YILI(SH:600887) EBSCN·2024-11-04 08:16Investment Rating - The report maintains a "Buy" rating for Yili Co., Ltd. (600887.SH) [5] Core Views - Yili Co., Ltd. reported a revenue of 89.039 billion yuan for the first three quarters of 2024, a year-on-year decrease of 8.59%, while the net profit attributable to shareholders was 10.868 billion yuan, an increase of 15.87% year-on-year [1] - The company has adjusted its sales rhythm for long-life liquid milk, while low-temperature products have shown growth against the trend [2] - The gross margin has improved, indicating a recovery in profitability, driven by a decrease in raw milk prices and the end of channel adjustments [3] - The forecast for net profit in 2024 has been raised to 12.019 billion yuan, reflecting a 3.64% increase from previous estimates [3] Revenue Performance - For Q3 2024, the company achieved a revenue of 29.125 billion yuan, down 6.67% year-on-year, with a net profit of 3.337 billion yuan, up 8.53% year-on-year [1] - Liquid milk revenue in Q3 2024 was 20.637 billion yuan, down 10.31% year-on-year, but the decline has narrowed compared to Q2 2024 [2] - The revenue from milk powder and dairy products in Q3 2024 was 6.821 billion yuan, an increase of 6.56% year-on-year [2] Profitability Metrics - The gross margin for Q1-Q3 2024 was 35.03%, and for Q3 2024 it was 35.05%, reflecting a year-on-year increase of 2.46 percentage points [3] - The net profit margin for Q1-Q3 2024 was 12.21%, while for Q3 2024 it was 11.46%, showing a year-on-year increase of 1.61 percentage points [3] - The company has managed to reduce sales expense ratios, contributing to improved profitability [3] Forecast and Valuation - The earnings per share (EPS) forecast for 2024-2026 is set at 1.89, 1.81, and 1.93 yuan respectively, with corresponding price-to-earnings (P/E) ratios of 15, 16, and 15 times [3] - The company is positioned as a leading player in the dairy industry, with clear long-term advantages [3]