Yantang Dairy(002732) 德邦证券·2024-02-05 16:00Investment Rating - The report initiates coverage on Yantang Dairy (002732 SZ) with a "Buy" rating [20] Core Views - Yantang Dairy is a leading dairy enterprise in South China, leveraging differentiated product categories and a stable management team to drive growth [23] - The company's revenue and net profit have shown steady growth, with a CAGR of 9 65% and 23 87% respectively from 2018 to 2022 [5] - Yantang Dairy is well-positioned to benefit from the structural upgrades and regional economic development in the dairy industry [3][9] Market Space and Industry Analysis - The dairy industry in China is experiencing moderate growth, with fresh milk and room-temperature milk sales expected to grow at a CAGR of 2 9% and 1 0% respectively from 2022 to 2028 [70] - The flavored milk beverage market in China grew from 929 6 billion yuan in 2017 to 1,237 5 billion yuan in 2021, with a CAGR of 7 4%, and is expected to reach 1,612 3 billion yuan by 2026 [3] - Guangdong Province, where Yantang Dairy operates, has a lower per capita milk consumption (9 3 kg) compared to the national average (12 4 kg), indicating significant growth potential [7][9] Financial Performance - Yantang Dairy's revenue and net profit in 2023Q1-3 increased by 5 12% and 70 33% year-on-year, respectively, driven by lower raw milk prices and recovering consumer demand [5] - The company's gross margin and net margin improved to 27 38% and 9 57% in 2023Q3, reflecting better cost control and operational efficiency [69] Competitive Landscape - The dairy industry in China is dominated by national brands like Yili and Mengniu, with regional players like Yantang Dairy focusing on differentiated products and local market advantages [13][37] - Yantang Dairy holds a leading market share in Guangdong Province, particularly in the milk and flavored milk beverage segments, with a market share of 0 5% and 1 0% respectively [93] Product Strategy and Innovation - Yantang Dairy focuses on product differentiation, with liquid milk and lactic acid bacteria beverages contributing 38 59% and 39 30% of revenue in 2022 [52] - The company has been actively launching new products, particularly in the low-temperature milk segment, to capture market share and meet consumer demand for healthier options [26][93] Regional Expansion and Market Penetration - Yantang Dairy is expanding its presence in the Greater Bay Area, with products now being supplied to schools in Macau, and plans to enter the Hong Kong market [25][81] - The company aims to achieve 5 billion yuan in revenue by 2030 through a strategy of "focusing on Guangdong, expanding in the Greater Bay Area, covering South China, and moving towards the national market" [25] Supply Chain and Production Capacity - Yantang Dairy has a well-established supply chain, with self-owned and strategic cooperative dairy farms ensuring stable milk supply [97] - The company's production capacity is expanding, with the Guangzhou flagship factory and Zhanjiang production base expected to increase capacity utilization as market demand grows [98]