YILI(SH:600887) Xin Lang Cai Jing·2025-08-29 06:31Core Viewpoint - The company reported better-than-expected performance in Q2 2025, with revenue and net profit showing significant year-on-year growth, driven by strong performance in milk powder and cold drink segments despite challenges in liquid milk demand [1][5]. Financial Performance - In Q2 2025, the company achieved revenue of 289.15 billion, a year-on-year increase of 5.77%, and net profit of 23.26 billion, up 44.65% year-on-year [2][5]. - For the first half of 2025, total revenue reached 619.33 billion, reflecting a 3.37% increase, while net profit was 72.00 billion, down 4.39% year-on-year [2]. - The company's cash flow from operating activities decreased by 44.34% year-on-year in H1 2025, primarily due to a decline in advance payments from distributors [2]. Product Performance - The performance of various product lines in H1 2025 showed mixed results: liquid milk down 2.06%, milk powder up 14.26%, cold drinks up 12.39%, and other products down 5.05% [3]. - The market share for infant milk powder increased by 1.3 percentage points to 18.1%, making it the leading retail share in the country [3]. Profitability and Margins - The overall gross margin improved to 34.37% in Q2 2025, an increase of 0.53 percentage points year-on-year, while the net profit margin rose to 8.05%, up 2.17 percentage points [4]. - The company experienced a significant reduction in credit and asset impairment losses, contributing to improved profit elasticity [4]. Outlook - The company anticipates continued demand recovery in the second half of 2025, particularly during the Mid-Autumn Festival and National Day holidays, with expectations for overall improvement in the dairy product industry [4]. - The company projects earnings per share (EPS) of 1.8 yuan, 2.0 yuan, and 2.2 yuan for 2025 to 2027, respectively, with a valuation of 15 times for 2025 [5].