On August 26, China Feihe (06186) released its 2026 interim results, reporting revenue of 9.36 billion yuan, a 2.3% year-on-year increase, alongside a net profit of 901 million yuan with sustained improvements in earnings quality. Cash flow and operational metrics continued to demonstrate healthy momentum, steadily delivering on long-term business value and shareholder returns.
The infant formula sector is currently navigating a deep adjustment cycle, shaped by shifting birth demographics, intensifying market competition, escalating consumer demand for premium and functional products, and heightened volatility in global milk protein raw material prices. These multiple factors are testing the anti-cyclical capabilities and long-term resilience of dairy companies. Feihe, leveraging its vertically integrated quality system cultivated over years, has fortified market trust, maintained its leadership position in China's infant formula segment, and converted its long-accumulated core research capabilities in milk protein and raw material self-sufficiency into fresh growth drivers.
Driving product innovation to unlock structural gains in the premium segment
Amid intensifying industry competition and increasingly cautious consumer attitudes toward dairy safety, Feihe has secured the top spot in China's infant formula market share for seven consecutive years, underpinned by consistent product strength and brand equity. This solidifies its operational foundation and demonstrates robust capability to navigate industry cycles.
On the product front, Feihe continues to drive innovation, with its core big-hit product matrix leading the market. The Zhuorui series maintains its industry-leading position through mature formula advantages and long-standing market reputation, while the ultra-premium Jicui and Qicui series, built on localized breast milk research, deliver "a new generation better suited to Chinese babies" with evidence-based feeding outcomes. The Jicui formula has been shown to accelerate the growth of infants' own immunoglobulin slgA by 10.6%, and the Qicui formula supports cognitive development speed by 1.2 times, precisely aligning with modern families' demand for refined, premium infant nutrition. These products continue to gain market recognition through fresh, safe, and verifiable nutritional quality.
Unlike most industry players that focus narrowly on single-formula iterations, Feihe has extended quality competition across the entire industrial chain, redefining premium milk powder standards with "fresh raw materials plus fresh products" and propelling the industry into the fresh milk powder era. From pristine ecological pastures along the 47th parallel north latitude golden milk source belt, to intelligent temperature-controlled farming and AI-driven cow health management, and further to 2-hour fresh milk rapid processing, sterile closed production, and comprehensive quality inspection controls, Feihe has established a full-chain freshness system spanning six dimensions: milk sources, raw materials, formulas, products, traceability, and standards. Notably, Feihe has achieved fresh self-production of core protein raw materials, securing a freshness advantage measured in "days" rather than "years."
Additionally, Feihe pioneered the world's first fresh milk powder raw material traceability system and, in collaboration with the China National Institute of Standardization, released the industry's first "Fresh Quality Management Standard for Milk-Based Raw Materials," incorporating "fresh raw materials" as an independent dimension within the standards framework. This transforms "freshness" from a marketing concept into a comprehensive set of rigid standards spanning pastures, R&D, production, finished goods, and traceability, ensuring safety and quality remain firmly in its own hands.
Full-chain quality control fortifies the safety foundation, with smart manufacturing safeguarding every can of premium infant formula
As the "national staple food" for infant health, safety and quality form the bedrock of the industry and constitute an inviolable core bottom line. Feihe, drawing on years of supply chain development, embeds quality safety principles throughout the entire production process, establishing a comprehensive safety system covering source control, smart manufacturing, quality testing, and end-to-end traceability.
A recent CCTV news livestream, "Tracing Purity, Exploring Fresh Nutrition," provided an inside look at Feihe's pharmaceutical-grade clean production workshop, built to Class 100,000 standards. The workshop employs fully enclosed pipeline conveyance, automated production equipment, and rigorous clean management systems to minimize contamination risks at the source. During the livestream, a guest placed a 2-millimeter microsphere into a milk powder can; even when the sphere sank to the middle of the can, the equipment precisely identified and automatically removed it, showcasing the safety assurance capabilities of Feihe's smart manufacturing system.
Feihe's intelligent production lines are equipped with AI-powered visual inspection systems that integrate near-infrared detection technology with deep learning algorithms, enabling real-time monitoring of over 200 core production indicators with rapid anomaly identification, alerting, and resolution. To date, Feihe has established 1,322 quality management protocols covering agriculture and livestock management, R&D technology, and laboratory operations, implementing 24-hour full-process testing across 25 inspection procedures and 411 individual test items. The company also holds 12 quality-specific patents, continuously advancing quality management from outcome-based testing toward proactive, full-process risk prevention.
Raw material self-production breaks new ground, with milk protein technology unlocking a second growth curve
While the full-chain freshness quality system underpins Feihe's stable core business, self-controlled milk protein raw material production represents the fundamental confidence for opening up long-term growth space. For infant formula, the true determinants of core nutrition and quality ceilings are not merely milk sources but core raw materials such as whey protein, lactoferrin, and functional proteins, which account for 70%–80% of the product composition.
During the first half of 2026, global milk protein raw material prices continued to climb, further exposing the supply chain vulnerabilities of domestic dairy companies that rely heavily on imported ingredients. Imported raw materials are susceptible to international price fluctuations, and long-distance storage and transportation can degrade nutritional activity, introducing quality uncertainties. Supply chain security has become a shared industry challenge.
As early as 2011, Feihe took the lead in initiating R&D efforts on milk protein deep-processing technology. Through over a decade of sustained R&D investment, long-term industry-academia-research collaboration, and iterative scaling of production lines, the company has mastered globally leading fresh extraction technology for milk proteins. It has achieved 100% self-research and self-production of 16 key core raw materials, including lactoferrin, demineralized whey protein, and alpha-lactalbumin, with 12 additional technologies in reserve. Three milk protein deep-processing bases have been established in Inner Mongolia, Heilongjiang, and Ningxia, all fully operational by August 2026, forming a world-class milk protein raw material supply system.
This definitive technological foundation will break the long-standing monopoly of overseas raw materials and technology, addressing the critical upstream shortcomings of China's dairy industry. Internally, Feihe's raw material self-production helps stabilize against international price volatility, ensuring cost and product quality consistency while strengthening operational resilience. Simultaneously, it enables efficient reuse of core technologies, converting supply chain advantages in technology, raw materials, and quality into product competitiveness across multiple categories and all population segments.
Building on its infant formula strengths, Feihe's full-lifecycle nutrition product matrix continues to expand, encompassing youth cheese, Aiben PRO50 adult milk powder, fresh-extracted milk protein series nutritional powders, and slow-fermented cheese. These offerings cover infants, children, adults, and seniors, completing the transition from "infant formula leader" to "full-age nutrition technology enterprise," precisely capturing the national trend toward comprehensive nutrition upgrading and opening new domestic growth avenues.
At the same time, Feihe is advancing its globalization strategy through mature technology systems and supply chain capabilities, evolving from product export to system export. The company has completed business deployment in key regions including North America, the Philippines, and Indonesia, bringing China's high-quality dairy products to the global stage and demonstrating Chinese dairy enterprises' robust capabilities in upstream deep processing, raw material autonomy, and full-chain quality control, while reserving overseas incremental markets for medium-to-long-term growth.
Externally, the milk protein business is emerging as Feihe's new growth engine. The company has established an independent raw materials business unit to drive commercialization, exporting domestically produced high-quality milk raw materials globally. It has launched a new protein raw materials brand, "Zhichen FURIMMO," unveiled six self-produced protein raw materials, and forged strategic partnerships with leading sports nutrition and health industry players including Kangbite, Xizi Health, Baihe Biologics, and JD.com. Collaborations with Aker BioMarine, Shandong Yuxin Bio-Tech, Qingdao Seawit, Zhejiang YUANSHENG Bio, and Sinochrom have resulted in five innovative protein compound raw materials, addressing protein raw material supply challenges. Leveraging a leading domestic casein production line, Feihe is perfecting its milk protein nutrition strategic layout and is poised to become a core global casein supplier by the end of 2026, carving out a definitive second growth curve.
Feihe Chairman Leng Youbin stated: "We must not only secure protein supply for our own people but also bear the responsibility of providing premium protein solutions globally, showing the world the hard power of Chinese dairy enterprises in deep processing—capable of producing not only excellent milk powder but also superior raw materials."