China Youran Dairy Group (SEHK:9858) Sees A Profit Turnaround, Is The Stock Still Cheap?

Why the new profit guidance matters for China Youran Dairy Group

China Youran Dairy Group (SEHK:9858) told investors it expects a profit of RMB 739 million to RMB 903 million for the first half of 2026, compared with a RMB 297 million loss a year earlier.

The company linked this turnaround to smaller revaluation losses on biological assets, higher culled cow prices, lower feed costs and higher milk yields, as well as improved sales volumes and gross profit from its core operations.

See our latest analysis for China Youran Dairy Group.

At a latest share price of HK$4.265, China Youran Dairy Group has a 30 day share price return of 37.58% and a 90 day share price return of 32.45%. Its 3 year total shareholder return of 180.59% contrasts with a decline of 14.70% in the year to date share price return, suggesting recent momentum has picked up again as the new profit guidance reshapes expectations around its risk and earnings profile.

If this turnaround story has you looking beyond a single stock, it can be useful to see what else is gaining interest in related areas. Use this moment to scan 104 top founder-led companies

China Youran Dairy Group now trades well below published analyst targets even after the recent jump. Is that discount a simple valuation gap, or is the market still pricing in real risks around the quality of this turnaround?

Preferred Price-to-Sales multiple of 0.7x for China Youran Dairy Group: Is it justified?

On a P/S of 0.7x, China Youran Dairy Group trades in line with both its peer group and the wider Hong Kong Food industry, so the market is not applying a clear discount or premium based on sales alone.

The P/S ratio compares the company’s market value to its revenue, which can be useful for businesses that are still loss making. For China Youran Dairy Group, this lens focuses attention on how investors value each unit of sales in the raw milk and ruminant farming solutions businesses, rather than on current profitability.

According to Simply Wall St, China Youran Dairy Group is assessed as good value against an estimated fair P/S of 0.8x. That implies the current 0.7x level sits below where the market could potentially re rate the stock if forecasts and business performance line up with expectations. However, compared with both its direct peers and the Hong Kong Food industry, the same 0.7x multiple screens as expensive, which suggests investors are already pricing China Youran Dairy Group at the higher end of the sector range on a sales basis.

Explore the SWS fair ratio for China Youran Dairy Group

Result: Price-to-sales of 0.7x (ABOUT RIGHT)

However, China Youran Dairy Group still faces risks from its recent loss making net income, as well as any reversal in feed costs or culled cow prices that supported guidance.

Find out about the key risks to this China Youran Dairy Group narrative.

Next Steps

The mix of optimism and caution around China Youran Dairy Group is clear, so it makes sense to move quickly and test the data yourself. To balance the upside case with the concerns that are still on the table, review the 1 key reward and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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