Zhe Jiang Li Zi Yuan Food Co., Ltd. is a Chinese company engaged in the research, production, and sale of milk-based and other beverages. Its product range includes dairy beverages, dairy products, plant-based protein beverages, compound protein beverages, water-based beverages, fruit and vegetable juice beverages, flavored beverages, and grain-based beverages. Founded in 1994, the company is based in Jinhua, China.
Why is Zhe Jiang Li Zi Yuan Food Co Ltd (605337.CG) moving?
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Liziyuan profit slumps, director probed, but dairy cycle turns up
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Raw milk cycle turning up lifts dairy stocks Milk prices are rising and the national dairy herd keeps shrinking, so investors bet the long dairy downturn is ending. Liziyuan shares jumped to their daily limit in a sector-wide rally. If milk prices keep recovering, demand and pricing for dairy drinks should improve, helping the stock.
This is the main positive force behind the stock's move and explains the sector rally it joined.
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First-half profit down 32% on weak sales and costs Liziyuan's first-half net profit fell 32.3% to 65 million yuan, revenue slipped 2.7%, and second-quarter profit dropped 61.5%. The company blamed lower sales of milk-containing drinks and higher raw material costs. Weak earnings weigh on the stock because the business is still shrinking.
This is the company's own hard result and the clearest negative driver for the share price.
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Big dividend payout cushions weak results Alongside the weak report, Liziyuan plans to pay 1.3 yuan per 10 shares, about 49.8 million yuan, or 76.6% of its profit. Paying out most earnings signals confidence and gives shareholders cash, which supports the stock and softens the blow of falling profit.
It is a concrete shareholder-return action that offsets the negative earnings news.
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Independent director under investigation for serious violations Director Xiao Zuoping, who chairs Liziyuan's audit committee, is being investigated for suspected serious disciplinary and legal violations. He also sits on two other listed boards. The company says the case is unrelated to it and won't hurt operations, but an audit-committee head under probe raises governance worries.
It is the newest event and a governance risk that can pressure the stock despite company reassurances.
Independent director Xiao Zuoping under investigation for suspected serious disciplinary and legal violations; three listed companies issue announcements
Xiao Zuoping, who serves as an independent director of Zhejiang Orient, Eastcompeace, and Liziyuan, is under disciplinary review and supervisory investigation for suspected serious disciplinary and legal violations. The three companies issued announcements on the evening of October 8. Eastcompeace said it recently learned that independent director Xiao Zuoping is suspected of serious disciplinary and legal violations, and based on preliminary understanding, the case does not involve the company. Xiao Zuoping has served as an independent director since July 2023 and is currently an independent director of the eighth board of directors and chairman of the audit committee, among other roles. He does not participate in daily production and operation management, and his inability to perform duties will not have a material adverse impact on the company's production, operations, or standardized governance. The company will select a new independent director as soon as possible. Zhejiang Orient's announcement shows that Xiao Zuoping has served as an independent director since October 2020 and is currently an independent director of the tenth board of directors and chairman of the audit committee, among other roles. Liziyuan said Xiao Zuoping has served as an independent director since July 2024 and is currently an independent director of the fourth board of directors, chairman of the audit committee, and a member of the nomination committee. His inability to perform duties will not have a material impact on the company's operations and management. Public information shows that Xiao Zuoping was born in 1975 and is currently a professor and doctoral supervisor at the School of Accounting of Hangzhou Dianzi University. He previously served as head of the accounting department at Southwest Jiaotong University. On September 30, the Huzhou Municipal Commission for Discipline Inspection and Supervisory Commission website reported that Xiao Zuoping, former deputy party secretary and dean of the School of Accounting at Hangzhou Dianzi University, is suspected of serious disciplinary and legal violations and has voluntarily surrendered. He is currently undergoing disciplinary review by the Hangzhou Dianzi University Commission for Discipline Inspection and supervisory investigation by the Huzhou Municipal Supervisory Commission. In 2025, Xiao Zuoping's pre-tax compensation from Zhejiang Orient, Eastcompeace, and Liziyuan was 150,000 yuan, 80,000 yuan, and 70,000 yuan, respectively.
002017.CS · Regulation · Negative Independent director and audit committee chairman Xiao Zuoping is under investigation for suspected serious disciplinary and legal violations.
600120.CG · Regulation · Negative Independent director Xiao Zuoping, chairman of the audit committee, is under disciplinary review and supervisory investigation for suspected serious violations.
605337.CG · Regulation · Negative Independent director and audit committee chairman Xiao Zuoping is under investigation for suspected serious disciplinary and legal violations.
Liziyuan Independent Director Xiao Zuoping Under Disciplinary Review and Supervisory Investigation
Liziyuan announced that its independent director Xiao Zuoping is currently undergoing disciplinary review and supervisory investigation, and the case involved is unrelated to the company. Xiao Zuoping has served as an independent director of the company since July 2024, is currently an independent director of the fourth board of directors, and serves as chairman of the audit committee and a member of the nomination committee, and does not participate in daily operations and management. The company stated that his inability to perform his duties will not have a material impact on the company's operations, and it will select a new independent director as soon as possible.
605337.CG · Regulation · Neutral Independent director Xiao Zuoping is under disciplinary review and supervisory investigation, though the company says the case is unrelated to it and won't materially affect operations.
Independent Director Xiao Zuoping of Liziyuan Under Investigation; Company Says Case Unrelated to It
Zhejiang Liziyuan Food Co., Ltd. disclosed in an announcement on the evening of October 8 that the company recently learned that independent director Xiao Zuoping is currently undergoing disciplinary review and supervisory investigation. Based on preliminary understanding, the case he is involved in is unrelated to the company. Liziyuan stated that Xiao Zuoping has served as an independent director of the company since July 2024 and is currently an independent director of the company's fourth board of directors, as well as chairman of the board's audit committee and a member of the nomination committee. Apart from this, he holds no other positions in the company and does not participate in daily production, operation, or management. His inability to perform his duties will not have a material impact on the company's operations and management. Other directors and senior management are performing their duties normally, and production and operations remain normal. The company will select a new independent director as soon as possible in accordance with relevant laws, regulations, and the company's articles of association. Financial reports show that in the first half of 2026, Liziyuan achieved operating revenue of 605 million yuan, down 2.69 percent year on year; net profit attributable to shareholders of the listed company was 65.0354 million yuan, down 32.34 percent year on year; and net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was 55.1391 million yuan, down 36.85 percent year on year. The company said the decline in net profit was mainly due to a drop in sales of milk-containing beverages and rising costs of key raw and auxiliary materials during the reporting period.
605337.CG · Regulation · Negative Independent director Xiao Zuoping is under disciplinary review and supervisory investigation, prompting the company to replace him.
605337.CG · Demand · Negative H1 2026 net profit fell 32.34% mainly on a drop in sales of milk-containing beverages.
Liziyuan's 2026 interim net profit was 65.0354 million yuan, down 32.34% year-on-year
Liziyuan released its 2026 interim report, with net profit attributable to the parent company of 65.0354 million yuan, down 32.34% from the same period last year. The company's total operating revenue was 605 million yuan, down 2.69% year-on-year; net cash inflow from operating activities was 13.9416 million yuan, down 82.84% year-on-year. The latest gross margin was 34.75%, down 5.11 percentage points from the same period last year; diluted earnings per share was 0.17 yuan, down 32.00% year-on-year.
Liziyuan plans to distribute a cash dividend of 1.3 yuan per 10 shares
Liziyuan announced that it plans to distribute a cash dividend of 1.3 yuan per 10 shares, before tax, to all shareholders, with an estimated total payout of 49.81 million yuan, accounting for 76.59% of net profit attributable to the parent company. In the first half of 2026, Liziyuan achieved revenue of 605 million yuan and net profit attributable to the parent company of 65.04 million yuan.
Raw milk cycle reversal signals emerge as dairy sector stocks surge
The dairy sector saw a broad rally on July 29, with Huanlejia hitting the 20 percent daily limit, Knight Dairy surging over 18 percent, Pinwo Food and Panda Dairy rising more than 10 percent, and JuneYao Health, Sanyuan Foods, and Liziyuan among multiple stocks hitting their daily limits. A research report from China Securities shows that the dairy cow herd stood at 5.772 million head in June, down 22,000 head month-on-month, maintaining a rapid pace of destocking. Recently, bulk milk prices have risen in many regions, and the interplay of beef and milk prices is driving a positive turn in the raw milk cycle. Kaiyuan Securities notes that from 2024 to 2025, the national dairy cow herd cumulatively destocked about 550,000 head, and by the end of the second quarter of 2026, the Holstein cow herd further declined to 5.794 million head, with the pace of capacity reduction accelerating. At the same time, yield per cow growth is slowing. In the first half of 2026, raw milk output rose 2.4 percent year-on-year, while dairy product output increased 6.0 percent. On the pricing front, bulk milk prices are leading the gains, with contract prices following. Bulk milk purchase prices in major producing areas have risen sharply, with current mainstream prices at 2.8 to 3.1 yuan per kilogram, and in tight supply areas reaching 3.2 to 3.5 yuan per kilogram. Contract milk prices have turned positive year-on-year. On July 24, the fresh milk price in major producing areas was 3.06 yuan per kilogram, up 0.3 percent month-on-month and 1.0 percent year-on-year, with clear bottoming signals. Aijian Securities points out that dairy products represent the clearest direction of improvement in fund holdings in the second quarter. Active equity funds' combined holdings of Yili Group, New Hope Dairy, Youran Dairy, and China Modern Dairy increased by 12.3 percent, 18.7 percent, 17.3 percent, and 17.8 percent quarter-on-quarter, respectively. Kaiyuan Securities believes that supply contraction, price stabilization, and initial profit verification are largely in place, and raw milk reversal signals are gradually emerging. The industry may be transitioning from a left-side bottoming phase to a right-side confirmation phase. The upstream segment will benefit first with significant earnings elasticity, with a focus on Youran Dairy. The downstream competitive environment is improving and leading companies are regaining market share, with attention on New Hope Dairy and Yili Group.
内蒙古骑士乳业集团股份有限公司 (Inner Mongolia Knight Dairy Group Co., Ltd.) · Supply · Positive Dairy cow herd destocking and rising bulk milk prices signal a positive turn in the raw milk cycle, benefiting Knight Dairy as a dairy producer.
002946.CS · Supply · Positive Raw milk supply tightening and rising prices benefit dairy processors like New Hope Dairy.
300892.CS · Supply · Positive Raw milk supply tightening and rising prices benefit dairy companies like Pinlive Foods.
300898.CS · Supply · Positive Raw milk supply tightening and rising prices benefit dairy companies like Panda Dairy.
300997.CS · Supply · Positive Raw milk supply tightening and rising prices benefit dairy companies like Huanlejia.
605388.CG · Supply · Positive Raw milk supply tightening (destocking, herd reduction) and rising bulk milk prices signal positive cycle reversal for dairy companies.
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