YILI(600887) 国联证券·2024-05-16 08:02Investment Rating - The report maintains a "Buy" rating for Yili Co., Ltd. (600887) with a target price of 37.08 CNY, based on a current price of 27.80 CNY [2][3]. Core Views - The company announced a total revenue and net profit of 126.18 billion CNY and 10.43 billion CNY for 2023, representing a year-on-year increase of 2.44% and 10.58% respectively. However, the revenue and net profit for Q1 2024 are projected to decline by 1.82% and 23.47% [3]. - The report highlights that the company is adjusting its channels to respond to weak demand, with a focus on enhancing shareholder returns through dividends and share buybacks [2][3]. Revenue Analysis - In 2023, the revenue from liquid milk, milk powder, and cold drinks grew by 0.72%, 5.09%, and 11.72% year-on-year respectively. The report indicates that the liquid milk product structure is slowly upgrading, but weak demand has led to increased promotional efforts [3]. - For Q1 2024, the revenue from liquid milk, milk powder, and cold drinks is expected to decline by 6.81%, 0.20%, and increase by 14.21% year-on-year respectively [3]. Profitability - The company's net profit margin improved by 0.59 percentage points to 8.18% in 2023, primarily due to cost benefits and product category upgrades. The net profit margin for Q1 2024 is expected to rise by 1.53 percentage points to 11.48% [3]. - Despite increased expenses and impairment provisions, the company achieved a net profit margin improvement, driven by raw material cost benefits and product category upgrades [3]. Dividend and Buyback Strategy - The company maintained a cash dividend payout ratio of 79.94% in 2023, with expectations to sustain a payout ratio of over 70% in the future. Additionally, the company plans to repurchase shares worth 1 to 2 billion CNY at a price not exceeding 41.88 CNY per share, with all repurchased shares to be canceled [3]. Financial Forecast and Valuation - The report forecasts total revenue for 2024-2026 to be 1295.87 billion CNY, 1350.88 billion CNY, and 1396.33 billion CNY, with year-on-year growth rates of 3.04%, 4.25%, and 3.36% respectively. The net profit is projected to be 130.66 billion CNY, 127.59 billion CNY, and 137.52 billion CNY, with growth rates of 25.29%, -2.35%, and 7.78% respectively [3][4]. - The report assigns a price-to-earnings (PE) ratio of 18.07 for 2024, supporting the target price of 37.08 CNY [3].