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Yili shares (600887) comment report: higher than expected performance under high base

Yili shares (600887) comment report: higher than expected performance under high base

Yili shares announced the first quarter of 2019 results and recorded revenue of 230.

800 million, +17 a year.

9%, revenue grew faster than expected and recorded a net profit of 22.

75 ppm, +8 for ten years.

36%, the growth rate fell below the market’s expected upper limit, and the overall performance exceeded expectations.

Investment points are still high growth under high base. Due to the peak of the Spring Festival, 18Q1 is actually a high base. Yili still achieved 天津夜网 a 15% + revenue growth rate, which is not easy and exceeds market expectations.

During the normal temperature, the market share was +3 per second.

0ppt, the market share of low temperature is ten years -1.

3ppt, infant milk market share +0.

5ppt.

It is estimated that the overall growth rate of liquid milk is over 16%, of which the January-February has a higher growth rate of stocking during the Spring Festival, and the growth rate in March due to a high base and channel inventory is slightly higher than the previous month.

The growth rate of the big single product An Muxi remained at 30% +, and the growth rate of the gold code + 16% +. The growth performance of each category was dazzling.

The gross profit margin increased significantly, with a gross profit margin of 40 recorded in 19Q1.

1%, ten years +0.

7ppt, as some high-end product revenue is recognized in advance to 2018, and in the case of a slight increase in raw milk costs, we believe that the main ways to improve gross profit in 19Q1 are: (1) Terminals buy gifts in January-February, and March because of freshness,The strength of buying gifts increased month-on-month, but overall was smaller than the same period of last year; (2) the product structure continued to improve, high-end products Anmuxi, Jindian still maintained a high growth rate, and under the situation of tight raw milk supply in the early stage, basic white milk increasedThe speed is average; (3) The price war for infant milk powder has decreased.

In the same period last year, due to the extension of the registration system deadline, some miscellaneous brands opened the dumping mode, and the gross profit of 18H1 milk powder was -3 per year.

1ppt, it is estimated that the vicious competition in 19Q1 decreased, and the gross profit of infant milk powder returned to normal; (4) Although the price of raw milk increased slightly, the packaging materials and other costs decreased slightly, offsetting the pressure of raw milk costs.

The expense ratio rose slightly, and the overall controllable 19Q1 sales expense ratio / administrative expense ratio (including R & D expenses) were +1 respectively.

3ppt / 0.

7ppt, the slight increase in the sales expense ratio was mainly due to the influence of the adjustment of channel inventory in March, while the management expense ratio was transmitted by the impact of the pace of the confirmation point.

Mengniu has proposed to increase fees and control efficiency this year, so it is unlikely that Yili will significantly increase the cost this year, but because the beverage is still in the supplementary period and Yili needs to widen the gap with competing products in order to gain more initiative,The possibility of a significant drop in costs is also small, and the overall probability is stable and controllable.

Earnings forecasts and estimates We expect the company’s operating income for 2019-2021 to be 894.

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, the current company is expected to correspond to 19/20 PE of 26X / 23X, taking into account the improvement of Q2-Q3 profit low base, and maintain a “buy” rating.

Risks suggest that raw milk prices rise more than expected / offline competition intensifies, and expenses exceed expectations