Morningstar - Inner Mongolia Yili Industrial Group Co. Ltd. Class A (600887) Launching Coverage of Yili at CNY 17.50 FVE With Narrow Moat and Stable Trend; Shares Fairly Valued

Report

Morningstar

Allen Cheng

EUR 101.80 For Business Accounts Only

Launching Coverage of Yili at CNY 17.50 FVE With Narrow Moat and Stable Trend; Shares Fairly Valued

We initiate coverage of Inner Mongolia Yili Industrial Group, or Yili, with a fair value estimate of CNY 17.50, along with narrow moat and stable moat trend ratings. Our fair value estimate implies forward price/earnings of 18.6 times, enterprise value/EBITDA of 11.4 times, and free cash flow yield of 4% to estimated fiscal 2017 earnings and cash flow. The shares are trading at 1.04 times our fair value estimate, and we view the shares as fairly valued.
Founded in 1993, Yili has evolved to becom...

15/02/2017 13 EN

Underlying

Inner Mongolia Yili Industrial Group Co. Ltd. Class A

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.

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CNE000000JP5 Shanghai Stock Exchange China

Provider

Morningstar

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.

Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.

We have operations in 27 countries.

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Analysts

Allen Cheng

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Launching Coverage of Yili at CNY 17.50 FVE With Narrow Moat and Stable Trend; Shares Fairly Valued

China Consumer: Focus on four key theses for the sector.

Inner Mongolia Yili Industrial Group Co Ltd: Update following rating affirmation

China Consumer: Tourism, catering and movie consumption: Strong performances during CNY.

Business as Usual for No-Moat Lonza; Specialty Ingredients Carve-Out on Track for 2020

Astra Posts Solid 2Q, Driven by Strong Cancer Drug Sales and Moving Away From One-Time Divestments

Astra Posts Solid 2Q, Driven by Strong Cancer Drug Sales and Moving Away From One-Time Divestments

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