YILI(600887) 东方证券·2024-11-08 06:10Investment Rating - The report assigns a "Buy" rating for the company, with a target price of 42.21 CNY based on a 21x P/E ratio for 2024 [2][3]. Core Insights - The company has established a strong position in the dairy industry through diversified product offerings and a focus on operational excellence. The dual-leader market structure in liquid milk has stabilized, enhancing revenue growth potential [1][12]. - The company aims for a net profit margin of at least 9% by 2025, reflecting its commitment to profitability amidst a challenging consumption environment [1][18]. - The report highlights the company's high dividend yield of 4.2% and a commitment to a payout ratio of at least 70% in 2024, indicating its attractiveness as a low-valuation, high-dividend stock [1][2]. Summary by Sections Section 1: Company Overview and Competitive Advantage - The company has transitioned from a broad management model to a more refined approach, enhancing its profitability focus. It has diversified its product range beyond liquid milk to include ice cream, milk powder, and cheese, solidifying its market leadership [1][12]. - The management's commitment to long-term growth is reflected in the high shareholding of executives and the implementation of multiple stock incentive plans [1][24]. Section 2: Revenue Growth and Market Dynamics - The company anticipates a recovery in revenue growth due to low inventory levels and supportive policies. The liquid milk segment remains essential, with fresh milk growth outpacing traditional white milk [1][12]. - The company has seen improvements in sales performance, particularly in milk powder and ice cream, with significant growth in overseas markets [1][12]. Section 3: Profitability and Market Conditions - The report suggests that the company will benefit from upstream capacity reductions, leading to a potential balance in raw milk supply and demand by 2025. This could enhance the company's operating profit margins as milk prices recover [1][12]. - The company's current P/E ratio of 15x is considered low compared to historical and peer benchmarks, providing a safety margin for investors [1][2]. Section 4: Financial Projections - The company is projected to achieve earnings per share of 2.01 CNY, 1.79 CNY, and 1.88 CNY for the years 2024, 2025, and 2026, respectively. The revenue forecast indicates a slight decline in 2024, followed by a recovery in subsequent years [2][3].