YILI(SH:600887) EBSCN·2024-09-05 06:03Investment Rating - The report maintains a "Buy" rating for Yili Co., Ltd. (600887.SH) [2][4] Core Views - Yili Co., Ltd. reported a 9.49% year-on-year decline in revenue for H1 2024, totaling 59.915 billion yuan, while net profit increased by 19.44% to 7.531 billion yuan [2] - The company is adjusting its sales strategy for long-life liquid milk, while low-temperature products are experiencing growth [2] - The forecast for net profit for 2024-2026 has been revised downwards due to expected slow recovery in terminal sales [2] Summary by Sections Financial Performance - H1 2024 revenue was 599.15 billion yuan, down 9.49% year-on-year; net profit was 75.31 billion yuan, up 19.44% [2] - Q2 2024 revenue was 273.38 billion yuan, down 16.54% year-on-year; net profit was 16.08 billion yuan, down 40.21% [2] - Liquid milk revenue for H1 2024 was 368.87 billion yuan, down 13.05% year-on-year [2] - Revenue from milk powder and dairy products increased by 7.31% in H1 2024 [2] Cost and Margin Analysis - H1 2024 gross margin was 35.02%, with a slight increase due to falling raw milk prices [2] - Sales expense ratio increased to 19.41% in H1 2024, attributed to marketing costs during channel adjustments [2] - Net profit margin for H1 2024 was 12.57%, down from the previous year [2] Future Outlook - The company expects to stabilize operations in H2 2024, with potential recovery in profitability as channel adjustments are completed [2] - Revised net profit forecasts for 2024-2026 are 11.597 billion yuan, 11.506 billion yuan, and 12.313 billion yuan respectively [2] - The current stock price corresponds to a P/E ratio of 12 for 2024, indicating a favorable valuation for a leading dairy company [2][3]