研究报告全文：MN30Aug2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateYiliIndustrial600887CH2Qrevnp13alleyesoncostsavingsTargetPriceRMB3652QresultscameinslightlybelowuswithrevenueandnetprofitsgrowingonlyPreviousTPRMB40013vsCMBIeMSDgrowthforbothrespectivelyWeattributethisto1-UpDownside2929growthdeclineinliquidmilkmilkpowderrevenuewhenbothexhibitedCurrentPriceRMB266slowdownfrom1QManagementdidnotexplicitlyrevisedownthe10fullyearrevenueguidanceandlooksforwardtoseeingthebelowtohelpattaintheChinaConsumerStaplestargetTheseinclude1thecontinueddouble-digitgrowthinSatinewhenJosephWONGpremiumroom-tempmilkremainspopularamonghealth-consciousconsumers852390008382arecoveryon2Cdemandforcheeseproductsasinitiativestakenfor2Cjosephwongcmbicomhknewlaunchesand2Bconsumereducationshouldstartbearingfruit3agradualrecoveryonlow-tempSKUalongwiththeresumptionofconsumptionBellaLIhabitspost-pandemicand4theresolutionofpatentbottleneckassociatedwith85237576202bellalicmbicomhkAusnutriaWhilethesearelegitimatetoushoweversomeofthemmighttakefurthertimetomaterializeandtheimplied152HrevenuegrowthlookstobeStockDataquitechallengingtoachieveinourviewOnthecontrarycostefficiencycouldMktCapRMBmn1694629bethelastresorttoachievea9netmarginsby2025EandthetrajectorywasAvg3mthstoRMBmn881852wHighLowRMB36132524well-trackedwitha06ppdecreaseinSGAratioin1HWeremainbuyerofYiliTotalIssuedSharesmn63660SourceFactSetOthercalltakeaway1UHTyogurtisundergoingatransitionwhentheShareholdingStructuresalesofnewSKUhasnotfullycaughtupwiththeobsoleteThedeclinehasHKSCC164sequentiallynarrowedwithmomentumimprovinginJulyAugust2HohhotInvestmentCo85GoodwillimpairmentonAusnutriacouldbedetrimentalandYiliisstrivingSourceHKExitsbesttopreventthisfromhappeningExcludingAusnutriaYilideliveredSharePerformance2organicrevenuegrowthfor1H370payoutratiowillbemaintainedAbsoluteRelativeascapexcyclehasalreadypeaked-out4rawmaterialinventorywrite-1-mth-65-06offofRMB400mnwasadragto1Hnetprofitsandthesamecouldhappen3-mth-88-68in2Hasthemismatchbetweendemandandsupplyremains6-mth-126-52SourceFactSetEarningschangeWelowerour2023-24Erevenueby3eachtoreflect12-mthPricePerformanceourconcernWealsotrimourgrossmarginsby04pptoreflectthedestockingimpactfromsmallerIMFbrandsupontheenactmentofthenewlicenselegislationThesearepartiallymitigatedbya02pplowerinSGAratioandresultina2cutinour2023EnetprofitsValuationOurnewTPisbasedonanupdated210xfrompreviously240xroll-forwardedmid-24EPEwhichbenchmarksto-1sdbelowaverageSourceFactSetfrompreviouslyataverageWenowvaluebothMengniu2319HKBUYYili600887CHBUYandFeihe6186HKHOLDat-1sdbelowaverageinviewofalukewarmdairydemandamidafalteringconsumptionrecoveryRelatedreports1TsingtaoBrewery168HK2QEarningsSummaryrevnp814onrecurringstrengths29Aug2023YE31DecFY21AFY22AFY23EFY24EFY25E2CRBeer291HK1HrevEBITRevenueRMBmn1105951231711316541393211475451326Heinekengrew60-21Aug2023YoYgrowth142114695859NetprofitRMBmn87049943111067691195921336773BudweiserAPAC1876HK2Qorganicsales15overallamixbagYoYgrowth23083132120118butweseeChinastrengthagoodtrade-4Aug2023EPSRMB1415171921ConsensusEPSRMBnana1720234KweichouMoutai600519CH2QRevNP204210aspre-announcedPEx291239159142127-3Aug2023PBx51433129305YiliIndustrial600887CHFull-yearYield2429485461guidanceunchanged-20Jul2023ROE223193207221234NetgearingNetcash453322NetcashSourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk30Aug2023Figure1EarningsrevisionNewOldDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue131654139321147545135090143869153303-25-32-38GrossProfit419264472247735435234668550099-37-42-47EBITDA151491707119138152621697218958-070609Netprofit106771195913368108561196413292-170006GrossMargin318321324322324327-04ppt-03ppt-03pptEBITDAMargin11512313011311812402ppt05ppt06pptNetMargin81869180838701ppt03ppt04pptSourceCMBIGMestimatesFigure2CMBIGMestimatesvsconsensusCMBIGMConsensusDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue131654139321147545133541145223157937-14-41-66GrossProfit419264472247735437174809452830-41-70-96EBITDA151491707119138166161919021433-88-110-107Netprofit106771195913368107731255714355-09-48-69GrossMargin318321324327331335-09ppt-1ppt-11pptEBITDAMargin115123130124132136-09ppt-1ppt-06pptNetMargin8186918186910ppt-01ppt0pptSourceBloombergCMBIGMestimatesFigure3Yili-12MforwardPEchartFigure4Yili-12MTrailingPBchartx1-yrfwdPELTaveragex1-yrtrailingPBLTaverage39-2SD-1SD120-2SD-1SD361SD2SD1051SD2SD33309027752421601845153012Feb18Feb19Feb20Feb21Feb22Feb23FebAug18Aug20Nov21AugNov18Nov19Aug19Nov20Aug21Nov22Aug22Nov23AugMay19May22MayMayMay18May20May21May23Feb18Feb19Feb20Feb21Feb22Feb23FebNov18Nov19Nov20Nov21Nov22NovAug19AugAug18Aug20Aug21Aug22Aug23AugMay19May20May21May22May23MayMay18MaySourceBloombergCMBIGMestimatesSourceBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE230Aug2023FinancialSummaryINCOMESTATEMENT2020A2021A2022A2023E2024E2025EYE31DecRMBmnRevenue96886110595123171131654139321147545Costofgoodssold674537641783119889359376098921Others547664742793839889Grossprofit288863351539311419264472247735Operatingexpenses209232458429914310033234133761Sellingexpense168841931522908243562521726263Adminexpense388348286164592462696640Others156442841722855859Operatingprofit796389309397109231238113974Otherincome796389309397109231238113974EBITDA104061191913484151491707119138Depreciation222328733744401044584913Otheramortisation220115343216232250EBIT796389309397109231238113974NetInterestincomeexpense18829255685714754Otherincomeexpense8621153979654640625Pre-taxprofit81501011210630122631373615353Incometax105113801312151316951895Minorityinterest2127113728191Netprofit707887059431106771195913368Grossdividends4988614466318223921010295BALANCESHEET2020A2021A2022A2023E2024E2025EYE31DecRMBmnCurrentassets283815015561463632546483167244Cashequivalents116953174233853343683486936131Restrictedcash34003000Accountreceivables187522333450368839034133Inventories7545891714836158741673617657Othercurrentassets726368629321932493249324Non-currentassets427745180769502730067622279100PPE287682937933735361743823139974InvestmentinJVsassos342347185175607569757875Intangibles189716094648481350725307Othernon-currentassets86851610225944259442594425944Totalassets71154101962130965136259141052146344Currentliabilities347684329662170649376690069028Short-termborrowings69571259626799267992679926799Accountpayables179751406216807179831895820002Othercurrentliabilities98361663818563201552114222227Non-currentliabilities5853987514653146531465314653Long-termborrowings513753809298929892989298Othernon-currentliabilities71644955354535453545354Totalliabilities406225317176822795908155383681Sharecapital431151495325532553255325Retainedearnings235412429827587300413279035862Otherreserves25321826217356173561735617356Totalshareholdersequity303844770850268527225547158544Minorityinterest14910833875394840294119Totalequityandliabilities71154101962130965136259141052146344PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE330Aug2023CASHFLOW2020A2021A2022A2023E2024E2025EYE31DecRMBmnOperatingProfitbeforetaxation81501011210630122631373615353Depreciationamortization244229884087422646905164Changeinworkingcapital468456444391100100108Others542580713094151316951895Netcashfromoperations98521552813420148751663018514InvestingCapitalexpenditure652266836646682970067142Acquisitionofsubsidiariesinvestments2200000Others2543111412868900900900Netcashfrominvesting9043779719514772979068042FinancingDividendpaid498849886144663182239210Netborrowings51222433918000Sharerepurchases24816047906000Others42864411913000Netcashfromfinancing47119458781663182239210NetchangeincashCashatthebeginningoftheyear113251169531742338533436834869Exchangedifference39529580000Cashattheendoftheyear116923134233850343683486936131GROWTH2020A2021A2022A2023E2024E2025EYE31DecRevenue74142114695859Grossprofit131160173676767Operatingprofit10912152162133129EBITDA139145131123127121EBIT10912152162133129Netprofit2123083132120118PROFITABILITY2020A2021A2022A2023E2024E2025EYE31DecGrossprofitmargin298303319318321324Operatingmargin828176838995EBITDAmargin107108109115123130ReturnonequityROE250223193207221234GEARINGLIQUIDITYACTIVITIES2020A2021A2022A2023E2024E2025EYE31DecNetdebttoequityx000300000000Currentratiox081210101010Receivableturnoverdays7174102102102102Inventoryturnoverdays408426652652652652Payableturnoverdays973672738738738738VALUATION2020A2021A2022A2023E2024E2025EYE31DecPE295291239159142127PEdiluted295277244162145130PB695143312930Divyield242429485461SourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE430Aug2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBISwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE5