Group 1: Yili Co., Ltd. (伊利股份) - Business Quality: In 2024, Yili's revenue is projected to be 115.8 billion, a decrease of 8% year-on-year, with a net profit of 6.011 billion, down 40% year-on-year [2][3] - Cost Pressure: Sales expenses reached 21.98 billion, accounting for 19% of revenue, significantly higher than R&D expenses of 870 million, leading to a net profit margin of only 7.33% [3][4] - Competitive Advantage: ROIC decreased from 9.5% in 2023 to 7%, indicating that Yili's competitive edge lies in channel management rather than product innovation [4] - Valuation Concerns: Current PE ratio is 22.5 based on 2024 net profit, with a warning that the dairy industry growth has slowed to single digits and high sales expense ratios may hinder profit growth [5] Group 2: Midea Group (美的集团) - Business Quality: In 2024, Midea's revenue is expected to be 409.1 billion, a 9.5% increase year-on-year, with a net profit of 38.5 billion, up 14.3% year-on-year [9][10] - Cost Structure: Sales expenses of 38.75 billion account for 9.5% of revenue, which is 2.4 times higher than R&D expenses of 16.23 billion, raising questions about the sustainability of marketing-driven growth [10][11] - Growth Acceleration: In Q1 2025, revenue surged to 128.4 billion, a 20.6% increase year-on-year, with net profit rising 38% [12] - Valuation Analysis: Current PE ratio is approximately 14.5 based on 2024 net profit, with concerns about declining ROIC and potential risks from overseas revenue exposure [14] Group 3: Kweichow Moutai (贵州茅台) - Business Quality: Moutai's revenue grew by 10.54% and profit by 11.56% in Q1, showcasing its strong market position with a high gross margin of 91.93% and net margin of 52.27% [18][19] - Competitive Advantage: Moutai maintains a healthy inventory level of 0.5 months, significantly lower than competitors, indicating strong pricing power and market demand [19] - Valuation Insights: Current valuation based on a projected net profit of 93.485 billion in 2025 suggests a PE ratio of around 20, which is considered reasonable given its ability to outperform inflation [20] - Extreme Scenario Analysis: Moutai's pricing power allows it to maintain positive revenue growth even in adverse market conditions, supported by strong cash flow [21]