\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 887 Inner Mongolia Yili Industrial Group Co.Ltd(600887) )
Event:
The company released the annual report and the first quarterly report. In 2021, the annual operating revenue reached 110595 billion, the same as + 14.15%; The net profit attributable to the parent company was 8.705 billion, the same as + 22.98%; Deduct non net profit of RMB 7.944 billion, the same as + 19.90%; EPS1. 36 yuan / share, 9.6 yuan for every 10 shares (including tax). Among them, Q4’s operating income was 25.588 billion, the same as + 10.70%, the net profit attributable to the parent was 761 million, the same as – 27.82%, and the net profit deducted from non-profit was 397 million, the same as – 51.49%. In 2022q1, the operating revenue was 31.047 billion, the same as + 13.47%; The net profit attributable to the parent company is 3.519 billion, the same as + 24.32%; Deduct non net profit of RMB 3.290 billion, the same as + 25.18%.
Key investment points:
Revenue crossed the 110 billion mark, and the leading position was further consolidated. In 2021, Yili’s revenue exceeded 100 billion for the first time, becoming the first dairy enterprise in Asia to exceed 100 billion. Structural upgrading and high-end drive the company’s performance growth. In 2021, due to the sales volume / structural upgrading / unit price increase, the revenue increased by 7.147/35.562411 billion yuan respectively, the same as + 7.5% / + 3.7% / + 2.5%. Revenue by products in 2021: liquid milk 84.911 billion, the same as + 11.5%; Milk powder and dairy products amounted to 16.209 billion, the same as + 25.8%; Cold drinks 7.161 billion, the same as + 16.3%. Revenue of Q1 products in 2022: liquid milk 22.318 billion, the same as + 7.0%; 5.395 billion milk powder and dairy products, the same as + 35.3%; Cold drinks 2.795 billion, the same as + 35.5%. In 2022, the company plans to achieve a total operating revenue of 129.6 billion yuan, the same + 17.7%, and a total profit of 12.2 billion yuan, the same + 20.7%, which is expected to include the effect of consolidation and Australian excellence.
Under the background of high raw material costs, the company shows good cost control ability. In 2021, the purchase price of raw and fresh milk in China remained high, with an average price of 4.29 yuan / kg, which was + 13.2% year-on-year compared with the average price in 2020. The company effectively responded to and digested the rising pressure of milk price through product structure adjustment and high-end. In 2021, the company achieved a comprehensive gross profit margin / net profit margin of 30.70% / 7.93%, the same as + 0.47 / + 0.58pct, of which liquid milk / milk powder and dairy products / cold drinks achieved a gross profit margin of 28.3% / 39.2% / 40.3%, the same as + 0.41 / + 0.04 / – 0.61pct. The gross sales difference of 2021q4 company decreased to 5.41%, mainly due to the provision of marketing expenses for 2022 Winter Olympic Games, and the net interest rate was the same as -1.58pct to 3.0%. The gross profit margin of the company remained stable at 2020.2t% and 2020.2t%, with a net profit margin of + 16.983%. (Note: in 2021, the company will include transportation expenses and daily repair expenses related to production into operating costs).
The scale and market share of liquid milk business continue to maintain the leading position in the industry, organically lead the development of the industry at room temperature, and innovate the vitality of hair replacement yogurt. Liquid milk is the basic base of Yili’s income. In 2021, the market share of Yili Normal temperature liquid milk reached 40%. The annual sales scale of Yili pure milk, Jindian pure milk and amuxi normal temperature yogurt series products exceeded 20 billion yuan, becoming a superstar single product in the field of dairy products and even food. Normal temperature white milk: Jindian organic milk has a strong growth of 41.5%, with a market share of 51.4%, and continues to maintain the first position of organic milk; Functional Shuhua milk continues to expand the sub circuit, the same as + 30%. Normal temperature yogurt: normal temperature yogurt continued to consolidate its leading position, accounting for 65.2% of the market. With + 2pct, amuxi continued to change its hair vitality through taste upgrading (launching new products of sweet pineapple and Dandong strawberry). Excellent sour milk: the sales scale of excellent sour milk exceeds 10 billion and continues to rank first in the subdivided category. Low temperature fresh milk: the growth rate exceeded 250% in 2021, and the market share increased by 5.4pct, ranking among the top 3 categories. Low temperature yogurt: Changqing ranks first in the brand strength of low temperature yogurt, and the high-end product line “protein time” leads a new healthy track.
The company’s milk powder business continued to maintain higher than the overall revenue growth, and the new growth rose strongly. The growth rate of milk powder business was the first, and it actively cooperated with Aoyou. In 2021q4 and 2022q1, the revenue of Yili milk powder and dairy products business was the same as + 29.1% / + 35.3%, and the growth rate was higher than that of the overall revenue. Infant powder: the growth rate is the first in the market, and the market share jumps to the second in the industry. The revenue of jinlingguan exceeded 10 billion, of which jinlingguanzhenhu ranked first in the growth breakdown category. Adult milk powder: keep the first place in the market, among which the middle-aged and elderly milk powder market accounts for 30% +, leading the industry. Yili’s successful acquisition of Aoyou in 2022 will significantly enhance Yili’s comprehensive strength in the field of milk powder. We expect Yili and Aoyou to become integrators of domestic and foreign brands in China’s milk powder industry respectively, and seek coordination in the direction of supply chain and R & D.
The cheese business is growing rapidly, and the cold drink business has been leading the industry for 27 consecutive years. Cheese: in 2021, the company’s cheese business increased by more than 150% year-on-year, and launched new products such as normal temperature cheese sticks, thick cheese and thick cut cheese slices. With a strong channel network, the company realized rapid market penetration and sinking. Cold drink: Yili has been the leader in the national cold drink industry for 27 consecutive years and still maintains a strong growth momentum. In 2021q4 and 2022q1, Yili’s cold drink business is the same as + 71.8% / + 35.5%. It has the largest brand in the cold drink industry, qiaolezi, the first brand of milk ice, Zhen Xi, and the super high-end national style new brand, and the product matrix is constantly enriched. During the epidemic period, Thailand’s cold drink business grew against the trend, ranking among the top 3 in the local market. The completed Indonesian ice cream factory will further strengthen the layout of the Southeast Asian market.
Profit forecast and investment rating: we expect the company to realize a net profit attributable to the parent company of 10.502122.47/14.257 billion yuan from 2022 to 2024, with a year-on-year increase of + 21% / + 17% / + 16%, EPS of 1.56, 1.82 and 2.12 yuan / share and PE of 24 / 21 / 18 respectively. Give a “buy” rating.
Risk Tips 1) intensified market competition; 2) The demand for liquid milk is less than expected; 3) The cost of raw materials has accelerated upward; 4) The impact of the epidemic exceeded expectations; 5) Food safety risks.
