YILI(SH:600887) CSC SECURITIES (HK) LTD·2025-04-30 06:19Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside in the stock price [4][10]. Core Insights - The company reported a revenue of RMB 115.78 billion for 2024, a year-on-year decline of 8.2%, with a net profit attributable to shareholders of RMB 8.45 billion, down 19% [5]. - In Q1 2025, the company achieved a revenue of RMB 33.02 billion, a year-on-year increase of 1.4%, with a net profit of RMB 4.87 billion, down 17.7% [5]. - The company plans to distribute a cash dividend of RMB 12.2 per 10 shares, resulting in a dividend yield of approximately 4.24% [5]. Revenue Breakdown - The product mix includes liquid milk (59.98%), milk powder and dairy products (26.92%), and frozen products (12.54%) [2]. - In Q4 2024, liquid milk revenue was RMB 17.48 billion, down 13% year-on-year, while milk powder and dairy products revenue increased by 8.7% to RMB 8.35 billion [6]. Cost and Profitability - The gross margin in Q4 2024 decreased by 0.7 percentage points to 31%, primarily due to changes in product mix [6]. - The company reported a significant impairment loss of RMB 30.4 billion related to goodwill, impacting overall profitability [6]. Future Projections - The company is expected to achieve net profits of RMB 10.71 billion, RMB 12.18 billion, and RMB 13.40 billion for the years 2025, 2026, and 2027, respectively, with year-on-year growth rates of 26.7%, 13.8%, and 10% [8]. - The earnings per share (EPS) for the same years are projected to be RMB 1.68, RMB 1.91, and RMB 2.11, with corresponding price-to-earnings (P/E) ratios of 17x, 15x, and 14x [8].