Yili shares (600887) company comment: improve the performance of equity incentive conditions and focus on the value of Yili’s long-term investment

Yili shares (600887) company comment: improve the performance of equity incentive conditions and focus on the value of Yili’s long-term investment

Event: The company announced the “Announcement on Adjusting Related Issues of Expanding the Stock Incentive Plan (Revision) in 2019”, which made some adjustments to the 2019 earnings stock incentive plan disclosed by the company on August 6, including but not covered:The return on net assets has increased from 15% to 20%, and a special cash dividend rate index has been added, which is not less than 70% in 2019-2023; stocks are awarded to incentive objects from 1.

8.3 billion (3% of total equity) replaced 1.

5.2 billion (accounting for total equity ratio 2).

5%) shares, paying fees from 2.

2.1 billion fell to 1.

47 trillion; the total number of incentives rose from 474 to 480.

Comments: 1.

Improving ROE goals, increasing performance conditions, and improving investor confidence Before the change in performance indicators, the two indicators of “return on net assets” and “net profit margin” were selected.

(1) Set the 2018-2023 net profit level to 8%, 18%, 28%, 38%, 48% based on the 2018 net profit; (2) Set the 2019-2023 net asset income to increase by 15%.

After the change: new cash dividend ratio indicators were added, ROE conditions were improved, and net profit growth targets remained unchanged.

(1) Set the annual cash dividend ratio for 2019-2023 to be no less than 70%; (2) Increase the return on net assets for 2019-2023 to 20%.

We believe that under the pattern of increasing industry concentration and fierce competition, the adjustment of the company’s performance conditions reflects its confidence in the company’s profitability and growth ability, as well as a high emphasis on shareholder returns.


Decrease the grant of equity, reduce the cost of incentives, and increase the EPS end date. On July 24, 2019, the company has gradually repurchased shares1.

8.3 billion shares, accounting for 3 of the company’s total share capital.

00%, the average transaction price is 31.

67 yuan / share, 1.

Of the 8.3 billion shares, 30.49 million shares will be replaced, and the company’s total share capital 杭州桑拿网 will decline correspondingly, with amortization expenses starting from 22.

1.5 billion fell to 14.

7.5 billion, amortization from 2019-2024 from 1.

69, 9.

38, 5.

32, 3.

22, 1.

81, 0.

7.4 billion expected.


49, 3.

66, 2.

23, 1.

27, 0.

5.4 billion.

In 2016-2018, the company paid 64 dividend payments.

42%, 70.

91%, 66.

07%, after deducting non-return of net assets (deduction) is 21.

25%, 22.

40%, 22.twenty one%.

We believe that the company’s optimization of equity incentive plans will help reduce costs and increase profits, and at the same time help participate in long-term interests and safeguard shareholders’ rights and interests.


The long-term growth logic remains the same, and the internationalization process is gradually progressing.From 2018, the company will unswervingly 杭州桑拿网 promote internationalization, driven by technology and talents, and rapidly promote overseas deployment. It refers to the top five global dairy companies.The revenue exceeded 90 billion yuan, and the goal of 100 billion yuan next year is in sight.

We believe that fluctuations in upstream milk sources and intensified industry competition are the main reasons for the company’s short-term performance pressure, but in the long run, as a leader in dairy products, the company has strong channel management capabilities, and its comprehensive product layout will gradually increase its market share during the competitive stageThe value of long-term investment remains unchanged.

Profit forecast: Considering the fierce competition in the industry, the price fluctuations of upstream milk sources, and the continued increase in concentration, we maintain the company’s operating income forecast. The revenue for 19-21 is 908, 1,017, and 1,109 trillion; amortization of distribution incentive costs is not considered for the time being, 19-21-year net profit was 71.

5, 82.

4, 94.

700 million, 19-19 EPS are 1 respectively.


35, 1.

55 yuan.

Taking into account the tight supply in the upstream, the leading company’s performance is more flexible, and its market share continues to increase. We give it a price-earnings ratio of 30 times for 20 years with a target price of 40.

5 yuan.

Risk reminder: Internationalization is less than expected, food safety issues, extension categories are less than expected