Miaoke Blue Ocean's profits surge, the cheese first stock makes a comeback?

Presented by|China Interview Network

Reviewed by|Li Xiaoyan

From “milk gold” to a staple on the national dining table, China’s cheese market has surged rapidly amid the wave of consumption upgrading. As the absolute leader in the domestic cheese segment, Yili LanDuo (600882.SH) once quickly rose to the top with its children’s cheese stick product, but it has also found itself caught in a double bind of price wars and marketing wars during industry in-fighting. In 2025, the company delivered an impressive performance with both revenue and profit increasing year over year: non-GAAP net profit surged 235.94% year over year. This not only confirmed the strong recovery of its core cheese business, but also sent a positive signal that the company is moving out of the quagmire of price wars and toward high-quality growth. Although leadership changes and historical legacy issues have caused short-term disruptions, driven by the dual forces of Yili’s deep empowerment and strategic upgrades, this “No. 1 cheese stock” is entering a new development cycle.

In 2025, Yili LanDuo achieved total operating revenue of RMB 5.633 billion, up 16.29% year over year, breaking through the RMB 5 billion mark for the first time; net profit attributable to shareholders was RMB 118 million, up 4.29% year over year; and non-GAAP net profit attributable to shareholders was RMB 158 million, up a substantial 235.94% year over year. The company’s operating quality improved significantly. This achievement not only reversed the slump in revenue in 2024, but also set the company’s best performance in the past three years, making it a growth benchmark in the dairy sub-segment.

From a business-structure perspective, the cheese business, as the core growth engine, has continued to gain momentum. For the full year, it generated revenue of RMB 4.615 billion, up 22.03% year over year, accounting for as much as 82.37% of total revenue, further solidifying its leading position. According to Worldpanel consumer index data, in 2025 Yili LanDuo’s market share in China’s packaged cheese brand sales exceeded 38%. Its three main core categories—cheese sticks, mozzarella, and cheese slices—were all ranked first in their respective sub-markets, continuing to lead the industry.

Quarterly data shows the company’s performance exhibiting an accelerating growth trend quarter by quarter. In the fourth quarter, revenue reached RMB 1.676 billion, up 34.13% year over year, setting a historical high for single-quarter revenue. Although the company’s quarterly net profit attributable to shareholders turned negative due to the impact of non-recurring items, non-GAAP net profit swung to profitability and reached RMB 37.8943 million, up 347.78% year over year, fully demonstrating a substantive improvement in the profitability of its main business.

Optimization on the cost side is also a key signal that the company has moved out of the price war. In 2025, Yili LanDuo’s selling expense ratio fell by 1.27 percentage points year over year to 17.76%, and its management expense ratio decreased by 0.4 percentage points year over year to 5.15%. Expense efficiency improved significantly. This means the company has shifted from the past extensive model of “high investment to drive growth” to a high-quality development path of “refining operations and improving efficiency,” with profitability continuing to recover.

Against the backdrop of intensifying industry competition and the challenges of reliance on a single category, Yili LanDuo has accelerated its strategic transformation with Yili’s empowerment. It has clearly proposed a development strategy of “dual-engine driving from both C-side and B-side, plus M&A going overseas,” upgrading from “children’s cheese stick expert” to “a provider of cheese solutions for all scenarios.”

On the C-side, the company uses children’s cheese sticks as its base and continues to expand consumption scenarios across all age groups. On the one hand, it consolidates its advantages in the children’s market through celebrity endorsements and IP collaborations. On the other hand, it launches new products such as cheese mini-triangles, cheese slices, and spreadable cheese, entering adult leisure and family dining-table scenarios—continuously enriching its product matrix. In 2025, the company’s cheese revenue in its family dining-table series achieved high growth; the sales volumes of products such as mozzarella and cheese slices continued to climb, effectively breaking the single-label constraint of “children’s snacks.”

The B-side business has become a new growth engine, showing strong explosive momentum. In 2025, Yili LanDuo’s revenue from the foodservice industrial channel increased 36.26% year over year, becoming a core supplier for major chain brands such as Yum China, and earning industry honors including the “Excellent Supply Chain Award” and the “Golden Wok Award.” Leveraging Yili’s supply chain advantages, the company quickly entered sectors such as baking, tea drinks, coffee, and Western fast food, providing customers with customized cheese ingredients and opening up growth space in the trillion-level foodservice market.

Product innovation and R&D investment have been increased in parallel, injecting momentum into long-term development. In 2025, the company’s R&D investment was RMB 50.756 million. Multiple R&D achievements won industry awards, and innovative outcomes such as the “key technologies for mousse cheese” have driven the continuous upgrading of product strength. At the same time, the company has accelerated the substitution of domestically sourced raw materials and auxiliary materials. Relying on Yili’s upstream dairy sourcing advantages, it effectively reduces costs and further enhances its market competitiveness.

In January 2026, Yili LanDuo completed major management adjustments: the founder Cai Qiu stepped down as general manager, and Cao Yulong from the Yili side took over, marking the company’s official entry into the “Yili Era.” This adjustment not only optimized the company’s governance structure, but also will fully unlock Yili’s synergistic advantages in areas such as the supply chain, channels, and funding, providing solid support for the company’s development.

As the controlling shareholder, Yili has continued to inject resources and vitality into Yili LanDuo. In 2021, Yili injected RMB 3 billion of funding into Yili LanDuo through a rights issue to address capacity bottlenecks. In 2024, Yili LanDuo completed the acquisition of Yili’s cheese business, completely eliminating intra-industry competition and enabling integration of a multi-brand matrix. With Yili’s full-dimensional empowerment, Yili LanDuo has achieved a qualitative leap in aspects such as dairy sourcing supply, cost control, and channel expansion, laying the foundation for escaping price wars and improving profitability.

Although the company faces historical legacy issues such as arbitration disputes related to the founder, it is expected that the confirmed fair value change loss will reduce the company’s 2025 net profit attributable to shareholders by approximately RMB 119–127 million. However, the company has clearly stated that it will not cause net profit to turn from positive to negative, and that this matter is a one-off non-recurring profit and loss item, which does not affect the good development of its main business. As the issues are gradually resolved, the company will move forward with a lighter load, focusing on main-business development.

At present, China’s cheese market is shifting from “quantity-driven competition” to “quality improvement within existing volume.” The price war is gradually subsiding, and industry competition is increasingly focused on a comprehensive comparison of product strength, channel strength, and brand strength. With its first-mover advantages, scale effects, and end-to-end industry-chain layout, Yili LanDuo continues to strengthen its leading position during industry reshuffling.

In terms of the competitive landscape, although foreign brands have traditional advantages in original cheesemaking, due to factors such as rising costs and insufficient channel deepening, their market share is gradually being squeezed by domestic leading players. Domestic dairy companies such as Yili and Mengniu are accelerating their cheese category layout, but in terms of category professionalism and market penetration in cheese, they still lag behind Yili LanDuo. Against this backdrop, Yili LanDuo, with a market share of over 38%, has formed a head advantage that is difficult to dislodge.

Looking long term, China’s cheese market penetration rate is still at a low level, leaving ample room for growth. As residents’ health awareness increases, family consumption scenarios expand, and the industrialization of foodservice advances, the cheese market is expected to keep expanding. It is expected that by 2030, the market size will exceed one trillion yuan. As an industry leader, Yili LanDuo will fully benefit from the dual dividends of market expansion and increased industry concentration.

The rebound in performance in 2025 indicates that Yili LanDuo has successfully emerged from the shadow of the price war and entered a new stage of high-quality growth. Driven by the dual forces of Yili’s deep empowerment and strategic upgrades, the company, through a dual-engine model of C-side and B-side driving, expansion of its product matrix, and optimization of expense efficiency, achieved a remarkable transformation from “scale expansion” to “value growth.” Although in the short term it still faces challenges such as management adjustments and historical legacy issues, over the long term, as the absolute leader in China’s cheese segment, the company’s solid market position, strong profitability, and clear strategic layout make its development prospects worth anticipating. As the industry’s competitive landscape continues to improve, Yili LanDuo is expected to continue leading the way in the trillion-yuan cheese market, writing a new growth legend for China’s dairy sub-segment.