Author: Its exchange

running all the way-Yili shares

Most people believe a truth: if you take too big a step, you will easily pull your eggs. But everyone hopes that the companies they invest in are thriving and striding forward.

how to tell the difference between "striding like a meteor" and "striding too hard"?

after reading the annual report of Yili repeatedly, I have this question. With this question, let's analyze it together. If there is anything inappropriate, I hope you can point it out and let's discuss it together. Let's draw a conclusion first: Yili shares are better than its biggest competitor, Mengniu Dairy, and its growth potential is still huge.

The article is divided into three parts:

1. The growth of Yili dairy industry;

2. The operating foundation of the enterprise;

3. Are these four phenomena bad omen?

4. Summary

The text begins.

I. the growth of Yili dairy industry

There are many rivals who have achieved mutual success in the business world. We are familiar with Coca-Cola and Pepsi, KFC and McDonald's, as well as Yili and Mengniu Dairy. There are two kinds of enterprises worthy of long-term investment. The first type: this company has no rivals in the main industry, such as Tencent and Didi.

second: this company is always a little better than its biggest competitor in the industry. Imagine that feeling, the two companies are extremely similar, and even the products of the two companies are sold together! However, when you read their financial reports, you will obviously feel that one of them is better.

we think Yili shares belong to the second type of enterprise. Everyone knows that there are two giants in china dairy: Yili and Mengniu. Then let's compare the growth of these two companies.

1. Revenue and profit, as shown in the following table:

The income gap between Yili and Mengniu Dairy has reached 2.8 billion after the epidemic in 22, from 6.8 billion in 216. Mengniu Dairy's gross profit margin is higher than Yili's, but the net profit attributable to the parent company is twice as small as Yili's! The compound annual growth rate of operating income from 215 to 22 is 8.21% for Yili and 7.59% for Mengniu Dairy.

Similarly, the compound annual growth rate of net profit attributable to the parent company is 7.32% for Yili, 11.64% for Mengniu Dairy from 215 to 219 and 6.86% for 22.

except for the epidemic situation, the compound growth rate of Mengniu Dairy's net profit is higher than that of Yili, and its gross profit margin is also better than Yili. However, the gap between operating income is getting bigger and bigger, resulting in a net profit gap of 2.265 billion in 215 and 3.553 billion in 22, with a compound annual growth rate of 7.53%.

From the data of these six years, it is inferred that Yili shares will maintain a more stable growth than Mengniu Dairy in the future. Because in 219, the per capita consumption of dairy products in China was equivalent to 35.8 kilograms of raw milk; According to the data of USDA, the per capita consumption of dairy products in the United States in 219 was about 16 kg; According to the statistics of the Japanese Ministry of Agriculture, Forestry and Fisheries, the per capita consumption of dairy products in Japan in 219 was 95.4 kg; China's per capita consumption of dairy products still has much room for improvement. Therefore, the growth potential of dairy giants is still relatively large.

2. Comparison among products

The gross profit rate data of Mengniu Dairy's three product lines were not found in the annual report. Among them, the decrease of milk powder business income of Mengniu Dairy in 22 is caused by the sale of Junlebao. We can clearly see that Yili shares are significantly ahead of Mengniu Dairy in every product line. Especially for the two product lines of cold drinks and milk powder, the income gap has more than doubled (the sum of the two products leads by 11.9 billion yuan). Especially in the cold drink industry, the compound annual growth rate of Yili shares reached 7%, but Mengniu Dairy has been standing still for six years.

From the table above, it is debatable whether the milk powder business is a good business. However, at present, after China's national self-confidence is enhanced in 22, Feihe milk powder will rise strongly and surpass Nestle's 17.2% market share to get the first place. Then, will the golden collar of Yili shares erode the market share of more foreign brands? Moreover, the central media has been promoting domestic milk powder recently.

Generally speaking, we think that Yili has developed the cold drink and milk powder business very well while grasping the main business of liquid milk. The gap between Mengniu Dairy and Yili in these two businesses is getting bigger and bigger.

3. Construction in progress and fixed assets

Since 219, the investment of the two companies in their own hardware has started to widen. At present, Yili shares have the ability to invest more than Mengniu Dairy. Judging from the projects under construction, Yili shares are more optimistic about the future. Mengniu Dairy is more conservative.

So, is it reasonable that Yili shares are twice as many as Mengniu Dairy's projects under construction? At present, the operating income of Yili shares is about 1.27 times that of Mengniu Dairy, and the profit gap has doubled. If we first look at the figure that the revenue gap between the two companies has reached 2 billion, and then look at the investment amount of the two companies in the projects under construction, it will feel much more reasonable.

4. Is it necessary to raise 13 billion yuan?

Let's look at the projects that need to be invested (unit: 1, yuan)

Liquid milk invested 8.9 billion, accounting for 49.34% of the total investment, and milk powder invested 2.12 billion, accounting for 11.71% of the total investment. Liquid milk is 5.9 times the revenue of milk powder, and the input is 4.2 times. At present, the company's projects under construction have a liquid milk budget of 11.5 billion, and the completion progress is 77.41%. The budget of the milk powder project under construction is 2.138 billion yuan, and the completion progress is 36.11%. The cost of liquid milk under construction is 5.38 times that of milk powder under construction. At present, the impact of mineral water project on income is too small, and I have gone to several supermarkets nearby, but I have not found Yike Huoquan and Yiran.

With reference to the investment scale of the projects under construction of Yili, there is not much difference between the amount of 13 billion yuan to be invested in liquid milk and milk powder projects. We calculated that after the new liquid milk and milk powder projects are fully put into production, the new liquid milk production capacity will be 2,244,2 tons/year. In 22, the output of liquid milk in Yili will be 8,861,824 tons. It is equivalent to an increase of 25% in production capacity. The capacity of milk powder increased by 36,5 tons, and the output of milk powder in 22 was 223,464 tons, an increase of 16.3%. If we remove the impact of the epidemic, the compound annual growth rate of liquid milk of Yili shares is about 1%. After removing the influence of the newly acquired Westland Dairy, the compound annual growth rate of milk powder is about 1%. These new capacity can be digested.

we believe that "digital transformation and information upgrading project" is very necessary, and enterprises can realize more refined and scientific management, production and sales through digital transformation. If we don't do it now, it will be more and more backward in the future.

the biggest doubt is that the dividend amount of Yili in 22 is 4.988 billion, accounting for 7.47% of the net profit attributable to ordinary shareholders of listed companies in the consolidated statements. Why doesn't the company choose to pay less dividends and then invest? Instead, choose a non-public offering to raise funds? Is it in this roundabout way to increase the shareholding ratio of some people? From another point of view, if this is the case, it is actually good for the long-term development of the company.

second, the operating foundation of the enterprise

now let's look at the operating data of Yili shares through the financial report.

1. Debt repayment ability (unit: 1 million)

According to the current data, the company has certain debt repayment pressure. The company's largest US dollar bond of RMB 3.262 billion will not expire until 225. It is calculated that the short-term interest-bearing debt in 22 is about 1.289 billion. The pressure is still great. From this point of view, it is necessary for the company to raise funds. However, the financial cost of Yili shares is not high, and the sudden increase this year is caused by exchange losses.

In 218, 219 and 22, the total dividend of Yili shares was 14.156 billion yuan, accounting for 69.21% of the net profit attributable to ordinary shareholders of listed companies. Why not use it to reduce debt? Dividend 3% like many other companies, and the remaining 8.2 billion yuan will be used to pay off debts, so I think it is in the interests of the majority of small and medium shareholders of the company.

The company issued 5 million US dollars of bonds, if the 5 million US dollars are converted into RMB. Moreover, the RMB should appreciate against the US dollar for a long time. So do you still make money after five years? I'm imagining it.

conclusion: the debt pressure of Yili shares is still relatively large. Mengniu Dairy is actually under greater debt pressure than Yili. The total amount of interest-bearing banks and other loans in the annual report was 18.752 billion in 22 and 23.655 billion in 219. Mengniu's cash and bank balance is 11.397 billion, which is similar to Yili.

2. A bird's eye view of cash flow statement (unit: 1 million)

The basic operating conditions of the company should be good. However, the balance of cash and equivalents at the end of the period has been decreasing for three consecutive years. In 22, the net cash flow of financing activities is only -.47 billion, and it is accompanied by the increase of debt. The money borrowed in 217 has not only been spent, but by 22, there will be more and more debts. It seems that it really needs 3.86 billion of the raised funds to supplement the working capital and repay the bank loan project.

Through the comparison of the above tables, we can intuitively see that Yili shares are obviously better than Mengniu Dairy. The investment in the past seven years is about 3 billion less than that of Mengniu Dairy. The net financing is that Yili's net expenditure is close to 2 billion, and Mengniu Dairy's net income is 11.163 billion, one is a milking cow and the other is a nursing cow. The gap between net cash flows from operating activities has been increasing in recent three years.

summary: the company's operating conditions are good, but the investment is getting bigger and bigger, resulting in more and more liabilities. Cash flow is tight. But it is much better than Mengniu Dairy.

3. Basic data of operational capacity

On the whole, Yili shares are a little better than Mengniu Dairy, and Yili shares can use other people's money to develop themselves. Only the inventory turnover days are slightly worse than Mengniu Dairy. Judging from the data of these seven years, the operation of Yili shares has remained stable. And, better than their biggest competitors.

third, are these four phenomena bad omen?

when reading the annual report of Yili, we found four phenomena that we can't explain easily. Now let's discuss them with you.

1. why is the proportion of bad debts reduced?

we found that in item 2 of accounts receivable portfolio accrual in 22, the accrual ratio is 3.73% within 3 months, 7.96% within 4-6 months, 23.58% within 7-12 months, and 1% after 1 year. However, the corresponding accrual ratios in 219 were 7.74%, 16.43%, 41.33% and 1% respectively. I remember the teacher's book in the Tang Dynasty said that "there must be a demon behind everything", especially when the company changed the proportion of bad debts.

according to the standards of 219, the bad debt loss of accounts receivable in 22 should be 14 million.

2. The borrowing interest rate rises

In 22, we summarized the ultra-short-term financing bonds issued by Yili, and the 3-day interest rate was generally around 1.6%. However, by the time the ultra-short-term financing bonds were issued in 221, the 3-day interest rate reached around 2.2%. The company has a cash reserve of 11.434 billion yuan, but the interest rate of borrowing has been rising, which is somewhat unreasonable.

3. Relationship between loan and small loans and factoring

Among other current assets, non-current assets due within one year and other non-current assets, we sort out the small loans and factoring. Among them, the total amount of small loans will increase from 1.329 billion in 219 to 3.114 billion in 22. Factoring has increased from 2.149 billion in 219 to 3.585 billion in 22. The sum of these two items increased from 3.478 billion in 219 to 6.699 billion in 22, an increase of 3.221 billion yuan.

the company's short-term loans increased from 4.56 billion in 219 to 6.957 billion in 22. Moreover, ultra-short financing has issued 36 issues. We want to know whether short-term loans and ultra-short financing have a strong relationship with the micro-loans and factoring provided by the company to the upstream and downstream industrial chains. We are a little worried about whether the company will have short-term loans and long-term investments, which is actually a bit dangerous.

4. Why did you invest in several investment fund companies?

in 22, the company invested 1.925 billion yuan in PAG ASIA CONSUMER L.P Before that, it also invested in several investment fund companies. What we don't understand is that the company is engaged in dairy products, so why should we invest in a company that has nothing to do with its main business?

IV. Summary

It's hard to say who is good or bad on the product, but Yili's milk powder is much better than Mengniu Dairy. Mengniu makes pasteurized milk better than Yili. Erie's pasteurized milk is not sold in convenience stores, supermarkets and box horses near me. Originally, I wanted to taste all the products of Mengniu and Yili myself and then make a comment. However, after I drank it ... I found that there was not much difference.

again, we think there are two kinds of enterprises worth investing in for a long time. The first type: this company has no rivals in the main industry, such as Tencent and Didi. Second: this company is always a little better than its biggest competitor in the industry. Yili shares belong to the second kind of enterprise, but through the analysis of our whole article, it is found that Yili shares are actually a big step out of Mengniu Dairy simply from the annual report.