YILI(600887) 东吴证券·2024-05-02 11:30Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported total revenue of 126.18 billion yuan in 2023, a year-on-year increase of 2.4%, and a net profit attributable to shareholders of 10.43 billion yuan, up 10.6% year-on-year. For Q1 2024, total revenue was 32.58 billion yuan, down 2.6% year-on-year, while net profit attributable to shareholders was 5.923 billion yuan, up 63.8% year-on-year [3] - The company is experiencing a soft performance in liquid milk due to inventory reduction in the off-season, with liquid milk revenue growth of 0.7% in 2023 and a decline of 6.8% in Q1 2024. The product mix continues to upgrade, with expectations for better performance in premium products [3] - The company’s adult milk powder segment showed steady growth, while the infant formula segment faced pressure due to declining birth rates and channel adjustments. Future growth is anticipated as birth rates recover [3] - Cost advantages are improving gross margins, with gross margins increasing by 0.3% in 2023 and 2 percentage points in Q1 2024. The company is actively controlling costs, leading to significant improvements in gross sales margins [3] - The net profit margin exceeded expectations in 2023, with a notable increase in investment income in Q1 2024 due to the sale of coal assets. The company’s net profit margin and net profit margin excluding non-recurring items both improved year-on-year [3] - The company plans to increase shareholder returns through a higher dividend payout ratio and share buybacks, with a target revenue of 130 billion yuan in 2024, representing a 3% year-on-year increase [3] Financial Forecasts and Valuation - The company’s revenue forecasts for 2024-2026 have been adjusted to 130.3 billion yuan, 136.6 billion yuan, and 143.1 billion yuan, with year-on-year growth rates of 3.23%, 4.9%, and 4.75% respectively. The net profit forecasts for the same period are 13.1 billion yuan, 12.2 billion yuan, and 13.5 billion yuan, with corresponding P/E ratios of 14x, 15x, and 13x [3]