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Yili (600887): High-income cities share continues to increase, strategy is optimistic, maintain Buy rating

Yili (600887): High-income cities share continues to increase, strategy is optimistic, maintain Buy rating

Investment Highlights: Event: The company released the 2019 first quarter report and achieved 230 operating income.

77 ppm, an increase of 17 in ten years.

89%, net profit attributable to mothers22.

76 ppm, a ten-year increase of 8.

36%; net profit after deduction of non-return to mother 21.

82 ppm, an increase of 9 in ten years.


  Investment Ratings and Estimates: Maintain the 910 revenue forecast for 19-21.

3, 1028.


200 million, an increase of 14 each year.

4%, 12.

9%, 8.

8%; Maintain the net profit forecast for mothers for 19-21 years 71.

6, 80.

5, 87.

9 trillion, an increase of 11 each year.

2%, 12.

5%, 9.

2%, corresponding EPS is 1.

18, 1.

32, 1.

45 yuan, the latest closing price corresponding to PE in 2019-20 is 26, 23 times, maintain BUY rating.

We are optimistic about Yili’s core logic: 1) The company has strong channel and product capabilities, has industry-leading channel layout in the low-tier market, and actively promotes the upgrade of product structure. It is expected to maintain revenue through innovative fission and continuous sinking of high-end products in the future.The rapid growth of the company and the steady increase of its share; 2) The company achieved strong control over the upstream by reaching comprehensive and in-depth strategic cooperation with upstream large and medium-sized ranches, and prospective layout of overseas raw material bases, and the acquisition of sufficient high-quality milk sources for the steady growth of revenueIncreased the basis for savings; 3) Against the background of raw milk shifting from oversupply to tight supply and demand, it is expected that the raw milk supply gap will continue to widen in 1919, milk prices will accelerate, industry promotions will slow down, and competition patterns will improve. Yili as an industryLeading facilitators benefit from the marginal improvement of profitability.

  Revenue continued to grow rapidly, and the performance of high-end products exceeded expectations: 19Q1 company’s operating income increased by 17.

89%, which is basically the same as the previous month. In order to avoid the impact of the Spring Festival dislocation, comprehensively, in the two quarters of 18Q4 and 19Q1, the alternating growth rate of the sum of income was 17.

74%, continued to maintain a high level of more than 15%.

From the perspective of product structure, the performance of high-end products is very eye-catching, and has become an important driving force for the company’s revenue growth. The two key products of Amex and Jindian are expected to achieve rapid growth of more than 20%.

The cash received by the company in 1Q1 for selling goods and providing services was 242.

77 ppm, an increase of 17 in ten years.

13%, which basically matches the growth of income.

According to Nielsen data, 19Q1 Yili’s room temperature, low temperature, infant milk powder market share was 38.

8%, 15.

7%, 6.

3%, +3 each year.

0, -1.

3, +0.

At 5 points, the rapid improvement of room temperature dairy products fully demonstrated the company’s comprehensive competitive advantage.We continue to be optimistic that the company will continue to achieve share harvesting through its leading edge in low-line market channel layout and continuous innovation and fission of key products, and the initial budget revenue target will be exceeded.

  The gross sales gap in Q1 was basically flat, and the optimization of product structure and weakening of purchase and promotion helped the gross profit margin to increase steadily: 19Q1 company’s net sales margin.

8%, a slight decrease of 0 every year.

At 79pct, the gross sales gap was basically stable, mainly due to the slight increase in management and R & D expense ratios.

1Q1 company sales gross margin of 39.

97%, increase by 1 every year.

27pct, mainly due to the contribution of high-end products to increase the proportion of raw milk supply and demand due to the weakening of the promotion of buying gifts; sales expense ratio of 24.

07%, increase by 1 every year.

3pct, it is estimated that the cost of air and ground expenses has increased. Considering the company’s continued expenditure in new businesses and new markets this year, it is expected that the sales expense ratio will remain relatively stable; gross sales difference in 19Q115.

9%, basically basically the same, an increase of nearly 2pct month on month, indicating that the company’s overall promotion efforts continue to narrow, and profitability is expected to improve accordingly.

  The changes in working capital were mainly point-in-time changes. We continued to pay attention to the industry competition pattern brought by cost growth and the improvement in profitability of dairy companies: the company’s balance of advance receipts at the end of 19Q1 was 29.

580,000 yuan, a decrease of 32 深圳桑拿网 from the beginning of the year.

8%, mainly because the initial period is the Spring Festival peak season preparation period, the dealer interrupted the advance payment interrupted, the first quarter of the concentrated delivery of the balance of the balance of the advance payment fell; the balance of advance payment was 21.

9.6 billion, an increase of 50 from the beginning of the year.

43%, mainly due to the increase in advance payments for raw material purchases and advertising expenses, which were more affected by timing factors.

  Looking forward to the future, we continue to be optimistic about the background of raw milk changing from oversupply to tight supply and demand, and the price will accelerate its growth, which will promote the slowdown of downstream promotions and improve the competitive landscape.The 上海夜网论坛 advantage will accelerate the realization of expected share grabbing, while profitability is also expected to benefit from slowing industry competition to achieve marginal improvement.

  Catalyst for gradual growth: core products grow faster than expected, market competition improves faster than expected core assumptions risks: raw material costs grow too fast, and market competition patterns deteriorate further