Revenue side: high-end bright at room temperature, fresh milk at low temperature continues to improve, and the cheese boom continues. 1) Normal temperature milk: under the impact of the epidemic, dairy products show the property of just need, and the high-end performance is bright under the structural upgrading. In 2021, Yili Normal Temperature white milk Jindian organic increased by 41.5% and the market share reached 51.4%; Shuhua milk’s medium and high-end functional products continued to expand the segments, with a year-on-year increase of nearly 30%. Normal temperature yoghurt launched a new amx sugar free series, driving the market share to increase 2pcts to 65.2%. Mengniu’s normal temperature milk increased by nearly 16% at the same time, of which the basic white milk / terentsu increased by 23% / 33%, maintaining double-digit strong growth for five consecutive years. 2) Low temperature milk: low temperature fresh milk has a good growth momentum. In 2021, the growth rate of Yili low-temperature fresh milk exceeded 250%, reaching 14 times that of the industry; Mengniu’s net income of fresh milk increased by 85% at the same time, and its market share increased from 11.1% in 2020 to 13.4%, of which daily fresh language increased by 80%. Among the regional low-temperature dairy enterprises, Guangming and New Hope Dairy Co.Ltd(002946) achieved double-digit growth in 2021. 22q1 showed differentiation due to the impact of the epidemic, Guangming increased by 4% and New Hope Dairy Co.Ltd(002946) increased by more than 15%. 3) Milk powder: in the golden period of localization development, the proportion of leading cities has accelerated. In 2021, the growth rate of Yili infant formula milk powder ranked first, the market share increased by 1.4pcts, and the revenue of jinlingguan exceeded 10 billion yuan. In 2021, the income of Feihe infant formula milk powder was 21.5 billion yuan, a year-on-year increase of + 22%. 4) Cheese: the industry maintained a high outlook and Shanghai Milkground Food Tech Co.Ltd(600882) continued to increase. In 2021, Shanghai Milkground Food Tech Co.Ltd(600882) revenue reached 4.5 billion yuan, a year-on-year increase of + 57%, ranking first with a market share of 27.7%. In 2022q1, the revenue was 1.29 billion yuan, with a year-on-year increase of + 35%. Under the repeated local epidemics, the trend of high growth continued.
Profit side: structural upgrading + cost optimization, leading dairy enterprises perform better. 1) Gross profit margin: raw milk prices are running at a high level, and Yili and Mengniu have stronger cost control power. In 2021, the price of raw milk increased by 6.3% year-on-year. Yili and New Hope Dairy Co.Ltd(002946) through the upgrading of product structure and other measures, the gross profit margin increased year-on-year in 2021, and the gross profit margin of Guangming improved year-on-year in 2022q1 Shanghai Milkground Food Tech Co.Ltd(600882) as the raw materials are mainly imported cheese, the gross profit margin is significantly improved due to the superposition of hedging locking and structural optimization. 2) Expense rate: the industry competition slowed down, and the net interest rates of Yili and Mengniu improved year-on-year. In 2021, the gross sales difference between Yili and Mengniu was + 0.4 / + 0.8pcts year-on-year, and the management expense ratio was – 0.2 / – 0.1pcts year-on-year. Under the condition of cost reduction and efficiency increase, the profit elasticity was continuously released, and the net interest rate increased by 0.6/1.0pcts. Yili reached a record high of 2022q1, and the net interest rate was confirmed in advance. Low temperature milk zhongguangming, New Hope Dairy Co.Ltd(002946) 2022q1 net profit margin + 1.4 / + 0.2pcts year on year Shanghai Milkground Food Tech Co.Ltd(600882) 2022q1 net interest rate increased by 2.1pcts.
Outlook: the demand boom continues, and the leading dairy enterprises are preferred. 1) Income side: dairy enterprises in areas affected by the epidemic enjoy the same amount and price and structural upgrading dividends. Although the epidemic situation has been repeated, considering the marginal improvement of blocking points at the supply side, the increase of milk consumption scenes and the continuous strengthening of residents’ health awareness, the demand side of dairy products is expected to continue the high boom since 2020. 2) Profit side: the cost pressure has improved month on month + the industry competition has slowed down, and the profit elasticity can be expected. The price of raw milk in 2022q1 has dropped by 0.88% year-on-year. Under the restriction of feed cost, the price of raw milk in the whole year is expected to be mainly volatile, and the time of maximum pressure may have passed. Historical experience shows that under the high cost pressure, the promotion price war of dairy enterprises has slowed down, and under the multiple combination of structural upgrading, competition slowing down and management optimization, the profit side growth rate may be higher than the income, continuously releasing the profit elasticity. 3) Structural end: low temperature milk sees the national expansion, cheese sees the launch of new products, and milk powder sees the localization process New Hope Dairy Co.Ltd(002946) market share has maintained growth for 12 consecutive months, and the market share ranks among the top three in China. It is a regional dairy enterprise with the largest increase in share. Miaoke launched “normal temperature cheese stick + cheese slice”, which is expected to contribute incremental dividends. Yili’s acquisition of Aoyou will jointly layout the high-end infant powder market with its own brand jinlingguan. Feihe actively promoted the fresh strategy, increased channel cost investment and cargo age management, maintained price stability and continuously consolidated the leading position of milk powder.
Risk tip: the epidemic repeatedly affects production and transportation, the price of raw materials fluctuates sharply, food safety problems and intensified industry competition.
