\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 887 Inner Mongolia Yili Industrial Group Co.Ltd(600887) )
Events
On March 10, the company issued the announcement on main business conditions from January to February 2022. After preliminary accounting, 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, with a year-on-year growth rate of more than 20%.
Brief comment
The new year has a good start and the performance has exceeded expectations. From January to February 2022, all businesses of the company maintained a good growth trend. The proportion of key products such as Jindian, anmushi, jinlingguan, qiaolez, Zhen Xi, Changqing, meiyitian and Yili children’s cheese stick increased by 3 percentage points year-on-year, further expand the scale of high-end segment market, meet the demand of consumption upgrading, and maintain the leading position in the market share of high-end products:
(1) liquid 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%.
(2) cold drink business: qiaolezi’s high-end brand Qixuan has a growth rate of more than 74%, and the high-end brand Zhenxi has a growth rate of more than 82%.
(3) milk powder business: from January to February, the sales revenue of jinlingguan increased by more than 30% year-on-year. In February 2022, jinlingguan infant formula was upgraded and passed the review of “new national standard”.
(4) cheese business: in January 2022, the market share of Yili cheese increased by 3 percentage points year-on-year, much higher than that of the same industry.
Spring festival marketing and Winter Olympics events further enhance brand influence. In terms of brand strength improvement, the company has worked with the Olympic Games for 17 years. From January to February 2022, the overall brand strength has been improved through the brand marketing integration of Winter Olympics and spring promotion. The market penetration of Yili products continued to rank first in the industry, with the market penetration in prefecture level cities and county-level cities increasing by 0.6 percentage points and 1.2 percentage points respectively year-on-year.
The acquisition of Aoyou by tender was successful, and the business layout of overweight milk powder and health food was improved. After successfully entering the top five dairy companies in the world in 2020, the company has set the medium and long-term goals of “top three in the world in 2025” and “first in the world in 2030”. On March 3, the company accounted for 52.7% of the total issued shares of Aoyou dairy. The success of the comprehensive tender offer means that Yili and Aoyou will enter a new era of strategic in-depth coordination. Aoyou dairy is a fast-growing infant formula and nutritional health company in recent years. It is also one of the most internationalized dairy enterprises in China and has the first brand of goat milk in the world. The two sides can complement each other’s advantages and coordinate efficiently in terms of supply chain, channel and product layout. As a nutrition and health company with comprehensive layout and profound accumulation in the field of nutrition, Aoyou has the rather scarce qualification of “blue hat” of health products, which has obvious synergy with Yili’s expansion and layout in the field of health food in the future.
Profit forecast: from 2021 to 2023, the company is expected to realize revenue of 109.88/122.29/134.51 billion yuan, net profit attributable to parent company of 9.01/109.9/12.59 billion yuan, corresponding EPS of 1.41/1.72/1.97 yuan and PE of 26x, 21x and 19x.
Risk tip: the risk of repeated epidemic, the risk of rapid rise in raw milk prices, and the slowdown of competition are lower than market expectations.
