YILI(SH:600887) China Post Securities·2025-09-02 03:11Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative increase in stock price of over 20% compared to the benchmark index within six months [8][9]. Core Insights - The company reported a slight revenue and profit increase in the first half of 2025, with total revenue of 617.77 billion yuan, a year-on-year increase of 3.49%, while net profit decreased by 4.39% to 72 billion yuan. However, excluding asset disposal gains from the previous year, profit growth would be approximately 39% [3][4]. - The liquid milk segment has stabilized, and the company is expected to perform better than the overall industry in the second half of 2025, driven by product structure improvements and cost advantages [9]. Financial Performance Summary - For the first half of 2025, the company achieved a gross margin of 36.05% and a net profit margin of 11.63%, with sales expense ratio decreasing by 1.11 percentage points [3]. - In Q2 2025, the company reported revenue of 289.15 billion yuan, a year-on-year increase of 5.77%, and net profit of 23.26 billion yuan, up 44.65% [4]. - The revenue breakdown for H1 2025 shows liquid milk at 361.26 billion yuan, down 2.06%, while milk powder and dairy products increased by 14.26% to 165.78 billion yuan [5]. Market Position and Strategy - The company holds the largest market share in the liquid milk sector, with significant growth in both offline and online retail channels. The infant formula segment also saw a market share increase to 18.1% [6]. - The company has initiated a 1.6 billion yuan fertility subsidy plan to support the creation of a "fertility-friendly society," reflecting its commitment to social responsibility [6]. Earnings Forecast - The company is projected to achieve revenues of 1203.11 billion yuan, 1261.73 billion yuan, and 1331.61 billion yuan for 2025, 2026, and 2027 respectively, with corresponding net profits of 115 billion yuan, 128.2 billion yuan, and 140.69 billion yuan [9][11].