\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 887 Inner Mongolia Yili Industrial Group Co.Ltd(600887) )
Performance review
On March 10, the company announced that from January to February 2022, the company achieved a total operating revenue of about 21.5 billion yuan, an increase of more than 15% year-on-year; The total profit was about 3.3 billion yuan, a year-on-year increase of more than 20%.
Business analysis
Key products continue to make efforts, and channel penetration continues to improve. 1) Products: from January to February, the revenue share of Jindian, anmushi, jinlingguan, qiaolez, Zhen Xi, Changqing, meiyitian and Yili children’s cheese stick increased by 3pcts year-on-year. In January, normal temperature white milk increased by 12.6% year-on-year; Among them, Jindian increased by 15.1%, ranking first in the same category. Jinlingguan infant milk powder has become the first batch of products in China to pass the new national standard for infant powder preparation (the new national standard for infant powder preparation was promulgated in March 2021, with more stringent indicators, and the transition period is 2 years, which is expected to be officially implemented in 2023). From January to February, jinlingguan’s sales revenue increased by more than 30% year-on-year, ranking the first in the industry. From January to February, the cold drink business also achieved significant growth. The growth rates of high-end brands Qixuan and Zhenxi reached more than 74% and 82% respectively, and super high-end brands must enjoy an increase of more than 748%. According to Nielsen’s data, the market share of the company’s cheese increased 3PCT year-on-year in January; From January to February, the revenue doubled year-on-year. 2) Channel: the market penetration rate continued to be the first in the industry, and the penetration rate in prefecture level cities and county-level cities increased by 0.6pct and 1.2pct respectively year-on-year. 3) Brand: from January to February, the company further improved the overall brand strength through the brand marketing integration of the Winter Olympic Games and the Spring Festival peak season.
We believe that the company’s operating data from January to February are bright, reflecting the good terminal demand for liquid milk. 1) Revenue side: from the perspective of demand, dairy products are less affected by the epidemic, and benefit from the boost of health awareness. Since the second half of 20 years, the prosperity of white milk has been good, and the growth rate of high-end series is faster. The demand is expected to remain stable at the double-digit level for 22 years. 2) Profit side: appropriate fee control and promotion (the cost of 21 and 22 years since the channel feedback has been reduced compared with 19 and 20 years), product structure upgrading (the proportion of Jindian series, milk powder and other high-end high gross profit products continues to increase), and narrowing the increase of raw milk price can release a certain profit space and achieve the goal of increasing the annual net interest rate by 0.5pct.
Profit forecast and investment suggestions
Regardless of the consolidation of Aoyou, we estimate that the company’s revenue in 21-23 years will be 110.2/123.0/135.8 billion yuan respectively, with a corresponding growth rate of 13.8% / 11.6% / 10.4%, the net profit attributable to the parent company will be 9.0/107/12.6 billion respectively, with a corresponding growth rate of 27.1% / 19.0% / 17.4% respectively, and the valuation in 22-23 years will be 22 / 19 times respectively.
Risk tips
Raw milk prices rose more than expected, food safety problems, and industry competition intensified.
