YILI(SH:600887) Huachuang Securities·2025-10-31 06:04Investment Rating - The report maintains a "Strong Buy" rating for Yili Co., Ltd. with a target price of 36 CNY [2][6]. Core Insights - Yili's resilience in operations is highlighted, with a proposed interim dividend that enhances shareholder returns. The company reported a revenue of 90.34 billion CNY for the first three quarters of 2025, a year-on-year increase of 1.81%, while the net profit attributable to shareholders decreased by 4.07% to 10.43 billion CNY. The adjusted net profit increased by 18.73% to 10.10 billion CNY [2][6]. - The report emphasizes the company's strong performance in the milk powder and cold drink segments, which supported revenue despite a decline in liquid milk sales. The company is expected to maintain a net profit margin target of 9% for the year [2][6]. Financial Performance Summary - Revenue and Profit Forecasts: - Total revenue is projected to grow from 115.78 billion CNY in 2024 to 125.54 billion CNY in 2027, with a compound annual growth rate (CAGR) of approximately 3.5% [2][11]. - Net profit is expected to increase from 8.45 billion CNY in 2024 to 13.30 billion CNY in 2027, reflecting a significant growth trajectory [2][11]. - Key Financial Ratios: - The report forecasts a price-to-earnings (P/E) ratio of 20 for 2024, decreasing to 13 by 2027, indicating an improving valuation as earnings grow [2][11]. - The projected dividend payout ratio is set at a minimum of 70%, with a current dividend yield of 4.6% for 2025, making it an attractive investment for income-focused investors [2][6]. - Quarterly Performance: - In Q3 2025, Yili achieved a revenue of 28.56 billion CNY, a decrease of 1.63% year-on-year, with a net profit of 3.23 billion CNY, down 3.35% from the previous year [2][7]. Product Segment Analysis - The report notes that liquid milk sales continue to face pressure, while milk powder and cold drink segments have shown strong growth, with respective revenue increases of 12.6% and 17.4% year-on-year in Q3 [2][6]. - The company is focusing on high-value products to mitigate the impact of excess milk supply and maintain market share [2][6].