YILI(SH:600887) Di Yi Cai Jing·2025-10-31 08:00Core Viewpoint - The dairy industry is facing challenges due to declining liquid milk sales, necessitating diversification and deep processing to drive growth [1][2]. Financial Performance - In the first three quarters, Yili achieved total revenue of 90.56 billion yuan, a year-on-year increase of 1.7%, while net profit attributable to shareholders was 10.43 billion yuan, a decrease of 4.1% [2]. - In Q3 alone, Yili's revenue was 28.63 billion yuan, down 1.7% year-on-year, with net profit of 3.23 billion yuan, a decline of 3.4% [2]. - Liquid milk revenue for Yili in Q3 was 18.81 billion yuan, down approximately 8.7% year-on-year, and for the first three quarters, it totaled 54.94 billion yuan, a decrease of 4.5% [2][4]. Market Dynamics - The liquid milk segment continues to struggle, influenced by weak market demand and increased competition, alongside the impact of non-packaged milk alternatives like ready-to-drink tea and coffee [2][4]. - Despite the challenges in liquid milk, some segments like dairy beverages and low-temperature fresh milk are still experiencing growth [4]. Growth Opportunities - The growth for dairy companies is increasingly coming from deep processing sectors, with Yili's milk powder and dairy products generating 7.68 billion yuan in Q3, a year-on-year increase of 12.6% [5]. - High-value dairy products such as cream, cheese, and butter have seen over 20% growth in B2B raw material products [5]. - The adult nutrition segment is also showing double-digit growth, with plans for product upgrades to meet diverse consumer needs [5]. Industry Trends - Companies like Mengniu and China Feihe are accelerating their focus on all-age nutrition, indicating a shift in consumer demand from basic supplementation to more tailored nutritional solutions [6]. - The competition in the dairy market is evolving from quality to functionality, requiring companies to enhance their innovation capabilities and technical reserves [6]. - The impact of the baby boom in 2024 on the milk powder market is expected to diminish, with a cooling trend observed in the infant formula sector [6].