YILI(SH:600887) Changjiang Securities·2024-09-09 06:09Investment Rating - The investment rating for Yili Co., Ltd. is "Buy" and is maintained [5] Core Views - The company's total revenue for H1 2024 was 59.915 billion yuan, a year-on-year decrease of 9.49%, while the net profit attributable to shareholders was 7.531 billion yuan, an increase of 19.44%. The net profit excluding non-recurring items was 5.324 billion yuan, down 12.81% year-on-year [6][7] - The liquid milk segment is under pressure due to intensified competition, while the milk powder segment has shown a significant increase. The revenue from liquid milk in H1 2024 was 36.887 billion yuan, down 13.05% year-on-year, while milk powder and dairy products revenue was 14.509 billion yuan, up 7.31% year-on-year [6][7] - Marketing expenditures have increased, and while costs have decreased, expenses have risen, leading to a heavier burden on profitability. The net profit margin for H1 2024 increased by 3.04 percentage points to 12.57%, while the gross profit margin rose by 1.65 percentage points to 35.02% [7] - The company aims for a stable growth target in 2024, with total revenue projected at 130 billion yuan and total profit at 14.7 billion yuan. The dividend payout ratio is expected to continue to rise, with a cash dividend of 7.639 billion yuan for 2023, corresponding to a current dividend yield of 5.39% [7] Summary by Sections Financial Performance - In H1 2024, total revenue was 59.915 billion yuan, a decrease of 9.49% year-on-year. The net profit attributable to shareholders was 7.531 billion yuan, an increase of 19.44%, while the net profit excluding non-recurring items was 5.324 billion yuan, down 12.81% year-on-year [6][7] - For Q2 2024, total revenue was 27.338 billion yuan, down 16.54% year-on-year, with a net profit of 1.608 billion yuan, down 40.21% year-on-year [6][7] Product Performance - Liquid milk revenue in H1 2024 was 36.887 billion yuan, down 13.05% year-on-year, while milk powder and dairy products revenue was 14.509 billion yuan, up 7.31% year-on-year. The cold drink segment saw a revenue decline of 20.04% [6][7] - The company maintained its leading market share in liquid milk despite the competitive environment, while milk powder experienced double-digit growth due to a low base effect [7] Cost and Profitability - The net profit margin for H1 2024 increased to 12.57%, while the gross profit margin rose to 35.02%. However, the net profit margin for Q2 2024 decreased to 5.88% due to increased marketing expenditures and credit impairment losses [7] - The company reported a capital expenditure of 1.922 billion yuan in H1 2024, down from 3.155 billion yuan in the same period last year, indicating a more stable capital expenditure approach [7]