On March 10, Inner Mongolia Yili Industrial Group Co.Ltd(600887) ( Inner Mongolia Yili Industrial Group Co.Ltd(600887) ) issued the announcement on main business conditions 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%.
Dairy products have been more and more recognized by consumers because of their unique health attributes. In recent years, the consumption demand of dairy products has shown a continuous growth trend. The announcement shows that the company has been following the high-quality development route by grasping the market trend. At the beginning of this year, the operating revenue exceeded 10 billion yuan in a single month, reaping the strongest “good start” in history, and the overall performance also hit a new record.
On March 11, Inner Mongolia Yili Industrial Group Co.Ltd(600887) closed at 38.30 yuan / share, up 4.22%, with the latest market value of 245.1 billion yuan.
Recently, several securities companies issued research reports and gave Inner Mongolia Yili Industrial Group Co.Ltd(600887) buy rating Citic Securities Company Limited(600030) said that Yili’s competitive barriers and pricing power have further improved after the industry competition, epidemic situation and raw milk rising cycle in the past few years. Driven by the optimization of product structure, the decline of milk price, the steady decline of expenses and other factors, the company is expected to maintain double-digit growth of revenue and continuous improvement of profitability in the future.
innovation driven growth, multi category and multi brand full bloom
The announcement shows that from January to February this year, Inner Mongolia Yili Industrial Group Co.Ltd(600887) its liquid milk, milk powder and dairy products, cold drinks and other businesses maintained a good growth trend. The proportion of sales revenue of key products such as Jindian, amuxi, jinlingguan, qiaolez, Zhen Xi, Changqing, meiyitian and Yili children’s cheese stick increased by 3 percentage points year-on-year, and the market share maintained a leading position.
Specifically, Inner Mongolia Yili Industrial Group Co.Ltd(600887) white milk business continues to maintain a high growth trend. According to Nielsen data, in January this year, Inner Mongolia Yili Industrial Group Co.Ltd(600887) 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 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%.
In terms of milk powder business, the sales revenue of jinlingguan from January to February increased by more than 30% year-on-year. In February 2022, jinlingguan infant milk powder completed the formula upgrading and passed the review of the “new national standard”. Yili became the only milk powder head enterprise that passed the most stringent “new national standard” in history.
In terms of cheese business, the market share of Yili cheese increased by 3 percentage points year-on-year in January 2022. The total internal sales data from January to February doubled year-on-year, much higher than that of the same industry.
Citic Securities Company Limited(600030) analysis said that the reason for the rapid growth of Inner Mongolia Yili Industrial Group Co.Ltd(600887) 1-february performance is closely related to the continuous high growth of milk powder business. At the same time, a number of new products successfully listed by the company also continue to drive the sales of products.
It is reported that since the beginning of this year, Inner Mongolia Yili Industrial Group Co.Ltd(600887) has successively launched a number of new products, including “Jindian ultrafiltration milk”, “amushidandong strawberry”, “Changqing protein time”, “jinlingguansenamu organic milk powder”, “xujihuan thick milk ice cream”, and combined with a number of innovative marketing measures.
Inner Mongolia Yili Industrial Group Co.Ltd(600887) said that continuous innovation is an important factor for the company’s strongest “good start” performance growth.
Southwest Securities Co.Ltd(600369) analysis said that the amuxi brand of Inner Mongolia Yili Industrial Group Co.Ltd(600887) introduced new flavors such as pineapple and Dandong strawberry, driving the growth of its normal temperature yogurt category. The Jindian ultrafiltration milk with high protein, high calcium and low fat launched by the white milk category has also realized the category upgrading. These innovative measures are driving Inner Mongolia Yili Industrial Group Co.Ltd(600887) rapid growth.
take advantage of Olympic marketing to further improve brand strength
According to the announcement, Inner Mongolia Yili Industrial Group Co.Ltd(600887) is the only “double Olympic milk enterprise” in China. It has been 17 years since it joined hands with the Olympic Games. From January to February 2022, the company achieved the improvement of the overall brand strength through the brand marketing integration of Winter Olympic Games and spring promotion.
It is reported that on the one hand, Inner Mongolia Yili Industrial Group Co.Ltd(600887) by creating Yili’s exclusive visual symbols for the Winter Olympics and joining hands with the people in the hometown of the Winter Olympic athletes, it has greatly improved consumers’ preference for Yili brand; On the other hand, Inner Mongolia Yili Industrial Group Co.Ltd(600887) online and offline marketing is comprehensively combined with the themes of the Spring Festival and the Winter Olympics to promote multi platform platforms such as terminals, e-commerce, new retail and small programs to maximize the Winter Olympics resources and realize the integration of quality and efficiency.
According to the third-party survey data, consumers’ willingness to buy Yili products reached a record high during this period, and Yili’s parent brand rose 3.34% against the trend.
It is reported that at present, the market penetration of Yili products continues to maintain the leading level in the industry. The market penetration in prefecture level cities and county-level cities has increased by 0.6 percentage points and 1.2 percentage points respectively year-on-year, and the reach scale of consumers has continued to rise.
China International Capital Corporation Limited(601995) analysis said that Inner Mongolia Yili Industrial Group Co.Ltd(600887) took advantage of the Winter Olympics marketing, which not only further improved its brand strength, but also achieved good cost control, and the overall investment effect was obvious. It is expected that the gross profit margin of Inner Mongolia Yili Industrial Group Co.Ltd(600887) 1-february will increase year-on-year, and the good control of the company’s offline expenses will also help to improve its profit margin.
global industrial chain layout, building a “moat” for performance growth
Milk source is the lifeblood of dairy enterprises, and the shortage of milk source has always been a bottleneck restricting the development of the industry. According to the data of the National Bureau of statistics, the gap between supply and demand of raw milk in China continued to expand from 2015 to 2020, reaching 18.75 million tons in 2020.
In recent years, Yili has made great moves in the layout of milk sources, and has formed great milk source advantages through its own milk sources and cooperative milk sources. At present, Yili owns the high-quality milk source of Youran animal husbandry and Zhongdi dairy, the largest dairy farming enterprise in China, and has acquired Westland dairy, the second largest dairy enterprise in New Zealand overseas.
Minsheng Securities said, Inner Mongolia Yili Industrial Group Co.Ltd(600887) in the context of the shortage of raw milk, ensured the stability and high quality of raw milk supply. A series of mergers and acquisitions and overseas acquisitions further improved the company’s raw milk self-sufficiency rate. It is expected that the price of raw milk will remain high as a whole in 2022, and the downstream competition will remain relaxed, which is better than the balanced development of Inner Mongolia Yili Industrial Group Co.Ltd(600887) ‘s income and profit. Yili is expected to maintain the long-term logic of improving profitability. In the long run, the net interest rate is expected to rise to a steady-state level of 9% – 10%.
It is reported that on the basis of global layout, in 2022, Inner Mongolia Yili Industrial Group Co.Ltd(600887) will continue to accelerate the process of internationalization by exploring the global market and building overseas production bases.
In terms of supply chain, up to now, Inner Mongolia Yili Industrial Group Co.Ltd(600887) its Indonesian dairy industry has rapidly released production capacity since it was put into operation in October last year, realizing full localized production and supply in the Indonesian market;
In terms of brand investment, Inner Mongolia Yili Industrial Group Co.Ltd(600887) in core markets such as Thailand and Indonesia, fully integrated Wuxi Online Offline Communication Information Technology Co.Ltd(300959) marketing resources for cremo and joyday respectively, and continued to build brand influence;
In terms of channel construction, Inner Mongolia Yili Industrial Group Co.Ltd(600887) is actively seizing high-quality outlets, making comprehensive breakthroughs in convenience systems such as 7-11, fair price and modern channels, and continuously enhancing its market coverage;
In terms of new product research and development, based on the long-term insight into Indonesian and Thai consumers, Inner Mongolia Yili Industrial Group Co.Ltd(600887) continues to promote new product research and development, and plans to invest more than 10 new products in research and development throughout the year, so as to continuously improve Yili’s local competitiveness and market performance.
