original / Northeast Food and Beverage Li Qiang team
finishing / discussion bar
1. The dairy industry has entered a growth period since 1998, and has formed a double-leading pattern of Yili Mengniu.
my country's dairy industry was a start and development stage before 1997. In 1998, it began to rapidly expand with the help of Tetra Pak's sharp tools industry and entered a high growth stage. The melamine incident in 2008 led to a crisis in the industry. Subsequently, the government issued various policies to regulate the development of the industry. With dairy companies continuously strengthening the construction of milk sources, industry demand has gradually recovered, and the industry is still in a growth period after transformation.
has been chasing and surpassing for more than ten years, and Yili Mengniu's fighting has rekindled.
After the organizational structure adjustment under the leadership of Lu Minfang in the second half of 2017, Mengniu took the lead in increasing the investment on the ground, and Yili responded passively and opened a new round of competition between the two heroes. In 2018Q1, Mengniu weakened offline promotion and increased online advertising investment. Yili comprehensively strengthened its online and offline marketing efforts and proactively initiated offline promotion. Yili invested more expenses to increase revenue growth, and net profit growth declined more.
2. The increase in milk prices affects the gross profit margin by about 2%, and the structural upgrade of dairy companies offsets part of the pressure of rising costs.
The number of dairy cows in my country and the production of raw milk fell by 6% and 1.59% respectively in 17 years. With high breeding costs and low milk prices, the willingness to replenish ranches has weakened. The number of domestic dairy cows will continue to decline due to high cattle scouring rates, and it is difficult to increase yields slightly. Change the trend of declining raw milk production. We judge that the price of raw milk has risen moderately in 19 years. Assuming that the increase is between 2%-12%, the sensitivity analysis shows that the price increase of raw milk will affect Yili's cost change by 3.3%, gross profit margin change by about 2%, and Mengniu milk price Higher is therefore relatively less affected. During the two historical periods of raw milk price increases, Yili Mengniu passed on costs through direct price increases, and there was no obvious linear relationship between milk price increases and cost changes. In the context of slowing macroeconomic growth, we judge that Yili Mengniu will find it difficult to transfer the impact through direct price increases under this round of raw milk price increases. The high-end upgrade of Shuangxiong's products is expected to offset part of the pressure of rising costs. When Yili's ton price increases by 2%, the overall gross profit margin will increase by 1.22%. When the milk price rises, the gross profit margin will be affected by about 1%, and the overall impact is controllable.
3. Yili's cost-effectiveness ratio is lower, and the main brand's high market share in 19 years is expected to maintain or weaken slightly.
This round of competition doubles have increased their expenditures, and Yili Mengniu's revenue and market share have increased significantly. In 2018H1, Yili Mengniu's sales expense ratio increased by 2.63% and 4.83% year-on-year, bringing revenue up 19.25% and 17.25 year-on-year, respectively. %, UHT milk market share increased by 2.4% and 0.2% year-on-year respectively. Yili has achieved more revenue growth and market share increase with a relatively small amount of expenditure in the expenditure investment, and has more competitive advantages. In terms of future expenditures, we compare the market share of Yili Mengniu by category to analyze the competition and the intensity of expenditures. The sum of the market share of Yili Mengniu in the room temperature yogurt and high-end white milk industries is more than 70%, and the marginal benefit of fee investment is diminishing. In the room-temperature yogurt segment, Anmushi has a larger lead, and Mengniu’s short-term large expenditures are difficult to close the gap. In the high-end white milk category, Jindian gradually grabs market share with its low-price strategy and narrows the gap with Deluxe. It is expected in 2019 The annual sales expenses are expected to be maintained or slightly weakened.
Core point of view: is optimistic about Yili shares and predicts that the EPS in 2018-2020 will be 1.07 yuan, 1.24 yuan and 1.51 yuan respectively.
risk reminder: food safety risks, demand recovery is not up to expectations
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