Yili (600887) Commentary Report: Q4’s beautiful ending will continue to grow steadily next year

Yili (600887) Commentary Report: Q4’s beautiful ending will continue to grow steadily next year

Yili recorded total income of 789 in 2018.

800 million, +16 a year.

9%, net profit attributable to mother was 64.

4 yuan, +7 per year.

3%, revenue was in line with expectations, and profits slightly exceeded expectations.

Among them, Q4 recorded a revenue of 1.81 million yuan in a single season, +17 a year.

6%, recorded a net profit of 13.

9 trillion, ten years +30.

8%.

The company plans to distribute a cash dividend of 7 yuan for every 10 shares.

Key points of investment Q4’s beautiful closing was mainly due to the low base last year + the advance of the Spring Festival, 18Q4 revenue, and profit growth exceeded market expectations.

Compared with the brakes at the end of 2017, it is different from the 18Q1 Spring Festival. In Q4 last year, Yili proactively adjusted its product strategy and actively promoted the sales of non-Chinese New Year hot products such as walnut milk, Wei Kezi, and plant selection before the Spring Festival schedule.The product freshness was managed in December, and the sprint for the Spring Festival Prosperous Anmuxi and Jindian began at the end of December. Along with the balanced development of various product categories, Q4 revenue grew at a high rate.

The ten-year growth rate of Q4 profits far exceeded the growth rate of income, mainly due to the extension of high gross profit and cost control.

Q4 single season gross margin +2 per second.

8ppt, far exceeding market expectations, we believe that in the case of rising raw milk prices, Q4 single season gross margin increase and shift (1) after the peak of the Spring Festival, some high-end product revenue advanced to the end of December, driving up the overall gross profit; (2)Q4 also began to release target protein beverage products with higher gross profit margins; (3) Starting from October 17th, some dairy companies’ offline expenses decreased, and Yili’s follow-up affected the gross profit level, and 18Q4 slowed down; (4)The impact of falling prices of some packaging materials.

At the same time, Q4 single season sales / administration expense ratio increased by +0.

6ppt / -0.

5ppt, cost is properly controlled.

西安耍耍网 Each category has a high growth rate in 2018, and continued to grow steadily in 19 years. In 2018, liquid milk / milk powder / cold beverage income increased by +17 respectively.

8% / 25.

1% / 8.

5%, sales increased by +11.

2% / + 15.

8% / + 2.

7%, the average price is +5 per year.

9% / + 8.

0% / + 5.

6%, thanks to the increase in the proportion of high-end products, and the product structure has improved significantly.

It is estimated that Anmuxi’s revenue in 2018 will increase by + 30-35%, excluding taxes of about 13.5 billion, and the revenue of gold code will exceed + 25%, excluding taxes of about 9 billion, which will help Yili’s 2018 room temperature milk market share increase by +2.

3ppt to 36.

8%.

The company’s revenue-side target for 2019 is 90 billion yuan, +13 for the year.

2%, mainly still under the push of large single products, as well as the new products, and the volume of plant selection.

The gross profit margin was slightly reduced, and the cost was properly controlled and trapped by the increase in the price of raw milk. The company’s overall gross profit margin in 2018 is estimated to be -0.

3ppt, in which the liquid milk direct raw material unit price exceeds +5.

9%, hedging the dividend of some high-end products, we expect that the price of raw milk will increase moderately in 2019, and the cost of packaging materials will slightly shift, and the overall gross profit margin in 2019 will probably be flat in 2018.

Due to the increase in advertising costs in 2018, the sales expense ratio was +2 for half a year.

1ppt, while the management expense rate benefits from the supplement of employee compensation, -1 per year.2ppt, boosting profit growth faster than expected.

The company plans a total profit of USD 7.6 billion in 2019, which is basically the same as the total profit in 2018. It is expected that the main goal is to achieve the sales target of USD 100 billion in 2020. The short-term expenses will be significantly reduced.

Earnings forecasts and estimates We expect the company’s operating income for 2019-2020 to be 894, respectively.

300 million / 992.

900 million / 1,073.

500 million, each year +13.

24% / 11.

02% / 8.

12%, net profit to mother is 71.

300 million / 81.

200 million / 92.

1 trillion each year +10.

5% / 14.

0% / 13.

4%, corresponding to EPS 1.

17 yuan / 1.

33 yuan / 1.

51 yuan, currently the company expects corresponding 19/20 PE of 23X / 20X, maintaining the “Buy” rating risk indicates that raw milk prices have risen more than expected / offline competition has intensified, and expenses have exceeded expectations