\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 887 Inner Mongolia Yili Industrial Group Co.Ltd(600887) )
Event: the company issued an announcement on the operation from January to February 2022. After preliminary accounting, the company achieved a total operating revenue of about 21.5 billion yuan from January to February 2022, an increase of more than 15% year-on-year; The total profit was about 3.3 billion yuan, with a year-on-year growth rate of more than 20%.
From January to February, it achieved the strongest start, with a revenue growth rate of 15% +. According to the company announcement and official account, Golden, annex, golden collar, Qiao Le Zi, Zhen Si, Chang Qing, Yi Yi Tian, Yi Li children cheese sticks and other key products accounted for an increase of 3PCT compared with the same period last year. In terms of white milk business, in January, the company’s normal temperature white milk increased by 12.6% year-on-year; Among them, Jindian increased by 15.1%, ranking first in the same category. In terms of milk powder and cheese business, Nielsen data showed that the sales revenue of jinlingguan from January to February increased by more than 30% year-on-year, ranking the first in the industry; The cheese business doubled and the market share increased 3PCT. In terms of cold drink business, Qixuan, a high-end brand of qiaolez, has a growth rate of more than 74%, Zhenxi, a high-end brand, a growth rate of more than 82%, and xuquanhuan, a super high-end brand, has a growth rate of more than 748%. Yili mother brand rose 3.34% against the trend; Internal sales data show that the parent brand achieved 22% sales growth, creating the best in history. Yili’s market penetration in prefecture level cities and county-level cities increased by 0.6/1.2pct year-on-year respectively. This is consistent with the feedback that the demand for dairy products was strong in the beginning of the year, liquid milk maintained double-digit growth and high-end products grew faster according to the preliminary channel research. We believe that the company’s beautiful financial performance in 21q1 and the beginning of this year reflects the demand rigidity of dairy products and the strong brand strength of Yili.
The product structure has been continuously optimized and the profitability has been continuously improved. From January to February 2022, the company’s profit accounted for about 15.35% of revenue, an increase of about 3PCT over Q1 last year. We believe that the improvement of profitability comes from the optimization of product structure and expenses. In terms of product structure, the proportion of revenue from high-end liquid milk such as Jindian anmushi and jinlingguan milk powder and other high gross margin categories continued to increase, and the gross margin level was optimized. In terms of rates, the confirmation of Q1 Winter Olympics expenses does not affect the rates, mainly because the company will invest in product publicity in various ways during Q1 Spring Festival every year. This year is only the theme conversion of launch activities, but the rates are stable. At the same time, the overall cost rate of equity incentive decreased by about 0.13 PCT this year.
The competition of liquid milk is slowing down, and the coordinated development of milk powder M & a Aoyou can be expected, waiting for the continuous realization of the increase of net interest rate. We believe that the logic of increasing the company’s net interest rate every year will continue to be realized. In terms of cost, at present, the price of raw milk has decreased slightly from a high level. It is expected to maintain a tight balance this year, and the overall upward pressure has slowed down. Yili, as a leading company, has a strong control over the upstream milk source, which makes its performance more stable on the cost side. At the same time, since this year, the channel feedback industry cost has been relatively rational, the offline promotion cost of Yili Mengniu shuanglongtou has been slightly reduced, and the industry competition has remained rational. In terms of milk powder business, the company has successfully acquired Aoyou. It is worth looking forward to the coordinated development of milk powder brand, category, maternal and infant channel layout and milk source. The momentum of milk powder and cheese business as the second growth curve is gradually emerging.
Profit forecast and investment suggestions: Yili has stepped into the post 100 billion era, paying attention to the growth of the extension of categories such as milk powder and cheese and the improvement of the profit level brought by the improvement of the pattern of normal temperature liquid milk. Taking into account the company’s 22m1-2 operating data, we adjusted the profit forecast. It is estimated that the company’s revenue in 20212023 will be 1100 / 122.6/133.9 billion yuan respectively, with a year-on-year increase of 14% / 11% / 9%, the net profit attributable to the parent company is expected to be 88 / 106 / 12.4 billion yuan (87 / 101 / 11.4 billion yuan in the previous time), with a year-on-year increase of 25% / 20% / 16%, EPS is 1.38/1.66/1.93 yuan respectively, and the corresponding PE in 22-23 years will be 22x and 19x respectively, maintaining the “buy” rating.
Price fluctuation, food safety risk, and raw material industry risk.
