Summary of Yili Industrial (600887.SS) Corporate Day Company Overview - **Company**: Yili Industrial - **Industry**: Consumer & Leisure (Dairy Sector) Key Takeaways from the Corporate Day 1. **2025 Performance and Guidance**: - Management maintains guidance for positive sales growth and above 9% net profit margin (NPM) in 2025 - Growth driven by solid performance in non-UHT milk products and resilient UHT milk performance - UHT milk achieved stabilized market share; chilled liquid milk recorded positive growth in 9M25 - Cheese, milk powder, and ice cream delivered strong performance with double-digit percentage (DD%) sales growth in 9M25, expected to maintain for FY25 - Emerging channels (E-commerce, membership KAs, discounter stores, community stores) account for approximately 30% of UHT milk channel mix, while traditional supermarkets declined to 20% [1][1][1] 2. **2026 Outlook**: - Management expects improvement in raw milk supply/demand dynamics with herd cuts and stabilization of raw milk prices - Aims to outgrow the industry with positive sales growth in liquid milk in 2026, leveraging the Lunar New Year (LNY) season for growth through integrated marketing activities - Continued collaboration with emerging channels is planned - Confidence in cheese, milk powder, and adult nutrition products for 2026 [1][1][1] 3. **Infant Milk Formula (IMF) Strategy**: - Targeting double-digit percentage sales growth in milk powder - Aims to achieve No. 1 market share for Pro-kido by 2027, already holding No. 1 market share for Pro-kido + Ausnutria in 2025 - Anticipates a slight decline in new births in 2025 compared to 2024, but expects a slight increase in 2026 due to the Year of Horse in China [1][1][1] 4. **Long-term Growth Pillars**: - Cheese and dairy deep-processing identified as emerging long-term growth pillars - EU anti-dumping measures favoring domestic leaders in the Chinese dairy industry - Upgrades in adult nutrition and overseas business expected to drive incremental growth with potential double-digit percentage sales growth in 2026 [1][1][1] Financial Projections - **12-month Price Target**: Rmb33.90 - **Current Price**: Rmb27.68 - **Market Cap**: Rmb177.1 billion / $25.4 billion - **Revenue Projections**: - 2025: Rmb116.75 billion - 2026: Rmb119.00 billion - 2027: Rmb122.01 billion - **EBITDA Projections**: - 2025: Rmb16.10 billion - 2026: Rmb17.25 billion - 2027: Rmb18.55 billion - **EPS Projections**: - 2025: Rmb1.70 - 2026: Rmb1.79 - 2027: Rmb1.98 - **P/E Ratios**: - 2025: 16.3x - 2026: 15.5x - 2027: 14.0x - **Dividend Yield**: Expected to increase from 4.5% in 2025 to 5.4% in 2027 [7][7][7] Risks and Methodology - **Key Risks**: - Slower-than-expected demand for liquid milk premium products - Slower recovery in dairy demand - Increased competition [6][6][6] This summary encapsulates the essential insights from Yili Industrial's corporate day, highlighting the company's performance, strategic outlook, and financial projections.