Core Viewpoint - The report from Zhongyou Securities indicates that Yili Group aims to establish leadership in various segments by 2025, with a projected compound annual growth rate (CAGR) of double digits in revenue from 2021 to 2025, significantly outperforming the industry average [1] Revenue Growth - The overall revenue growth of the company is influenced by consumer sentiment, with a projected CAGR of 4.55% from 2020 to 2024, compared to the industry's decline of -0.18% [1] Market Position - In the liquid milk segment, Yili maintains the top market share, continuing to lead the industry [1] - The company has achieved the highest market share in the milk powder and dairy products sector, with growth rates surpassing competitors, particularly in the cheese market [1] - Yili's ice cream business also retains the leading market share, reinforcing its leadership across all business lines [1] Future Strategy - Over the next five years, Yili plans to focus on value reconfiguration along the supply chain and explore diversification, aligning with consumer demand and channel changes [1] - The company aims for its growth rate to exceed that of the industry and national GDP growth [1] International Expansion - Yili's overseas core markets are concentrated in Indonesia, Thailand, and New Zealand, with a focus on ice cream and infant formula products [1] - The company anticipates a turning point in its ambient liquid milk segment by 2026, expecting to lead the industry in achieving growth [1] Investment Rating - The report maintains a "Buy" rating for Yili Group [1]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative increase in stock price of over 20% compared to the benchmark index within the next six months [2][15]. Core Insights - The company aims to establish leadership in various segments by 2025, with a projected compound annual growth rate (CAGR) of over 10% in revenue from 2021 to 2025, significantly outperforming the industry average of -0.18% during the same period [4][5]. - The company holds the leading market share in liquid milk, milk powder, and ice cream, with continuous growth in these segments, particularly in cheese products [4][5]. - The company plans to enhance its value chain through diversification and international expansion, focusing on markets in Indonesia, Thailand, and New Zealand, while also developing functional nutrition and deep processing products [5][6]. Financial Performance and Projections - The company is projected to achieve revenues of CNY 120.31 billion, CNY 126.17 billion, and CNY 132.41 billion for the years 2025, 2026, and 2027, respectively, with year-on-year growth rates of 3.91%, 4.87%, and 4.94% [9][11]. - The net profit attributable to the parent company is expected to reach CNY 11.25 billion, CNY 12.20 billion, and CNY 13.25 billion for the same years, reflecting growth rates of 33.13%, 8.43%, and 8.57% [9][11]. - The company aims to maintain a cash dividend payout ratio of no less than 75% from 2025 to 2027, ensuring a stable dividend yield of approximately 4.92% by 2026 [9][11].

Investment Rating - The investment rating for the company is "Buy" and is maintained [8] Core Views - The company reported a total revenue of 90.564 billion yuan for the first three quarters of 2025, reflecting a year-on-year increase of 1.71%. However, the net profit attributable to shareholders decreased by 4.07% to 10.426 billion yuan, while the net profit excluding non-recurring items increased by 18.73% to 10.103 billion yuan [2][4] - In Q3 2025, the company experienced a total revenue of 28.631 billion yuan, a decrease of 1.7% year-on-year, and a net profit of 3.226 billion yuan, down 3.35% year-on-year [2][4] Summary by Relevant Sections Revenue Breakdown - For the first three quarters, revenue from liquid milk was 54.939 billion yuan (down 4.49% year-on-year), while revenue from milk powder and dairy products was 24.261 billion yuan (up 13.74% year-on-year). Revenue from cold drinks reached 9.428 billion yuan (up 13%), and other products saw significant growth, with revenue of 0.976 billion yuan (up 65.12%) [5] - In Q3 2025, liquid milk revenue decreased by 8.83% year-on-year, while milk powder and dairy products increased by 12.65%, and cold drinks grew by 17.35% [5] Profitability Analysis - The company's net profit margin for the first three quarters of 2025 decreased by 0.69 percentage points to 11.51%, while the gross profit margin increased by 0.45 percentage points to 35.48%. The expense ratio decreased by 1.04 percentage points to 21.97% [6] - In Q3 2025, the net profit margin decreased by 0.19 percentage points to 11.27%, and the gross profit margin decreased by 1.13 percentage points to 33.92% [6] Capital Expenditure and Shareholder Returns - The company is exploring new business opportunities despite pressure on liquid milk demand, with strong performance in new products and channels. Capital expenditures are expected to stabilize, with 2024 capital expenditure projected at approximately 3.978 billion yuan, down from 6.956 billion yuan in 2023 [7] - The company plans to distribute a mid-term dividend of 3.036 billion yuan, representing 29.12% of the net profit attributable to shareholders for the first three quarters [7]

Investment Rating - The report maintains a "Recommended" rating for the company [3]. Core Insights - The company demonstrates resilience through diversified operations and has announced an interim dividend of 0.48 CNY per share [5]. - For the first three quarters of 2025, the company achieved revenue of 90.56 billion CNY, a year-on-year increase of 1.7%, while the net profit attributable to shareholders was 10.43 billion CNY, a decrease of 4.1% [5]. - The liquid milk segment faced pressure, while the milk powder business continued to grow significantly [5]. - The company is expected to see revenue growth of 2.1% in 2025, with net profit growth of 32.5% [5]. Financial Performance Summary Revenue and Profitability - Projected revenue for 2024 is 115.78 billion CNY, with a growth rate of -8.24%, followed by 118.26 billion CNY in 2025 with a growth rate of 2.15% [2][6]. - The net profit attributable to shareholders is forecasted to be 8.45 billion CNY in 2024, increasing to 11.20 billion CNY in 2025, reflecting a growth rate of 32.5% [2][6]. - The gross margin is expected to remain stable, with a slight increase from 33.88% in 2024 to 34.24% in 2027 [2][6]. Cash Flow and Balance Sheet - Operating cash flow for 2024 is projected at 21.74 billion CNY, decreasing to 17.38 billion CNY in 2025 [7]. - Total assets are expected to grow from 153.72 billion CNY in 2024 to 163.37 billion CNY in 2027 [6]. - The company’s total liabilities are projected to decrease slightly from 96.71 billion CNY in 2024 to 95.50 billion CNY in 2027 [6]. Key Financial Ratios - The projected P/E ratio is expected to decrease from 20.26 in 2024 to 13.24 in 2027, indicating improved valuation over time [2][6]. - The return on equity (ROE) is expected to increase from 15.9% in 2024 to 20.1% in 2027, reflecting enhanced profitability [6].

Core Insights - Yili Group reported a total revenue of 90.564 billion yuan for the first three quarters, marking a year-on-year growth of 1.71%, while the net profit attributable to shareholders exceeded 10 billion yuan for the first time, reaching 10.103 billion yuan, a year-on-year increase of 18.73% [1] - The company announced a mid-term dividend plan, proposing a total cash dividend of 3.036 billion yuan, continuing its trend of high shareholder returns with a cumulative dividend payout of 58.566 billion yuan since its listing [1][6] Revenue Breakdown - Liquid milk remains the cornerstone of Yili's business, generating revenue of 54.939 billion yuan, maintaining a stable market share and position [2] - The milk powder segment showed significant growth, with revenue reaching 24.261 billion yuan, a historical high and a year-on-year increase of 13.74%, capturing 18.1% of the infant formula market share [3] - The ice cream segment also performed well, with revenue of 9.428 billion yuan, reflecting a year-on-year growth of 13% [3] Innovation and Product Development - Yili's cheese business focused on innovation, introducing new crispy cheese products and exploring new usage scenarios for cheese spreads, aiming for double-digit growth across milk powder, cheese, and ice cream segments [4] - The company is enhancing brand value through innovative consumer engagement strategies, including collaborations with global IPs and extending health services into new consumer scenarios [5][6] Marketing Strategy - Yili is building a "versatile Yili" brand image through various marketing campaigns that resonate with consumers' emotions and lifestyles, aiming to be a trusted provider of healthy food [6] - The company emphasizes its commitment to shareholder returns, with a target dividend payout ratio of no less than 70% in the coming years [6]

Investment Rating - The industry investment rating is "Outperform the Market" [1][22]. Core Insights - The report highlights that the liquor industry is experiencing a phase of accelerated clearing, with major companies like Kweichow Moutai showing resilience despite a slowdown in growth [1][4]. - The overall performance of the food and beverage sector has been mixed, with certain sub-sectors like pre-processed foods and snacks performing well, while soft drinks and other alcoholic beverages have seen declines [3][4]. - The report emphasizes the importance of focusing on high-quality companies with stable earnings during the industry's adjustment period, particularly recommending Kweichow Moutai and Shanxi Fenjiu for their strong fundamentals and attractive dividend yields [4]. Summary by Sections Liquor Industry - Kweichow Moutai reported Q3 2025 revenue of 39.064 billion yuan, a year-on-year increase of 0.56%, with net profit of 19.224 billion yuan, up 0.48% [3]. - The revenue from Moutai liquor increased by 7.26% to 34.924 billion yuan, while series liquor revenue fell by 34% [3]. - The company's gross margin improved to 91.44%, reflecting a better product mix, while net profit margin remained stable at 49.21% [3][4]. Dairy Industry - Yili Group's Q3 2025 revenue was 28.564 billion yuan, down 1.63%, with net profit of 3.226 billion yuan, a decrease of 3.35% [3]. - Liquid milk sales were under pressure, declining by 8.83%, while milk powder and dairy products saw a growth of 12.65% [3]. - The gross margin for Yili was 33.92%, down 1.13 percentage points, indicating cost pressures from raw milk prices [3]. Beauty Industry - Marubi Biotech achieved Q3 2025 revenue of 686 million yuan, up 14.28%, with net profit of 69 million yuan, an increase of 11.59% [4]. - The main brand Marubi saw a revenue increase of 33.93%, driven by strong performance of key products [4]. - The gross margin improved to 75.72%, supported by product mix optimization, despite increased marketing expenses [4].

Core Viewpoint - Yili's revenue has slightly increased while net profit has declined, indicating ongoing pressure in its core liquid milk business, despite growth in milk powder and ice cream segments. The industry faces challenges from weak consumption and a declining population dividend, raising questions about the sustainability of Yili's growth logic and whether investors should continue to hold or reassess their positions [2][3][4]. Financial Performance - In the first three quarters of 2025, Yili achieved revenue of 905.64 billion yuan, a year-on-year increase of 1.71%, while net profit was 104.26 billion yuan, down 4.07% [3]. - The revenue growth rate has slowed, with Q1 at 1.46%, Q2 rebounding to 5.77%, and Q3 showing a decline of 1.63% [3]. - The company announced a dividend plan of 0.48 yuan per share, totaling approximately 30.36 billion yuan, which represents 29.12% of net profit [4]. Industry Context - The overall dairy industry is under pressure, with over 60% of A-share listed dairy companies facing revenue declines. Yili remains the industry leader with 903.41 billion yuan in revenue and 104.26 billion yuan in net profit [5]. - The third quarter saw a decline in revenue and net profit, with Q3 revenue at 285.64 billion yuan, down 1.63%, and net profit at 32.26 billion yuan, down 3.35% [5]. Cost and Expense Management - Yili has been cautious with sales expenses, which decreased by 5.5% in Q3 to 52.2 billion yuan, while management expenses rose by 10.58% to 11.39 billion yuan [6]. - R&D expenses increased by 15.1% to 2.47 billion yuan, reflecting ongoing investment in product innovation [6]. Cash Flow and Inventory - Operating cash flow decreased by 32.23% to 94 billion yuan, attributed to a decline in pre-received payments from distributors, indicating potential inventory buildup and weakened market confidence [7]. Business Segment Analysis - The liquid milk segment is the main drag on Yili's overall performance, with revenue down 4.5% to 549.4 billion yuan in the first three quarters [8]. - The milk powder and dairy products segment showed strong growth, with revenue of 242.61 billion yuan, up 13.74%, and the ice cream segment also performed well with a 13% increase in revenue [10][11]. Market Outlook - The dairy industry is experiencing an oversupply of raw milk, with a projected surplus of 636,000 tons in 2024, indicating ongoing challenges for the sector [12]. - The long-term outlook is complicated by a declining birth rate, which is expected to shrink the market for infant formula, a key growth area for Yili [14]. Investor Sentiment - Following the earnings report, Yili's stock price reacted negatively, reflecting market skepticism about the company's future performance [12][15]. - Despite past profit growth, the company's market valuation has not increased, indicating a "valuation kill" phenomenon [15]. Future Prospects - Yili expresses confidence in benefiting from a potential industry turnaround as raw milk prices stabilize and consumer demand gradually recovers [16].

Economic News - The National Immigration Administration announced 10 innovative measures to support high-quality development and expand openness, including the implementation of a "national handling" policy for mainland residents applying for travel permits to Taiwan [1] - The Ministry of Finance and the State Administration of Taxation announced tax policies related to gold, exempting value-added tax for members or clients trading standard gold through designated exchanges [1] - The People's Bank of China announced the resumption of public market treasury bond trading, reflecting a shift in monetary policy management from "total adjustment" to "structured management" [1] - The China Macro Economic Monitoring and Forecasting Platform was launched to enhance the precision and effectiveness of macroeconomic analysis [1] - The contribution of margin financing business to the performance of listed brokerages has become a market focus, with a 70% year-on-year increase in margin financing scale for 42 listed brokerages [1] - A notification was issued to improve duty-free shop policies to boost consumption, effective from November 1, 2025 [1] - Several car manufacturers reported strong sales performance in October, with new energy vehicle sales expected to exceed previous forecasts due to favorable policies [1] Company Insights - Sailyus announced its H-share issuance price at HKD 131.5 per share, with listing on the Hong Kong Stock Exchange expected on November 5, 2025 [6] - Vanke entered into a loan framework agreement with Shenzhen Metro Group, agreeing to a loan of up to RMB 22 billion [6] - Visionox is planning to issue A-shares to specific investors, which may lead to a change in control [6] - Longji Technology announced a potential change in control due to share transfer plans by its actual controllers [7] Industry Reports East Star Food and Beverage - Fuling Mustard's revenue for the first three quarters reached RMB 2 billion, a year-on-year increase of 1.84%, with net profit of RMB 670 million, up 0.3% [8] - The company achieved a revenue growth of 4.48% in Q3, indicating stable performance [9] - The gross margin for the first three quarters was 53.7%, with a slight decrease in Q3 due to increased promotional activities [9] - The company is expanding into the catering channel, with sales in this segment nearing RMB 100 million, a growth of nearly 40% [9] East Star Metals and New Materials - Zhongmin Resources reported a revenue of RMB 4.818 billion for the first three quarters, a year-on-year increase of 34.99%, with a net profit of RMB 204 million, down 62.58% [10] - The company produced 256,000 tons of spodumene concentrate, with stable production of lithium salt [12] - The cesium and rubidium segment saw a revenue of over RMB 900 million, with a gross margin of approximately 66.67% [13] East Star Banking - Postal Savings Bank reported a revenue of RMB 265.08 billion and a net profit of RMB 76.565 billion for the first three quarters, with a year-on-year growth of 1.8% and 1.0% respectively [18] - The bank's non-interest income grew by 20.2%, contributing to a more balanced income structure [18] - The bank's loan growth was strong, with total loans increasing by 10% year-on-year [19] East Star Machinery - Lanjian Intelligent reported a revenue of RMB 508 million in Q3, a year-on-year increase of 62.62%, with a net profit growth of 97.12% [26] - The company is focusing on intelligent logistics equipment, with a significant demand increase [27] - The establishment of a research institute in collaboration with Shandong University aims to enhance the development of embodied intelligence robots [28]

Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside in the stock price [3][10]. Core Insights - The company reported a revenue of 90.56 billion RMB for the first three quarters of 2025, a year-on-year increase of 1.7%, with a net profit of 10.43 billion RMB, down 4.1% year-on-year. The third quarter revenue was 28.63 billion RMB, a decrease of 1.7% year-on-year, with a net profit of 3.23 billion RMB, down 3.4% year-on-year [8][10]. - Despite a challenging market environment, the company continues to enhance its competitive position in niche segments. The liquid milk segment saw a revenue decline of 8.8% in Q3, while the milk powder and dairy products segment grew by 12.7%, and the ice cream segment increased by 17.4% [10]. - The gross margin for Q3 decreased by 1.1 percentage points to 33.9%, primarily due to changes in the product mix [10]. - The company is expected to see a significant rebound in performance in Q4 due to a low base effect, although supply-demand imbalances may take time to adjust [10]. - The profit forecast for 2025-2027 has been revised downwards, with expected net profits of 11.08 billion RMB, 12.27 billion RMB, and 13.47 billion RMB, representing year-on-year growth rates of 31%, 10.7%, and 9.8% respectively [10]. Financial Summary - The company’s market capitalization is approximately 172.52 billion RMB, with a current share price of 27.41 RMB as of October 31, 2025 [2]. - The earnings per share (EPS) for 2025 is projected to be 1.75 RMB, with a price-to-earnings (P/E) ratio of 16 times [10][12]. - The dividend per share (DPS) is expected to be 1.26 RMB for 2025, with a dividend yield of 4.60% [12].

Group 1: Market Strategy and Economic Outlook - The current market is transitioning from a "technology bull" to a "wealth bull," indicating a favorable time to invest in cyclical sectors [6][10] - The third quarter of 2025 shows a recovery in profitability, with A-share cumulative profit growth expected to reach 11% in 2026, marking a shift to an earnings-driven bull market [14] - The "15th Five-Year Plan" suggests a need for GDP growth of at least 4.1% annually, indicating a supportive environment for cyclical industries [7] Group 2: Industry Performance Insights - The computer industry experienced a revenue increase of 10.5% year-on-year in the first three quarters of 2025, with net profit rising by 47.77% [19] - The materials and manufacturing sectors showed a significant improvement in free cash flow, with a year-on-year increase of 1,100 million yuan in the third quarter [16] - The TMT sector's capital expenditure (CAPEX) expansion is impacting cash flow, with a notable decrease in free cash flow by 928 million yuan in the third quarter [15] Group 3: Company-Specific Analysis - Huada Jiutian reported a revenue of 8.05 billion yuan in the first three quarters of 2025, with a significant decline in net profit due to reduced government subsidies [46][47] - Jiuzhou Pharmaceutical achieved a revenue of 41.60 billion yuan, with a net profit increase of 18.51%, driven by a stable CDMO business [50][51] - New Dairy's revenue for the first three quarters reached 84.34 billion yuan, with a net profit increase of 31.48%, indicating strong operational performance [53][54]