YILI(SH:600887) HTSC·2025-08-29 07:07Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 36.25 [6][7]. Core Insights - The company demonstrated strong profit performance with a total revenue of RMB 61.93 billion and a net profit attributable to the parent company of RMB 7.2 billion for the first half of 2025, reflecting a year-on-year increase of 3.4% in revenue but a decrease of 4.4% in net profit [1][2]. - The liquid milk business showed stability despite a 2.1% decline in revenue, while the milk powder and dairy products segment grew by 14.3%, indicating competitive strength in the industry [1][2]. - The company effectively managed inventory levels, positioning itself well for the upcoming peak sales periods during the Mid-Autumn Festival and National Day [1][2]. Summary by Sections Financial Performance - For the first half of 2025, the company reported total revenues of RMB 61.93 billion, with a net profit of RMB 7.2 billion, and a non-recurring net profit of RMB 7.02 billion, showing a year-on-year change of +3.4%, -4.4%, and +31.8% respectively [1]. - The gross profit margin improved by 1.3 percentage points to 36.0% in the first half of 2025, driven by a higher proportion of revenue from high-margin milk powder and dairy products [3]. Business Segments - The liquid milk segment generated RMB 36.13 billion in revenue, down 2.1% year-on-year, while the milk powder and dairy products segment achieved RMB 16.58 billion, up 14.3% [2]. - The cold drink business showed recovery with a 12.4% increase in revenue for the first half of 2025, indicating a positive trend following previous channel adjustments [2]. Profitability and Forecast - The report anticipates a slight adjustment in revenue forecasts for 2025-2027, projecting revenues of RMB 119.32 billion, RMB 123.52 billion, and RMB 127.39 billion respectively, reflecting a minor decrease from previous estimates [4]. - The expected earnings per share (EPS) for 2025-2027 are projected at RMB 1.81, RMB 1.99, and RMB 2.14, with a reference price-to-earnings (PE) ratio of 20x for 2025 [4].