Summary of Yili Industrial (600887.SS) Conference Call Company Overview - **Company**: Yili Industrial - **Stock Code**: 600887.SS - **Date of Call**: 13 February 2025 Key Highlights Industry and Market Updates 1. **Lunar New Year (LNY) Sales**: Yili's retail sales during LNY showed stable year-over-year (yoy) performance, aligning with expectations despite a high base from the previous year. This stability is attributed to healthy channel inventory levels, proactive promotional actions, and stable pricing with less promotion compared to the previous year [1][2] 2. **2025 Demand Outlook**: Management maintains a cautious outlook for 2025, expecting steady sales in the liquid milk segment and positive growth in the infant milk formula (IMF) segment, targeting a 2 percentage point market share gain per annum [1][2] 3. **Channel Inventory**: The company reported a healthy channel inventory level, which is expected to support a potential recovery in sell-in trends for liquid milk [1] Financial Performance and Projections 1. **Margin Targets**: Yili reiterated its target of a 9% net profit margin (NPM) for 2025, driven by lower selling expense ratios and reduced raw milk inventory impairment losses. The company anticipates stabilization in raw milk prices in the first half of 2025, with potential improvements in the second half [1][11] 2. **Shareholder Returns**: The management confirmed that the 2024 dividend per share (DPS) will not be lower than that of 2023, implying a minimum dividend yield of 4.4% for 2024. Additionally, a share buyback program of up to RMB 2 billion is planned, indicating a total shareholder return of at least 5.6% [1] Product and Segment Insights 1. **Liquid Milk Segment**: The company expects stable sales in the liquid milk category, supported by healthy inventory levels and rational promotions. New product development and strategic channel introductions are planned for the second half of 2024 [1][13] 2. **Infant Milk Formula (IMF)**: Yili aims for a 2 percentage point market share gain in the IMF segment, building on a solid performance in 2024 [1][13] 3. **Non-Dairy Business**: Although a small contributor, Yili's freshly brewed tea segment showed strong growth, with plans for increased channel penetration in 2025 [1][13] Risks and Challenges 1. **Market Risks**: Key risks include slower-than-expected demand for premium liquid milk, a slower recovery in dairy demand, and intensified competition within the industry [14] Financial Metrics - **Market Capitalization**: RMB 173.7 billion / $23.8 billion - **Revenue Projections**: Expected revenue for 2025 is RMB 120.5 billion, with a projected EBITDA of RMB 16.67 billion [15] Conclusion Yili Industrial is positioned for cautious growth in 2025, with stable sales expectations across its key segments and a focus on maintaining shareholder returns. The company is actively managing its inventory and promotional strategies to align with market conditions while navigating potential risks in the competitive landscape.

1 THE 2024 Association Community Benchmark Report CONTENTS | --- | --- | |------------------------------------------------------------|-------| | | | | Introduction . | | | TLDR Summary . | | | Definitions | | | Benchmark Data . | | | Community Engagement | | | Users, Logins, and Contributors | | | Community Digest Open Rate | | | Monthly Discussion Activity. | | | Community Resource Libraries . | | | Community Engagement Trends | | | Comparisons | | | Community Size vs. Community Engagement | | | Community ...