Shares of YOURAN DAIRY (09858) climbed more than 8% in Hong Kong trading, reaching HK$4.38 at the time of writing, with a turnover of HK$64.99 million.

The rally follows the company's interim results, which showed revenue of RMB 10.627 billion for the first half of the year, up 3.3% year-on-year, while net profit attributable to shareholders reached RMB 806 million, marking a sharp turnaround from a loss in the prior-year period.

Analysts at Guotou Securities point out that the company's leading pasture operations, combined with a cyclical reversal in both raw milk and beef cattle prices, could unlock significant profit growth potential.

The key driver behind the swing to profitability was a substantial reduction in the net loss from fair value adjustments on biological assets less selling costs, which narrowed by RMB 916 million to RMB 1.316 billion. This improvement was underpinned by a slower decline in raw milk market prices, better disposal price spreads for culled cows, lower feed costs, and higher milk yield per cow.