Yili Co., Ltd. (600887.SH) in the first half of 2025: Driven by diversified businesses, deducted non-net profit surged by more than 30%

The Zhitong Finance App learned that on August 28, Yili Co., Ltd. (600887.SH) released its financial report for the first half of 2025. During this period, it achieved total revenue of 61,933 billion yuan, 1.49 times the second place in the industry, maintaining an absolute leading edge while achieving a year-on-year increase of 3.37%. Furthermore, the company's net profit withheld from non-return mother was 7.016 billion yuan, an increase of 31.78% year on year, ranking first in the Asian dairy industry, with a non-net interest rate of 11.33%, far higher than the level of peers.

In fact, the company laid out various categories such as liquid milk, milk drinks, milk powder, yogurt, cold drinks, cheese, butter, and whipped cream, and continued to promote the upgrading of the dairy supply structure, creating a diversified business portfolio. It fully exploded in the first half of the year, and balanced the steady growth of its overall performance.

The liquid milk business achieved revenue of 36.126 billion yuan in the first half of the year. For example, the low-temperature white milk category increased by more than 20%, and the liquid milk 2B business also achieved double-digit growth in the channel; in addition, the milk powder and dairy products business achieved operating income of 16.578 billion yuan, an increase of 14.26% year on year; the cold drink business achieved operating income of 8.229 billion yuan, an increase of 12.39% year on year. The revenue shares of the above three businesses were 58.33%, 26.77%, and 13.29% respectively.

Obviously, Yili's balanced business portfolio and strong basic market+multi-growth engine became the biggest driving force for this performance. This is also one of the company's biggest advantages compared to its peers. More importantly, Erie's business portfolio has reached the No. 1 in the industry in every major category, and is still improving its leading edge.

In terms of the basic liquid milk business, the overall market share of room temperature yogurt increased 4.3 percentage points in the first half of the year, ranking first in the industry. Among them, the retail sales of the star product Anmushi dominated the list for many years. Furthermore, the market share of room temperature yogurt, room temperature milk drinks, and high-end white milk increased across the board; as one of the growth engines, the market share of various categories of milk powder and dairy products was far ahead. According to comprehensive research data from Nielsen and Starmap third parties, the overall retail sales market share of infant formula (including milk powder and goat milk powder) reached 18.1% in the first half of the year, an increase of 1.3 percentage points over the previous year. In terms of segmentation, the market share of goat milk powder reached 34.4%, up 3 percentage points at the same time, and the retail sales market share of the adult milk powder business reached 26.1%, up 1.8 percentage points from the previous year. Both major milk powder categories ranked first in the industry.

While deeply involved in the dairy industry, Yili has accelerated the expansion of the non-dairy business sector and created a healthier balanced combination structure. Healthy drinking water has shown a strong growth momentum. After Ike Huoquan jasmine tea, mellow oolong, and ginseng and wolfberry health water were highly recognized by the market, in the first half of the year, Yili quickly launched new products such as Ike Huoquan Matcha Green Tea, fragrant oolong, and “Quan Ai Baby” low-sodium light mineral water specially created for infants and young children, driving the water drinking business to achieve rapid double-digit growth.

Yili's balanced business portfolio has broken the original growth model of dairy companies and built a new growth curve across industries and a moat of higher dimensions of competition. Moreover, the company's balanced layout of all categories continues to advance, and the market share of multiple categories continues to dominate the list, showing a trend of stronger players. These multi-dimensional competitive advantages have provided the company with strong chassis capabilities, and while maintaining industry-leading performance, it is also able to quickly position itself in the global market.

Notably, the company continues to invest in R&D and innovation capabilities to maintain its leading position in the industry. In the first half of the year, its R&D expenses increased 11.4% year over year. On the one hand, the company actively explores and invests in research and development of new categories to meet the diverse needs of consumers; on the other hand, with high quality as a winning ground, many of its core indicators of raw milk are far superior to those of the European Union.

Furthermore, speeding up the construction of a deep processing system for dairy products with Chinese characteristics and moving towards higher value in the industrial chain is another major layout that Yili is promoting, and it is also an important milestone in the development of China's dairy industry. The company achieved a breakthrough in the localization of key raw materials, established a new pattern of “raw material safety+autonomous and controllable industrial chain”, promoted the Chinese dairy industry to complete a strategic leap from “controlled by people” to “autonomous and controllable”, and truly realized “Chinese cheese made in China”. In terms of innovative capabilities, the company is also making efforts to expand industry boundaries, such as creatively developing new categories of medicinal food and health products, exploring the establishment of more authoritative industry standards, actively promoting the improvement of “pharmaceutical and food homologous” enterprise standards and technical standards, and laying a solid foundation for the development of the new circuit.

Based on a strong basic market, Yili's globalization strategy is advancing at an accelerated pace. In May of this year, Jinlingguan fully entered the Hong Kong market. In June, Cremo officially landed in Saudi Arabia. In August, Yili and its overseas ice cream brands Joyday and Cremo appeared at the FIBA Asia Cup, demonstrating the brand's global strength. In the first half of the year, revenue from the cold drink business, the core category of the company's overseas business, increased 14.4% year-on-year, and revenue from the infant goat milk powder business increased 65.7%.

The company's global layout is not a one-way expansion. Instead, it adopts a model of deep localization and supply chain collaboration, integrating high-quality global raw materials on the resource side to ensure continuous improvement in product quality; gathering cutting-edge scientific research forces on the innovation side to transform technical advantages into product power to feed back the global market; and on the market side, it quickly responds to diverse consumer needs through deep localization operations and global channel collaboration to enhance overseas market penetration and brand influence.

Overall, Yili's balanced growth model plus all category leaders will continue to drive its long-term trend of becoming stronger in the domestic market, and the accelerated expansion of overseas markets is expected to rapidly grow into a new growth engine with product advantages and market size advantages, and jointly drive continuous growth in performance. As scale grows, costs and expenses continue to be optimized, which will bring the company an increase in profit and cash inflow.

The company maintained a strong net operating cash inflow. The past three years (2024) showed a continuous upward trend, with an average net inflow of 17.82 billion yuan. This is also the driving force behind the company's high dividends. During this period, cash dividends totaled 22 billion yuan, and the dividend ratio remained above 70%. Non-net profit after deduction increased further in 2025, and the market expects the company's annual dividend amount to reach a new high. Meanwhile, the company's growth in performance and high dividends will also be reflected in its market value. In the medium to long term, it is expected that valuation will be reshaped.