Inner Mongolia Yili Industrial Group Co. Ltd.

Inner Mongolia Yili Industrial Group, through its subsidiaries, is engaged in the purchasing, processing and selling milk; raising milk cows and animals; import and export trading; manufacturing and selling cold beverages; manufacturing milk powder, fluid milk, frozen food and dairy food; assets and enterprise entrusted operations; industrial plantation; processing agricultural product; manufacturing and selling dairy products; investment development; selling minerals, animals and by-products; real estate development, operation and consultation services; purchasing agricultural by-products; and purchasing and selling feeds.
  • Ticker600887
  • ISINCNE000000JP5
  • ExchangeShanghai Stock Exchange
  • SectorFood Producers
  • CountryChina
UOB
Ivy Xu Da ...
  • Robin Yuen

Consumer - Bi-weekly (9-26 May)

H-share markets turned sour last week (-5.6% last Friday) as China announced a national security law on Hong Kong. Within discretionary, high-beta names (eg Macau gaming) and Hong Kong retailers took a major hit. We see buying opportunities for unaffected consumer names, ie those with primarily domestic demand and supply chains. We expect sentiment to improve as more Covid-19 recovery news flows through in the next month.

UOB
Ivy Xu Da ...
  • Robin Yuen

Consumer - Bi-weekly (18 April-8 May)

As China normalises from the COVID-19 lockdown, consumer activities during the May Golden Week holidays have improved (but still down yoy) vs the Ching Ming festival in April, thanks to heavy promotions from both the government and corporations. The gradual recovery is in line with expectations of a 3Q20 recovery, but we note share prices have rallied last week, perhaps on improving sentiment.

UOB
Adrian Loh Tzum Yung ...
  • Carol Dou Xiao Qin
  • Ivy Xu Da
  • Jayson Kong
  • Jonathan Koh
  • K Ajith
  • Keith Wee Teck Keong
  • Ken Lee
  • Loke Pei Hao
  • Malaysia Research Team
  • Michael Cheung Ho Bun
  • Philip Wong
  • Robin Yuen
  • Stevanus Juanda
  • Tham Mun Hon
  • Vincent Khoo Boo Aik

Regional Morning Notes - Monday, May 04, 2020

GREATER CHINA Economics PMI: Aftermath of COVID-19 pandemic could be prolonged. Sector Aviation: 1Q20: Steep losses in 1Q20 not a surprise. Scaling back of emergency security response on COVID-19 should aid domestic traffic recovery. Results China Yongda Auto Services Holdings (3669 HK/BUY/HK$7.86/Target: HK$10.00):1Q20: Results slightly miss estimates, but businesses are recovering strongly. Maintain BUY. Target price: HK$10.00. Gree Electric Appliances (000651 CH/HOLD/Rmb54.77/Target: Rmb52.00): 2019: Price war exacerbated by COVID-19. Inner Mongolia Yili Industrial Group (600887 CH/SELL/Rm...

UOB
Ivy Xu Da ...
  • Jayson Kong
  • Joyce Chan Pui Lai
  • K Ajith
  • Ken Lee
  • Lee Yuk Kei
  • Robin Yuen
  • Tham Mun Hon
  • Vanness Wong Wan

Greater China Daily: Monday, May 4, 2020

KEY HIGHLIGHTS Economics PMI Aftermath of COVID-19 pandemic could be prolonged. Sector Aviation 1Q20: Steep losses in 1Q20 not a surprise. Scaling back of emergency security response on COVID-19 should aid domestic traffic recovery. Results China Yongda Auto Services Holdings (3669 HK/BUY/HK$7.86/Target: HK$10.00) 1Q20: Results slightly miss estimates, but businesses are recovering strongly. Maintain BUY. Target price: HK$10.00. Gree Electric Appliances (000651 CH/HOLD/Rmb54.77/Target: Rmb52.00) 2019: Price war exacerbated by COVID-19. Inner Mongolia Yili Industrial Group (600887 CH/...

UOB
Ivy Xu Da ...
  • Robin Yuen

Inner Mongolia Yili Industrial Group - 2019: Results in line. 1Q20 affected by COVID-19 outbreak. Profit decline outlook

Yili’s 2019 results are in line with expectations. However, 1Q20 profit dropped on slower sales, unchanged raw milk procurements, and operating deleverage. The key positive takeaway is that the infant milk formula segment is doing well amidst the COVID-19 outbreak, and Yili expects normal sales by May. Downgrade to SELL on lower target price of Rmb26.50 (from Rmb27.00). Within dairy, we prefer pure-play exposure on IMF manufacturers for superior growth prospects. Entry price: Rmb25.00.

Dave Nicoski ...
  • Ross LaDuke

Int'l Insights: Emerging Markets Strategy

The MSCI EM index continues to develop positively from a price perspective and we expect higher prices ahead. RS for the MSCI EM index is consolidating when compared to the MSCI EAFE index, which we believe is largely due to consolidation in the U.S. dollar. Therefore, the direction of the dollar will be critical for EM equities. A breakout in the USD may begin to create problems for EM, whereas a failure to break above 97.70-98 resistance and a gradual weakening of the USD should be an environment where EM can outperform. Below we highlight attractive and actionable themes within EM: • EM C...

UOB
Ivy Xu Da ...
  • Robin Yuen

Consumer - Bi-weekly (9-26 May)

H-share markets turned sour last week (-5.6% last Friday) as China announced a national security law on Hong Kong. Within discretionary, high-beta names (eg Macau gaming) and Hong Kong retailers took a major hit. We see buying opportunities for unaffected consumer names, ie those with primarily domestic demand and supply chains. We expect sentiment to improve as more Covid-19 recovery news flows through in the next month.

UOB
Ivy Xu Da ...
  • Robin Yuen

Consumer - Bi-weekly (18 April-8 May)

As China normalises from the COVID-19 lockdown, consumer activities during the May Golden Week holidays have improved (but still down yoy) vs the Ching Ming festival in April, thanks to heavy promotions from both the government and corporations. The gradual recovery is in line with expectations of a 3Q20 recovery, but we note share prices have rallied last week, perhaps on improving sentiment.

UOB
Adrian Loh Tzum Yung ...
  • Carol Dou Xiao Qin
  • Ivy Xu Da
  • Jayson Kong
  • Jonathan Koh
  • K Ajith
  • Keith Wee Teck Keong
  • Ken Lee
  • Loke Pei Hao
  • Malaysia Research Team
  • Michael Cheung Ho Bun
  • Philip Wong
  • Robin Yuen
  • Stevanus Juanda
  • Tham Mun Hon
  • Vincent Khoo Boo Aik

Regional Morning Notes - Monday, May 04, 2020

GREATER CHINA Economics PMI: Aftermath of COVID-19 pandemic could be prolonged. Sector Aviation: 1Q20: Steep losses in 1Q20 not a surprise. Scaling back of emergency security response on COVID-19 should aid domestic traffic recovery. Results China Yongda Auto Services Holdings (3669 HK/BUY/HK$7.86/Target: HK$10.00):1Q20: Results slightly miss estimates, but businesses are recovering strongly. Maintain BUY. Target price: HK$10.00. Gree Electric Appliances (000651 CH/HOLD/Rmb54.77/Target: Rmb52.00): 2019: Price war exacerbated by COVID-19. Inner Mongolia Yili Industrial Group (600887 CH/SELL/Rm...

UOB
Ivy Xu Da ...
  • Jayson Kong
  • Joyce Chan Pui Lai
  • K Ajith
  • Ken Lee
  • Lee Yuk Kei
  • Robin Yuen
  • Tham Mun Hon
  • Vanness Wong Wan

Greater China Daily: Monday, May 4, 2020

KEY HIGHLIGHTS Economics PMI Aftermath of COVID-19 pandemic could be prolonged. Sector Aviation 1Q20: Steep losses in 1Q20 not a surprise. Scaling back of emergency security response on COVID-19 should aid domestic traffic recovery. Results China Yongda Auto Services Holdings (3669 HK/BUY/HK$7.86/Target: HK$10.00) 1Q20: Results slightly miss estimates, but businesses are recovering strongly. Maintain BUY. Target price: HK$10.00. Gree Electric Appliances (000651 CH/HOLD/Rmb54.77/Target: Rmb52.00) 2019: Price war exacerbated by COVID-19. Inner Mongolia Yili Industrial Group (600887 CH/...

UOB
Ivy Xu Da ...
  • Robin Yuen

Inner Mongolia Yili Industrial Group - 2019: Results in line. 1Q20 affected by COVID-19 outbreak. Profit decline outlook

Yili’s 2019 results are in line with expectations. However, 1Q20 profit dropped on slower sales, unchanged raw milk procurements, and operating deleverage. The key positive takeaway is that the infant milk formula segment is doing well amidst the COVID-19 outbreak, and Yili expects normal sales by May. Downgrade to SELL on lower target price of Rmb26.50 (from Rmb27.00). Within dairy, we prefer pure-play exposure on IMF manufacturers for superior growth prospects. Entry price: Rmb25.00.

UOB
Carol Dou Xiao Qin ...
  • Katrina Chen Chucan
  • Michael Cheung Ho Bun
  • Neo Chen Wentao
  • Robin Yuen
  • Sandra Huang Jieqiong
  • Zhifeng Shen

Greater China Daily: Monday, September 2, 2019

KEY HIGHLIGHTS Sector Gas Key takeaways from gas conference in Changchun. Results China Shineway Pharmaceutical (2877 HK/BUY/HK$7.30/Target: HK$9.99) 1H19: Weak performance overall for 1H19; expect a turnaround in 2H19. Upgrade to BUY. Inner Mongolia Yili Industrial Group (600887 CH/HOLD/Rmb28.65/Target: Rmb27.00) 1H19: Results in line, with sales on track to meeting management’s guidance. MicroPort Scientific Corporation (853 HK/BUY/HK$6.95/Target: HK$8.50) 1H19: Adjusted earnings in line, domestic business accelerates. Shandong Gold Mining (1787 HK/HOLD/HK$20.40/Target: HK$20.57) 1H1...

UOB
Daisy Chen ...
  • Joyce Chan Pui Lai
  • Julia Pan Mengyao
  • Neo Chen Wentao
  • Robin Yuen
  • Sandra Huang Jieqiong
  • Shaun Tan

Greater China Daily: Friday, March, 1, 2019

KEY HIGHLIGHTS CHINA Sector Machinery 2019: From quantity to quality. Results Inner Mongolia Yili Industrial Group (600887 CH/HOLD/Rmb27.04/Target: Rmb25.00) 2018: Results in line, but guidance is too conservative. JD.com (JD US/HOLD/US$25.97/Target: US$26.00) 4Q18: In line, soft 1Q19 guidance; user growth stagnant. HONG KONG Sector Property HK Land Sale Programme 2019/20: Tighter supply. Results Galaxy Entertainment (27 HK/BUY/HK$55.75 /Target: HK$52.00) 4Q18: Results in line. SJM Holdings (880 HK/HOLD/HK$8.85/Target: HK$7.00) 4Q18: Results miss expectations. Our target price a...

INMONG.YILI INDL.GP.CTD. reduced its risk exposure resulting in an upgrade to Slightly Positive

INMONG.YILI INDL.GP.CTD. (CN), a company active in the Food Products industry, reduced its market risk and raised its general evaluation. The independent financial analyst theScreener awarded an improved star rating to the company, which now shows 3 out of 4 possible stars; its market behaviour has improved and can be considered as defensive. theScreener believes that this new assessment merits an overall rating upgrade to Slightly Positive. As of the analysis date April 24, 2020, the closing price was CNY 31.20 and its potential was estimated at CNY 33.48.

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