YILI(SH:600887) Xiangcai Securities·2026-01-12 07:07Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [1]. Core Insights - The report emphasizes the company's dividend yield as a safety margin, with a strong operational capability that reduces total costs. The liquid milk business is expected to benefit from a low base and low inventory, indicating an upcoming industry cycle turning point [3][4]. - The long-term strategy focuses on high-quality growth, with profit growth expected to outpace revenue growth. The company aims to optimize its product structure and enhance profitability through a platform strategy [4][23]. Company Investment Logic - Short-term Logic: High dividend commitments provide a safety margin, and profit recovery is exceeding expectations. The company is expected to benefit from a favorable macro environment and improved operational efficiency [12]. - Long-term Logic: The company is transitioning towards high-quality growth, with a focus on deep processing and functional nutrition products. The liquid milk business remains a strong foundation, while the company aims to achieve significant revenue in deep processing within five years [23][24]. Business Segmentation - The company is diversifying its business structure, focusing on new growth areas such as functional nutrition and deep processing of dairy products. The liquid milk, milk powder, and cold drink segments are all leading in their respective markets [5][42]. - The liquid milk segment is the largest revenue contributor, while the milk powder segment has shown the fastest growth and highest profit margins, becoming a core growth engine for the company [48][53]. Market Perspective - Contrary to market views that the dairy industry has entered a mature phase, the report argues that the company still possesses growth potential due to structural opportunities and a shift towards high-end products [6][66]. - The recovery of raw milk prices is expected to benefit leading dairy companies, alleviating competitive pressures and improving profit margins [67]. Financial Forecast and Investment Recommendations - Revenue projections for 2025-2027 are estimated at 1189.9 billion, 1250.4 billion, and 1302.6 billion yuan, with corresponding net profits of 113 billion, 125.3 billion, and 134.4 billion yuan. The report suggests that the company's high dividend yield and recovery in milk prices will support its growth trajectory [6][68].