YILI(600887) 西南证券·2024-11-05 11:17Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - Q3 revenue showed improvement compared to previous quarters, with a year-on-year decline narrowing to 6.7% [1] - The company's net profit attributable to the parent company grew by 15.9% year-on-year in the first three quarters, reaching 108.7 billion yuan [1] - The company's profitability improved in Q3, with a net profit margin of 12.3%, up 2.6 percentage points year-on-year [3] - The company has initiated a share buyback program, repurchasing 7.6 billion yuan worth of shares as of October 2024, demonstrating confidence in future development [3] Financial Performance - Total operating revenue for the first three quarters of 2024 was 890 billion yuan, a year-on-year decrease of 8.6% [1] - Q3 operating revenue was 291 billion yuan, down 6.7% year-on-year [1] - Gross profit margin for the first three quarters was 34.8%, an increase of 1.9 percentage points year-on-year [3] - Sales expense ratio increased by 1.6 percentage points to 19.3% in the first three quarters [3] Product and Regional Breakdown - Liquid milk revenue was 575 billion yuan in the first three quarters, down 12.1% year-on-year, but showed improvement quarter by quarter [2] - Milk powder and dairy products revenue grew by 7.1% year-on-year to 213 billion yuan, with infant formula achieving high single-digit growth [2] - Ice cream products revenue decreased by 19.6% to 83 billion yuan, but channel inventory remained healthy [2] - Revenue from North China region was 247 billion yuan, down 6.3% year-on-year, showing relatively better performance compared to other regions [2] Future Projections - The report forecasts net profit attributable to the parent company of 121 billion yuan for 2024, 114 billion yuan for 2025, and 121 billion yuan for 2026 [4] - EPS is projected to be 1.90 yuan in 2024, 1.79 yuan in 2025, and 1.91 yuan in 2026 [4] - The company's PE ratio is expected to be 15x in 2024, 16x in 2025, and 15x in 2026 [4] Industry Context - The report highlights the adjustment of upstream production capacity and the expectation of a new balance in raw milk prices [4] - The company's market share in room-temperature white milk continues to increase, while low-temperature liquid milk shows growth against the trend [2]