YILI(SH:600887) Huaan Securities·2024-10-31 10:31Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The report highlights that channel adjustments are showing initial positive effects, with Q3 revenue of 29.04 billion yuan (down 6.7%) and a net profit attributable to shareholders of 3.34 billion yuan (up 8.5%) [1] - The revenue for the first three quarters is reported at 88.73 billion yuan (down 8.6%), while the net profit attributable to shareholders is 10.87 billion yuan (up 15.9%) [1] - The report indicates that the revenue meets expectations while profits exceed market forecasts [1] Revenue Analysis - The revenue performance by product in Q3 shows liquid milk down 10.3%, milk powder up 6.6%, and cold drinks down 16.6% [1] - After inventory digestion in Q2, the decline in liquid milk revenue has narrowed to 10.3% in Q3 from 19.6% in Q2, indicating a recovery in inventory [1] - The market share for milk powder continues to show an upward trend [1] Profitability Analysis - The gross margin in Q3 increased by 2.5 percentage points to 35.1%, attributed to lower raw milk costs and reduced discounts [1] - The report notes that selling, general, and administrative expenses have increased by 1.1 percentage points, while research and development and financial expense ratios have decreased [1] - The effective tax rate decreased by 2.2 percentage points to 11.3%, contributing to a net profit margin increase of 1.6 percentage points to 11.5% [1] Investment Recommendations - The report maintains a "Buy" recommendation, anticipating continued improvement in Q4 due to healthy inventory levels and preparations for the Spring Festival [1] - The company is expected to recover revenue growth in 2025, with long-term net profit margins remaining in an upward trend [1] - Revenue forecasts for 2024-2026 are adjusted to 117.4 billion, 123.0 billion, and 128.2 billion yuan respectively, with corresponding net profit forecasts of 12.0 billion, 11.0 billion, and 12.0 billion yuan [1][2]