Consumer Staples Author：Yiru Qian Oct 31, 2023 12:22 PM (GMT+8)

The company's dominant product, liquid milk, contributed 74.74% of revenue

Milk and dairy products

Chinese dairy giant, Inner Mongolia Yili Industrial Group (Yili Group, 600887:SH), reports strong Q3 financials with revenue reaching CNY 31.109 billion, up 2.71% YoY. Net profit reached CNY 3.075 billion, surging by 59.44%, and earnings per share were CNY 0.49, reflecting a 63.33% year-on-year increase.

In the first three quarters of the year, Yili Group's revenue came close to CNY 100 billion, reaching CNY 97.009 billion, marking a year-on-year increase of 3.84%. The net profit amounted to CNY 9.38 billion, showing a growth of 16.36%.

Yili Group attributed its remarkable third-quarter profit growth to factors such as increased sales, lower material prices, reduced sales expenses, and a significant increase in the fair value of financial assets. Notably, in the third quarter of 2023, Yili Group's net fair value income was CNY 557 million, a remarkable year-on-year increase of 352.52%.

Established in 1993, Yili Group is a leading player in the Asian dairy industry. It went public in 1996, becoming the first A-share listed company in China's dairy sector. The company engages in the processing, manufacturing, and sales of various dairy products and health beverages, including liquid milk, milk beverages, milk powder, yogurt, frozen drinks, cheese, milk fat, and packaged drinking water.

Liquid milk remains the primary source of revenue for Yili Group. In the third quarter of this year, liquid milk contributed CNY 23.009 billion in revenue, accounting for 74.74% of product revenue. Revenue from milk powder and dairy products reached CNY 6.401 billion, while revenue from frozen drinks amounted to CNY 1.225 billion, and other product revenue was CNY 151 million.

Compared to the same period last year, Yili Group reported growth in revenue from liquid milk, milk powder and dairy products, frozen drinks, and other products. The "other" category witnessed a remarkable year-on-year growth of 51.77%, generating CNY 472 million in revenue. Driven by strong sales in the second quarter, revenue from frozen drinks saw a year-on-year growth of 12.86% to reach CNY 10.383 billion. Revenue from milk powder and dairy products amounted to CNY 19.922 billion, showing a year-on-year growth of 6.38%. Liquid milk, which constitutes a significant portion of the company's revenue, generated CNY 65.432 billion, reflecting a year-on-year growth of 2.07%.

Regarding sales channels, distribution channels remain the primary sales channel for Yili Group. In the third quarter, distribution channels contributed CNY 29.682 billion in revenue, accounting for a substantial 96.42%. In contrast, direct sales channels accounted for only 3.58%, with revenue of CNY 1.103 billion.

As of press time, Yili Group had declined by 0.78%, closing at CNY 27.46 a piece, with a market capitalization of CNY 174.8 billion.