研究报告全文：21Feb2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateYiliIndustrial600887CHSharescouldrallyinreliefonbackofaninlineBUYMaintain4Q22TargetPriceRMB440PreviousTPRMB415WeseetradingopportunityonYiliintoresultsseasonThiswouldmainlybeUpDownside403underpinnedby1aneasyandstabilizingearningsexpectationforboth4Q22CurrentPriceRMB313and2023EwhenweseesubdueddownsiderisktocurrentconsensusestimatesChinaConsumer-and2alaggingvaluationtopeerswhohavealreadybeenre-ratedonreopeningFoodandbeveragessentimentWearguethestockcouldplayneartermcatch-upwhenalikelyinline4QcouldrelievemarketsentimentWearebuy-ratedonYilibutprefertoJosephWongsticktoCRBeer291HKBuyProya603605CHBuyandCTGDF601888CH85239000838Buyasourpreferredplaysaroundthisearly-stagedconsumption-ledrecoveryjosephwongcmbicomhk4Qmomentumshowedsequentialpick-upWeforecast4QrevenuetoStockDatagrow6YoYtoRMB27bnMomentuminOctoberandNovemberhasbeenMktCapRMBmn197087weakandamoreobviousrecoveryhaskicked-ininDecemberThiswasAvg3mthstoRMBmn1259drivenbyaccelerationofliquidmilkdemandasaresultofhealthyrestocking52wHighLowRMB412245TotalIssuedSharesmn6399momentumfortheCNYinJan2023GPMislikelytoshowQoQimprovementSourceWindthankstohighergiftingdemandthatimprovedsalesmixOpexratiowilldeclineYoYwithoutmucheventfulspendingwinterOlympiclastyearShareholdingStructureHKSCC179MeanwhileweexpectaflattishNPMat8for2022HohhotInvestmentCo84PanGang452023EoutlookOverallweexpectrevenuegrowthtoedgeupfrom2022ESourceWinddrivenbyacceleratedliquidmilksalesfromflattishin2022toabout5growthin2023EIMFbusinessshouldremainhigh-growthbutfromahighSharePerformancebaseof2022weasserta25YoYgrowthforthesegmentThisisconsistentAbsoluteRelative1-mth-25-19withmanagementtargetofa204-yearCAGRbetween2021-25EWhile3-mth80-10birthratelookstohavetroughedwedonotexpectittorebounduntillate-23E6-mth-118-121InthiscasegivenamutedsegmentgrowthwewouldexpectYilitotakeupSourceWindmarketsharefrompeersForinstanceYilitookup11ofthemarketbyend-12-mthPricePerformance22comparedto9in2021Separatelylow-tempSKUcouldmaintaina25-RMB30YoYgrowthandweconsiderthetemperatureofsummerthisyearthe500600887CHSHSZ300rebasedmajorswingfactortoourassumption400300EarningschangeOur2022EestimatesarelargelyunchangedWehave200loweredour2023EGPMby04ppandthisledtoa42cutinnetprofits100NowweassumeYilisnetmarginstoexpandbyanaverageof05ppover00Feb-22May-22Aug-22Nov-222023-24EandthislargelytallieswithmanagementsexpectationSourceBBGValuationOurnewTPisbasedonanunchanged250xrolled-forwardend-23EPEwhichstillbenchmarkstoits3-yearaverageWebelieveourmethodologyRelatedreportsappropriatelyreflectsYilissequentialrecoverythatbeginsfrom4Q221KweichowMoutai600519CHEarningsSummaryProxyofChinasconsumption-ledrecovery6Feb2023YE31DecFY20AFY21AFY22EFY23EFY24E2ChinaConsumerPositiveRevenueRMBmn96886110595133919147030121017takeawayfromFBdistributorsYoYgrowth741429410798butsectorsbull-runcouldtakeaNetincomeRMBmn7078870596411149113453breatherfromhere-31JanEPSRMB12141619222023YoYgrowth20230341921713CRBeer291HKAnothernana161922ConsensusEPSRMBpositiveyearfor2023ourPExnana212178152preferredpickforChinasre-PBxnana383633opening22Jan2023Yieldnana344350ROE233182190214236Netgearing13netcashnetcashnetcashnetcashSourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk21Feb2023Figure1EarningsrevisionNewOldDiffRMBmnFY22EFY23EFY24EFY22EFY23EFY24EFY22EFY23EFY24ERevenue1210171339191470301210171338801505370000-23GrossProfit37925433874888837925439675081100-13-38EBITDA13327162651901413327168542012600-35-55Netprofit964111491134539641119961441500-42-67GrossMargin3133243333133283380ppt-04ppt-05pptEBITDAMargin1101211291101261340ppt-04ppt-04pptNetMargin8086918090960ppt-04ppt-04pptSourceCompanydataCMBIGMestimatesFigure2CMBIGMestimatesvsconsensusCMBIGMConsensusDiffRMBmnFY22EFY23EFY24EFY22EFY23EFY24EFY22EFY23EFY24ERevenue121017133919147030122453140146150047-12-44-20GrossProfit379254338748888389524551849725-26-47-17EBITDA133271626519014139781649218974-47-1402Netprofit9641114911345394131113013022243233GrossMargin313324333318325331-05ppt-01ppt01pptEBITDAMargin110121129114118126-04ppt04ppt03pptNetMargin80869177798703ppt06ppt05pptSourceCompanydataCMBIGMestimatesFigure31-yearforwardPEchartFigure4TrailingPBchartxx1-yrfwdPELTaverage1-yrtrailingPBLTaverage38-2SD-1SD120-2SD-1SD1SD2SD351SD2SD105322990267523602017451430Jul19JulJul20Jul21Jul22JulApr20Apr22OctOct18Oct19Apr19Oct20Oct21Apr21Oct22AprJan21JanJan19Jan20Jan22Jan23JanJul19Jul20Jul21Jul22JulOct21OctOct18Oct19Apr19Oct20Apr20Oct21Apr22Apr22OctJan20JanJan21Jan22Jan23Jan19JanSourceBloombergCMBIGMestimatesSourceBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE221Feb2023FinancialSummaryIncomestatementCashflowsummaryYE31DecRMBmnFY20AFY21AFY22EFY23EFY24EYE31DecRMBmnFY20AFY21AFY22EFY23EFY24ERevenue96886110595121017133919147030Netincome7078870596411149113453Liquidmilk7612384911836378781992210DA24422988325236884104Others2076225685373804610054820Changeinworkingcapital468455186353353359Others435393525057993Grossprofits2888633515379254338748888Netcashfroperatingact98521552860351490417290DA24422988325236884104Capexinvestments65226683763868457027Sellingexpense1688419315217832410526465Acquisition22----Administrationexpenses38834828556761606910Others25431114900900900Otheropexpense22862547275231433502Netcashfrinvestingact90437797853877457927EBIT79638930100751257714910Equityraised24816047---EBITDA1040611919133271626519014ChangeofDebts5122588224001600-Dividendpaid49884988591367728570Financecostsnet188294049980Others4284996---Investmentgainsloss12701271100010001000Netcashfrfinancingact4711945831383728570Non-operating408118250277304Preincomeexpense-taxprofit815010112112291339915686Netchangeincash76219676108161213793Cashatthebeginningofthe1132812095317422092619713Incometax10511380153318292141Exchangeyeardifference39529---LessMinorityinterests2127557993Cashattheendoftheyear1169531742209261971320506Netprofit7078870596411149113453Lesspledgedcash-----BalancesheetKeyratiosYE31DecRMBmnFY20AFY21AFY22EFY23EFY24EYE31DecFY20AFY21AFY22EFY23EFY24ENon-currentassets4277451807577676182465647SalesmixPPEFixedassets2876829379335603667539483Liquidmilk786768691656627Goodwill18971609248725302644Others214232309344373Investments34234210511060106910Othernon-currentassets868516610166101661016610PLratiosGrossmargin298303313324333Currentassets2838150155429124306245246Operatingmargin82818394101Cash1169531742209261971320506Pre-taxmargin849193100107Accountreceivable18752107331636694028Netmargin7379808691Inventory75458917112831229213323Effectivetaxrate129136136136136Othercurrentassets72667388738873887388BalancesheetanalysisCurrentliabilities3476843296401774218344678Currentratiox0406050505Borrowings695712596113961059610596Netreceivabledays7170100100100Accountpayables1797514062112831229213323Inventoryturnoverdays408426500500500Otherpayables983616638174971929520759Netpayabledays973672500500500Netdebttoequity13NetcashnetcashnetcashnetcashNon-currentliabilities58539875867578757875Borrowings51375380418033803380ReturnsOthernon-currentliabilities7164495449544954495ROE233182190214236DividendyieldNANA334249Commonstock60836400651365136513Retainedearnings2354124298271663008733506PershareMinorityInterest1491083113812171310EPSRMB1214151821DPSRMB0810101315Totalnetassets3053348791518285482858340BVPSRMB5078838894Shareholdersequity3038447708506905361157030EVEBITDAxNANA14912293SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE321Feb2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBIGMwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE4