YILI(SH:600887) Tebon Securities·2024-10-24 10:03Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [1]. Core Views - The company has established itself as a leading player in the dairy industry, with a comprehensive development strategy and a strong management team that has made sound decisions over the years [2][3]. - The dairy market in China is entering a mature phase, with opportunities for growth in high-end products and a focus on premiumization [2][3]. - The company is well-positioned to capitalize on the growing demand for dairy products, particularly in liquid milk and infant formula segments, where it holds leading market shares [2][3]. Summary by Sections Company Overview - The company has over 60 years of history, evolving from a single ice cream producer to a comprehensive dairy enterprise with a full range of dairy products [2][3]. - It has maintained a strong market position, with leading shares in liquid milk, infant formula, adult milk powder, and ice cream segments [2][3]. Industry Development - The overall dairy industry in China is maturing, with a trend towards domestic production and premiumization of products [2][3]. - The liquid milk consumption is stabilizing, but there remains growth potential driven by rising consumer purchasing power and market penetration in lower-tier cities [2][3]. Competitive Advantages - The company controls its milk supply chain and has a robust distribution network, which helps mitigate cost fluctuations and enhances market penetration [3]. - It has successfully developed high-profile products like the "安慕希" yogurt and "金典" organic milk, which have gained significant brand recognition [3]. Financial Performance - The company has shown steady revenue growth, with projections indicating revenues of 1215.9 billion, 1268.5 billion, and 1310.5 billion yuan for 2024, 2025, and 2026 respectively, reflecting year-on-year growth rates of 3.6%, 4.3%, and 3.3% [3][4]. - The net profit is expected to reach 118.6 billion, 112.6 billion, and 120.6 billion yuan for the same years, with growth rates of 13.7%, -5.0%, and 7.1% respectively [3][4].