Changes in Hong Kong stocks | Dairy stocks bucked the trend, and Citi dairy countervailing measures will help ease the oversupply of domestic raw milk

The Zhitong Finance App learned that dairy stocks bucked the trend. As of press release, Hyundai Animal Husbandry (01117) rose 3.8% to HK$1.64; Youran Animal Husbandry (09858) rose 3.44% to HK$5.11.

Citi released a research report saying that the Ministry of Commerce recently announced that starting from December 23, temporary countervailing measures will be imposed on imports of specific dairy products originating in the European Union, and temporary tariffs of 21.9% to 42.7% will be imposed, mainly on products such as fresh cheese, curd, and cream. According to Citi estimates, the EU accounts for 20.7% of imports of related products. Since domestic production costs are lower than imports, it is expected that the EU's share of related products will be replaced by the domestic solid dairy processing business, which will help ease the oversupply of domestic raw milk to a certain extent.

Citi believes that the development of domestic solid dairy companies led by Yili, the main customer of Youran Animal Husbandry, will be boosted. It is expected that this measure will boost domestic demand for raw milk, and believes that its high-end and specialty dairy products can better meet the needs of downstream consumption upgrades. Huachuang Securities pointed out that in terms of the strength of the measures, the ad valorem subsidy rate, which is generally close to 30%, has significantly increased the cost of relevant EU imported products; in terms of implementation timelines, the policy was implemented immediately the day after publication, demonstrating the determination of relevant departments to stabilize the market, and the impact is expected to spread rapidly to the market.