the low-temperature fresh milk market [4], far lower than their dominant position in the room-temperature milk segment. This is mainly due to the physical characteristics of low-temperature milk:

• Sales radius limitation
  : Pasteurized milk has a theoretical sales radius of about 300-500 km
• High cold chain requirements
  : Need to be stored at 2°C-6°C throughout the entire process
• Short shelf life
  : Usually 5-7 days

The national penetration rate of low-temperature fresh milk increased from 28% in March 2018 to 39% in March 2024 [5], showing a rapid growth trend. This has created a strategic window for regional dairy enterprises with local milk source advantages.

New Dairy has established the “Fresh Strategy” as its core development direction, and proposed the “Fresh Cube Strategy” in 2023, with strategic goals including [1]:

1. Scale growth
   : Drive double-digit compound annual growth in scale and double the net profit margin
2. Category focus
   : Focus on low-temperature fresh milk and low-temperature specialty yogurt as core key categories
3. Channel upgrade
   : Achieve 30% share of D2C business scale by 2027
4. Digitalization
   : Strive to reach over 50 million digital users within five years

The “24-Hour” series is a strategic product of New Dairy, with the product concept of “time defines freshness” [1]. Data in 2023 shows:

• Low-temperature fresh milk sales achieved high double-digit growth
• National market share increased steadily
• The “24-Hour” high-end series products grew by nearly 40% year-on-year

The company plans to drive the compound annual growth rate of high-quality fresh milk products represented by the “24-Hour” series to be no less than 20% in the next five years [1]. However, the current sales radius of this product is still relatively limited, which mainly verifies that New Dairy has product strategy capabilities.

New Dairy regards D2C businesses such as home milk subscription, image stores, independent subscription, and e-commerce as the first engine of channel growth [1]:

• Fresh GO Platform
  : Optimize delivery services to achieve multi-scenario services of “home delivery, store delivery, and cabinet delivery”
• 24-Hour Fresh Milk Internet Celebrity Stores
  : Create offline experience scenarios and trigger a check-in boom
• Digital Lighthouse Project
  : Efficient supply chain system from pasture to user

The company plans to achieve a 30% share of D2C business scale by 2027, and Chengdu has already achieved high penetration and low return loss rates [1].

New Dairy has achieved regional breakthroughs through the “Special Zone Experience” model. Taking the acquisition of Xiajin, a leading dairy enterprise in the Northwest, as an example, it originally accounted for 50% of the market share in Ningxia, mainly focusing on room-temperature milk [1]. New Dairy helped it improve low-temperature dairy products, and Xiajin’s low-temperature dairy products began to make profits in less than half a year, proving the synergy effect of regional integration.

• Low-temperature fresh milk products are inherently difficult to differentiate: “white milk, just white milk” [6]
• 24-Hour fresh milk has not yet formed national brand awareness
• Sales radius is limited by cold chain

1. Product portfolio strategy
   : 24-Hour meets “time needs”, and pasture milk meets “milk source needs” [6]
2. Sterilization technology innovation
   : Expand the market with products that have higher sterilization temperature, longer shelf life, and lower price
3. Channel penetration
   : Penetrate into mass channels such as Yonghui Supermarket and Xiaoxiang Supermarket in East and North China [6]

Yili and Mengniu continue to exert efforts in the low-temperature milk segment:

• Yili launched “Jindian Fresh”
• Mengniu launched “Mengniu Fresh Daily”
• Continuously sink into regional markets with the advantage of long shelf life

New Dairy’s Response Strategies:

1. Differentiated positioning
   : Focus on the advantages of “same-day fresh and local milk source”
2. B-end breakthrough
   : Weipin fresh milk accounts for 40% of the market share in Shanghai’s boutique cafes, with customers including Manner and M Stand [4]
3. Technology investment
   : Transform into a scientific and technological nutrition food enterprise through biotechnology and digital technology

The company’s stock price has risen by 26.48% in the past year and 40.06% in three years, showing good growth [2].

• Continuous increase in low-temperature milk penetration
• Increase in D2C channel share
• Release of regional integration synergy effects

• Sustained downturn in industry demand
• Price war in low-temperature milk between Yili and Mengniu
• Fluctuations in raw milk prices
• Food safety and quality control

New Dairy is exploring a differentiated national breakthrough path through the three-in-one model of “merger and acquisition integration + Fresh Strategy + D2C channel”. Although there is no national blockbuster product yet, the 24-Hour fresh milk series has shown strong growth momentum.

1. Strategic correctness
   : Against the backdrop of shrinking room-temperature milk market and rapid penetration of low-temperature milk, New Dairy’s “Fresh Strategy” aligns with industry development trends
2. Execution path
   : Through regional brand integration + D2C channel + digital operation, it is expected to gradually break through the sales radius limitation
3. Key variable
   : Whether the 24-Hour series can grow into a national blockbuster product will determine whether the company can achieve true nationalization
4. Investment suggestion
   : As a high-quality target in the low-temperature milk track, New Dairy has medium-to-long-term investment value; it is recommended to pay attention to changes in its low-temperature milk market share and progress in increasing D2C channel share

[1] China Post Securities - New Dairy (002946.SZ): Low-temperature Strategy Leads to Continuous Improvement in Profitability (https://pdf.dfcfw.com/pdf/H3_AP202507181711011999_1.pdf)

[2] Jinling AI - New Dairy Company Overview and Financial Data (002946.SZ)

[3] East Money - 2024 China Dairy Industry Report (https://pdf.dfcfw.com/pdf/H3_AP202501031641521560_1.pdf)

[4] East Money Network - Dairy Industry Changes 2025: Regional Dairy Enterprises, Intensified Differentiation (https://finance.eastmoney.com/a/202512263603148120.html)

[5] Sina Finance - Regional Dairy Enterprises Divide and Rule, Accelerate Dominance: Are Yili and Mengniu’s Positions Unstable? (https://t.cj.sina.cn/articles/view/3273883705/c323803900101nnf0)

[6] Narrowcast - Case: Why Are There More and More New Hope Milks on Shelves? (https://www.headscm.com/Fingertip/detail/id/43288.html)