YILI(SH:600887) Guotou Securities·2025-09-19 05:11Investment Rating - The investment rating for the company is "Buy-A" with a target price of 34.71 CNY over the next six months [5][9]. Core Insights - The company reported a revenue of 61.777 billion CNY for H1 2025, a year-on-year increase of 3.49%, while the net profit attributable to shareholders was 7.200 billion CNY, a decrease of 4.39%. However, the net profit excluding non-recurring items increased by 31.78% to 7.016 billion CNY [1]. - The growth in the milk powder and cold drink segments has led to improved profit margins, with a gross margin of 34.19% in Q2 2025, an increase of 0.61 percentage points year-on-year [3]. Revenue Breakdown - For H1 2025, revenue from liquid milk, milk powder and dairy products, cold drinks, and other products was 36.13 billion CNY, 16.58 billion CNY, 8.23 billion CNY, and 390 million CNY, respectively, with year-on-year changes of -2.1%, +14.3%, +12.4%, and -5.1% [2]. - The company launched high-end organic products such as "Golden Crown" and "Toffee" which contributed to double-digit growth in the milk powder segment. The cold drink segment benefited from new products and collaborations with membership and snack stores [2]. Channel and Regional Performance - Revenue from distribution and direct sales channels for H1 2025 was 59.35 billion CNY and 1.96 billion CNY, respectively, showing year-on-year growth of 3.3% and 17.3% [2]. - Revenue by region for H1 2025 was 17.14 billion CNY in North China, 15.08 billion CNY in South China, 11.36 billion CNY in Central China, 9.06 billion CNY in East China, and 8.68 billion CNY in other regions, with year-on-year changes of +2.0%, +2.5%, +3.3%, -0.2%, and +15.1% [2]. Profitability Metrics - The company's net profit margin for H1 2025 was 11.63%, a decrease of 0.94 percentage points year-on-year, while the net profit margin for Q2 2025 was 8.05%, an increase of 2.16 percentage points year-on-year [3]. - The company aims to expand high-margin businesses such as milk powder and cold drinks, focusing on product innovation and digital marketing strategies [3]. Financial Projections - Revenue growth is projected at 3.4%, 3.9%, and 3.9% for 2025, 2026, and 2027, respectively, while net profit growth is expected to be 32.8%, 10.2%, and 5.6% for the same years [4].