Inner Mongolia Yili Industrial Group (600887.SH) first half of 2025: Driven by diversified businesses, non-GAAP net profit increased by over 30%.

On August 28th, Inner Mongolia Yili Industrial Group (600887.SH) released its financial report for the first half of 2025, achieving a total operating income of 61.933 billion yuan, 1.49 times that of the industry's second place, maintaining an absolute leading advantage, and achieving a year-on-year growth of 3.37%. In addition, the company's non-net profit attributable to shareholders was 7.016 billion yuan, a year-on-year increase of 31.78%, ranking first in the Asian dairy industry, with a non-net profit margin of 11.33%, far higher than the industry average. In fact, the company has a wide range of products including liquid milk, milk beverages, powdered milk, yogurt, chilled drinks, cheese, butter, and cream, and continues to upgrade the supply structure of dairy products, creating a diversified business portfolio that has performed well in the first half of the year, driving overall performance growth. In the first half of the year, the liquid milk business achieved operating income of 36.126 billion yuan, with impressive growth in various categories, such as a growth of over 20% in the low-temperature white milk category, and double-digit growth in the liquid milk 2B business revenue. In addition, the powdered milk and dairy products business achieved operating income of 16.578 billion yuan, a year-on-year increase of 14.26%; the chilled drinks business achieved operating income of 8.229 billion yuan, a year-on-year increase of 12.39%, with the revenue share of these three major businesses being 58.33%, 26.77%, and 13.29%, respectively. Clearly, Yili's balanced business portfolio and the solid foundation + multiple growth engines it has built have become the driving force behind its performance this time, which is one of the company's biggest advantages compared to its peers. More importantly, each major product category in Yili's business portfolio has achieved the top position in the industry and continues to strengthen its leading position. For example, in the liquid milk business, the overall market share of room-temperature yogurt increased by 4.3 percentage points in the first half of the year, ranking first in the industry. The flagship product "Ambrosial" has dominated retail sales for several years in a row. In addition, the market share of room-temperature yogurt, room-temperature milk beverages, and high-end white milk has all increased. As one of the growth engines, the market share of various categories in the powdered milk and dairy products business is far ahead. According to data from Nielsen and Starmap, the retail sales market share of infant and toddler formula (including cow's milk powder and goat's milk powder) reached 18.1% in the first half of the year, an increase of 1.3 percentage points year-on-year. The market share of goat milk powder reached 34.4%, an increase of 3 percentage points, while the market share of adult milk powder reached 26.1%, an increase of 1.8 percentage points, with both categories firmly holding the top positions in the industry. While deepening its dairy business, Yili is accelerating the expansion of non-dairy business sectors to create a healthier balanced business portfolio structure. Healthy water beverages have shown strong growth momentum. Following the success of Yihetquan Jasmine Tea, Fragrant Oolong, and Ginseng and Wolfberry Health Water, Yili rapidly launched new products such as Yihetquan Matcha Green Tea, Pure Oolong, and "Quan Aibabe", a low-sodium mineral water specifically for infants and young children, in the first half of the year, driving double-digit high-speed growth in the water beverage business. Yili's balanced business portfolio breaks the growth model of traditional dairy companies and establishes a new growth curve across industries and higher dimensions of competition. The company's comprehensive layout in all categories continues to dominate the market, showing a trend of the strong getting stronger. These multidimensional competitive advantages have built a strong foundation for the company, allowing it to maintain its industry-leading performance while rapidly expanding its presence in the global market. It is worth noting that the company continues to invest in research and innovation to maintain its leading position in the industry. Its research and development expenses increased by 11.4% year-on-year in the first half of the year. On one hand, the company actively explores and invests in the research and development of new product categories to meet the diverse needs of consumers. On the other hand, it focuses on high quality as its strategic position, with its core indicators in the production of raw milk being far superior to that of the EU. Furthermore, accelerating the construction of a deep processing system for Chinese dairy products and transitioning to higher value chains is a major strategic layout that Yili is promoting, marking an important milestone in the development of the Chinese dairy industry. The company has made breakthroughs in the localization of key raw materials, establishing a new pattern of "raw material security + independent and controllable industrial chain", driving the Chinese dairy industry from being "controlled by others" to "independently controllable", truly achieving "Chinese cheese made in China". In terms of innovation, the company is also expanding the boundaries of the industry, such as creating a new category of medicinal and nutrient-rich dairy products sourced from the same origin, exploring the establishment of more authoritative industry standards, and actively promoting the improvement of "origin of medicinal food" enterprise standards and technical standards, laying a solid foundation for the development of new tracks. Based on its strong foundation, Yili's globalization strategy is accelerating. The company's flagship brand Golden Yuan Crown made its debut in the Hong Kong market in May this year, Cremo officially launched in Saudi Arabia in June, and Yili, along with its overseas ice cream brands Joyday and Cremo, appeared at the FIBA Asia Cup event in August, showcasing the strength of its global brands. In the first half of the year, the core category of the company's overseas business, chilled drinks, saw a year-on-year revenue growth of 14.4%, while infant goat milk powder business revenue increased by 65.7%. The company's global layout is not simply expanding, but adopting a model of deep local cultivation and supply chain synergy. By integrating high-quality raw materials globally on the resource side to ensure continuous improvement in product quality, gathering cutting-edge research forces on the innovation side to transform technological advantages into product capabilities, and responding quickly to diverse consumer demands through deep localization operations and global channel synergy on the market side, Yili is enhancing its presence in overseas markets and brand influence. Overall, Yili's balanced growth model, comprehensive category leadership, continuous focus on high quality and innovative products will continue to drive its sustained leadership in the domestic market in the long run. With the accelerated expansion of overseas markets, Yili is expected to quickly become a new growth engine, leveraging its product and market scale advantages, driving continuous growth in performance. Along with the growth in scale, continuous optimization of costs and expenses will bring profit increases and cash flow to the company. The company maintains a strong operating cash net inflow, showing a continuous upward trend in the past three years (2022-2024), with an average net inflow of 17.82 billion yuan, which is also the foundation for its high dividends. During this period, the company's total cash dividends amounted to 22 billion yuan, with a dividend ratio consistently above 70%. With the further increase in the company's non-net profit in 2025, the market expects that the annual dividend amount of the company will reach a new high. The company's growth in performance and high dividends will also be reflected in its market value, and in the medium to long term, it is expected to achieve a reshaping of valuation.