YILI(SH:600887) Huachuang Securities·2024-04-30 05:33Investment Rating - The report maintains a "Strong Buy" rating for the company with a target price of 40 RMB [2][27]. Core Views - The company demonstrated steady operations with a focus on increasing dividends and initiating share buybacks, reflecting a commitment to shareholder returns [2]. - The company achieved a total revenue of 126.18 billion RMB in 2023, a year-on-year increase of 2.4%, and a net profit attributable to shareholders of 10.43 billion RMB, up 10.6% year-on-year [2][8]. - The company plans to achieve a total revenue of 130 billion RMB in 2024, representing a 3% year-on-year growth, and a profit total of 14.7 billion RMB, indicating a 25.4% increase [2][8]. Financial Performance Summary - In Q4 2023, the company reported total revenue of 28.77 billion RMB, a decrease of 1.8% year-on-year, with a net profit of 1.05 billion RMB, down 23.5% year-on-year [2][12]. - For Q1 2024, total revenue was 32.58 billion RMB, a decline of 2.6% year-on-year, while net profit surged to 5.92 billion RMB, up 63.8% year-on-year [2][12]. - The gross margin for Q4 2023 was 31.5%, an increase of 0.32 percentage points year-on-year, benefiting from lower raw milk costs [2][12]. Dividend and Share Buyback - The company proposed a cash dividend of 1.2 RMB per share, with a dividend payout ratio of 73.25%, an increase of 3.05 percentage points year-on-year [2][8]. - The company initiated a share buyback plan, intending to repurchase shares at a price not exceeding 41.88 RMB per share, with a total buyback amount between 1 billion to 2 billion RMB [2][8]. Market Position and Strategy - The company maintained its leading market position in liquid milk, adult milk powder, and cold drinks, with market shares in infant formula and cheese increasing by 1.6 percentage points and 0.6 percentage points to 16.2% and 16.9%, respectively [2][8]. - The company is focusing on stabilizing its supply chain and enhancing product freshness while adjusting its distribution channels to ensure distributor profitability [2][8].