YILI(SH:600887) Ping An Securities·2025-04-30 07:55Investment Rating - The report maintains a "Recommended" investment rating for Yili Co., Ltd. (600887.SH) with a current stock price of 28.79 yuan [1]. Core Insights - The company reported a total revenue of 115.39 billion yuan for 2024, a decrease of 8.24% year-on-year, and a net profit of 8.45 billion yuan, down 18.94% year-on-year. The first quarter of 2025 showed a revenue of 32.94 billion yuan, an increase of 1.46% year-on-year, while net profit decreased by 17.71% year-on-year to 4.87 billion yuan [3][4]. - The report highlights that the liquid milk segment remains the market leader despite a revenue decline of 12.32% to 75.00 billion yuan. The milk powder segment saw a revenue increase of 7.53% to 29.68 billion yuan, driven by innovation in infant nutrition products [6][7]. - The financial outlook suggests a gradual recovery in revenue as consumer demand improves, with projected net profits for 2025-2027 being 10.74 billion yuan, 11.64 billion yuan, and 12.71 billion yuan respectively [7][9]. Financial Summary - Revenue and Profit Trends: - 2024 revenue: 115.39 billion yuan, 2025E: 119.20 billion yuan, 2026E: 124.21 billion yuan, 2027E: 129.80 billion yuan [5]. - 2024 net profit: 8.45 billion yuan, 2025E: 10.74 billion yuan, 2026E: 11.64 billion yuan, 2027E: 12.71 billion yuan [5]. - Profitability Ratios: - Gross margin for 2024 is projected at 33.88%, with a net margin of 7.3% [6][7]. - Valuation Metrics: - The price-to-earnings (P/E) ratio is expected to be 21.7 for 2024, decreasing to 14.4 by 2027 [5][9]. Market Position - Yili maintains a strong market position in the liquid milk sector, holding the largest market share despite recent revenue declines. The company is also a leader in the adult milk powder market with a 24% market share [6][7]. Regional Performance - Revenue by region shows a decline across all areas, with North China leading at 32.19 billion yuan, down 5.15% year-on-year. South China and Central China also experienced declines of 9.81% and 13.46% respectively [6]. Cash Flow and Financial Health - The cash flow from operating activities for 2024 is projected at 21.59 billion yuan, with a net increase in cash of -18.41 billion yuan due to significant investment outflows [9]. - The total assets for 2024 are estimated at 153.72 billion yuan, with a debt-to-asset ratio of 62.9% [8].