Bright Dairy Inventory Analysis Report

Based on the collected financial data and market information, I provide you with a comprehensive analysis report on Bright Dairy’s inventory situation.

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Based on publicly disclosed financial data, Bright Dairy’s inventory situation is as follows [0][1][2]:

Time Node	Book Value of Inventory	Inventory Write-Down Reserve	Carrying Value of Inventory
June 30, 2025	RMB 3.403 billion	RMB 133 million	RMB 3.271 billion
September 30, 2025	Approximately RMB 2.918 billion	-	-
December 31, 2024	RMB 3.078 billion	RMB 131 million	RMB 3.078 billion

• Raw Materials: RMB 1.558 billion (write-down reserve: RMB 68 million)
• Finished Goods: RMB 1.782 billion (write-down reserve: RMB 65 million)
• Consumable Biological Assets: RMB 64 million (no write-down reserve)

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Bright Dairy has accrued impairment reserves for inventory in accordance with the Accounting Standards for Business Enterprises. The asset impairment loss in the first half of 2025 was

, which was compared to RMB 31.2 million in the first half of 2024, mainly due to “decrease in inventory impairment loss” [1].

This indicates:

• The company has accrued reasonable write-down reserves in accordance with accounting policy requirements
• Inventory quality is relatively controllable, and there is no large-scale unaccrued impairment risk

The dairy industry is facing multiple challenges [3][4]:

Indicator	2025 Data	YoY Change
Room Temperature Pure Milk Sales	-	-13.44%
Room Temperature Yogurt Sales	-	-18.45%~20%
Overall Liquid Milk Sales	-	-7.5%
Bright Dairy’s First Three Quarters Net Profit	RMB 87.21 million	-25.1%

1. Decline in Room Temperature Yogurt Business
   : This is one of Bright Dairy’s core products, which has been greatly affected [3]
2. Counter-trend Growth of Low-Temperature Fresh Milk
   : In Q1 2025, sales of low-temperature fresh milk increased by 2.51% year-on-year, but Bright Dairy’s scale in this field is not as large as Yili and Mengniu [4]
3. Price War Pressure
   : Oversupply has led to a continuous decline in fresh milk prices

Indicator	Value	Industry Reference
Current Ratio	0.86	Healthy Value > 1.0
Quick Ratio	0.58	Healthy Value > 0.8
Current Liabilities Exceed Current Assets	RMB 1.383 billion	Under Pressure

• The current ratio is below 1, and there is certain debt repayment pressure in the short term [0]
• Contract liabilities (advance receipts) of RMB 1.256 billion can alleviate part of the liquidity pressure
• The company has an unused credit line of RMB 268 million at China Construction Bank, and a comprehensive credit line of RMB 1.9 billion at Bright Food Group Finance Co., Ltd. [2]

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Based on actual financial data, the book value of Bright Dairy’s inventory is approximately

, not RMB 4.5 billion. The claim of RMB 4.5 billion may come from:

• Misunderstanding or misrepresentation of data
• Inclusion of other current asset items
• Market rumors or media estimates

1. The company has accrued approximately RMB 133 million in write-down reserves in accordance with accounting standards, with an accrual ratio of about 3.9%
2. Inventory decreased from RMB 3.4 billion in the first half of 2025 to RMB 2.9 billion in the third quarter, indicating that inventory is being digested
3. Synlait’s overseas business and breakthroughs in seed technology provide certain support [1]
4. The low-temperature fresh milk business still maintains a growth trend

1. Sales of core products such as room temperature yogurt continue to decline
2. The overall industry demand is weak, and price war pressure continues
3. Liquidity indicators are weak, with current ratio < 1
4. Net profit in the first three quarters of 2025 decreased by 25.1% year-on-year

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1. Pay Attention to Inventory Turnover Rate
   : Inventory turnover rate directly affects cash flow and impairment risk
2. Pay Attention to Changes in Product Structure
   : Growth of the low-temperature fresh milk business
3. Pay Attention to Industry Integration
   : The dairy industry has entered a stage of stock competition, and industry differentiation has intensified
4. Pay Attention to Policy Support
   : Data from the National Bureau of Statistics shows that the decline in dairy product output has narrowed from 2% for the whole year of 2024 to 0.3% in the first half of 2025 [3]

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Bright Dairy’s inventory

:

• The inventory scale has decreased from RMB 3.4 billion to RMB 2.9 billion, showing an improving trend
• The company has accrued reasonable write-down reserves in accordance with accounting policies
• Although the industry is under pressure, the company is responding to challenges through product innovation and business adjustments
• Liquidity risk requires attention, but the company has sufficient bank credit lines

It is recommended that investors continue to pay attention to the company’s inventory turnover, the recovery progress of the liquid milk business, and changes in the industry competition pattern.

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[0] Jinling API Financial Analysis Data

[1] Bright Dairy & Food Co., Ltd. 2025 Half-Year Report (http://static.cninfo.com.cn/finalpage/2025-08-30/1224621231.PDF)

[2] Bright Dairy & Food Co., Ltd. 2024 Annual Report (https://static.cninfo.com.cn/finalpage/2025-04-30/1223413933.PDF)

[3] CBNData - The Dairy Industry Enters a New Stage of Stock Competition: What is the Way Out Amidst Numerous Challenges? (https://www.cbndata.com/information/294481)

[4] Blue Whale Finance - Dairy Enterprises’ Competition Moves Towards “Technology War” (https://www.lanjinger.com/d/1763477885088588653)