After handing in a report card of the first half year’s performance growth the day before yesterday, Yili rose and closed at 40.59 yuan / share, a record high, and its market value was close to 250 billion yuan. According to the interim performance report released by Yili, in the first six months of this year, its total operating revenue reached 47.528 billion yuan, a year-on-year increase of 5.45%; and its non net profit was 3.766 billion yuan, with a year-on-year growth of 7.02%.
It is worth noting that in the first half of the year, Yili e-commerce business achieved a high growth rate of nearly 50%. In addition to its core business, the company also launched new products for hot spots in a number of segments, including children’s formula milk powder, bubble water, sugar free soybean milk and adult cheese.
Let’s take a look at the details.
Strong recovery in the second quarter
Erie pointed out novel coronavirus pneumonia in the earnings report raised the health awareness of consumers, and brought growth opportunities for dairy products represented by health products. But at the same time, in terms of dairy consumption, consumers’ demand preference, purchasing habits and channel selection have also changed greatly, which brings new challenges to the innovation of dairy products and business models.
In order to cope with the epidemic situation, Yili actively explored new channels and new consumption scenarios, accelerated the development of new retail modes such as “member marketing” and “o2o home”, and helped the rapid recovery of business.
Data show that the company’s performance in the second quarter ushered in a strong recovery, with revenue of 26.88 billion, a year-on-year growth of 22.49%; deducting non net profit of 2.397 billion, a year-on-year increase of 79.28%. Taking stock of the whole first half of the year, Yili’s core categories are still growing against the trend.
Nielsen zero research data show that the company’s normal temperature liquid milk business retail sales share increased by 0.8 percentage points over the same period last year. The retail sales share of normal temperature yogurt, normal temperature pure milk and normal temperature organic liquid milk increased by 3.2%, 0.4% and 4.0% respectively compared with the same period of last year; the market retail sales share of low-temperature liquid milk business increased by 0.3% over the same period of last year.
Among them, the sales revenue of Yili’s key products such as “Jindian”, “anmusi”, “Changqing”, “jinlingguan” and “qiaolezi” increased by 3.6% over the same period of last year.
Xiaoshidai noted that the continuous growth of e-commerce business in recent years also contributed to Yili’s adverse growth in the first half of the year. Compared with the first half of last year, Yili’s e-commerce business grew by 49.31% in the first half of last year.
According to the “China online B2C normal temperature liquid milk research report in the first half of 2020” released by star chart data, Yili’s B2C normal temperature liquid milk business scale has gained 28.5% market share in the first half of the year, ranking first in the industry. According to Kaidu research data, as of June 2020, the market penetration rate of normal temperature liquid dairy products of the company was 84.2%, which continued to lead the industry.
Layout of new hot spots in the industry
In addition to its main business, Yili also launched new products for many hot spots in the subdivided fields, and actively arranged the big health field with the help of global innovation system and open innovation mode.
In the field of normal temperature yoghurt, low temperature liquid milk, milk powder and dairy products, Yili launched new products in the first half of the year, such as “anmusi” cheese Bobble normal temperature yogurt, “Jindian” low temperature milk, “Changqing” fiber yoghurt low temperature yogurt, “QQ star” children’s growth formula milk powder and “Miaozhi” pocket cheese adult cheese stick.
In terms of drinks, the company has also grasped the new trends of bubble water and plant drinks, and launched “Yiran” milk mineral bubble water and “plant selection” sugar free soybean milk.
It is understood that the sales revenue of Yili new products accounted for 15.3% during the reporting period.
In order to seek a broader business growth space, Yili also began to accelerate the layout of B2B business. According to the previous introduction, Yili started to formally establish a team last year to formally enter the field of professional dairy products. It mainly provides cream, butter, and mozzarella cheese chips and other dairy raw materials for b-end customers such as baking, drinks and catering.
Not long ago, Yili professional Dairy Co., Ltd. launched large-scale integrated marketing with meituan review and several baking beverage and food brands, in order to quickly open up the situation and improve brand awareness.
Achieve top 5 of global dairy industry ahead of schedule
According to the “top 20 global dairy industry” list of Rabobank in 2020, Yili Group has risen to No. 5, and it is also the only Chinese dairy enterprise to be among the top 5 in the global dairy industry.
Xiaoshidai once introduced that Yili set the goal of entering the top 5 dairy industry in 2020 in 2014. As the statistical data of this year’s “top 20 global dairy” list is based on the data of 2019, it can also be understood that Yili has achieved this goal ahead of schedule.
After the release of Yili’s financial report, CICC, CITIC Securities, Guojin securities and other institutions have maintained a “buy” rating on Yili. CITIC Securities also raised its target price for the next year to 50 yuan.
Guojin Securities pointed out in a latest research report that Yili milk powder and dairy products increased by 51.5% in the first half of the year compared with the same period last year, of which the income in the second quarter increased by 85.7%, and the accelerated development trend of domestic milk powder was clear. Westlad consolidated its contribution to the increase, while the cheese business grew rapidly. In addition, the cold drink business increased by 13.2% in the first half of the year compared with the same period last year. It is expected that the key products such as qiaolez will achieve a higher growth.
CICC also pointed out in the research report that Yili’s liquid milk income in the second quarter resumed a strong growth trend, and is expected to maintain double-digit growth in the second half of the year.
The above-mentioned research report also points out that Yili company has selected such major categories as normal temperature lactobacillus beverage, mineral water and functional beverage in the field of health drinks. “It is planned that the proportion of non milk income will reach 10% by the end of 2024”.
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