Abstract: Some concerns (please pay attention to the leverage game)

Writing | Leverage Game Team

(Related data drawing)

As the third quarter report draws to a close, many stable leaders seem to have begun to waver, such as Yili.

On the evening of October 30, the company announced that it planned to buy back shares with the amount of no less than 1 billion yuan (inclusive) and no more than 2 billion yuan (inclusive), and the price of no more than 46.83 yuan/share (inclusive). The shares to be bought back will be used to cancel and reduce registered capital according to law.

Behind the buyback, Yili's share price had been falling continuously. On October 28 alone, it fell by 10.01%, a new low in the past two years. The market value evaporated nearly 19 billion yuan that day, and the total market value dropped to 165.6 billion yuan. On October 31, it continued to decline 2.47%, closing at 25.24 yuan/share, with a market value of 161.5 billion yuan.

This has something to do with the third quarter report released the day before. On October 28, Yili Shares released its financial report for the first three quarters of 2022. Among them, the net profit in the third quarter was 1.929 billion yuan, down 26.46% year on year, which was also considered lower than expected by many securities companies such as Guohai Securities.

It is not too much to say that such data is a "thunderbolt" of performance.

In the first half of this year, Yili achieved a revenue of 63.213 billion yuan, up 12.29% year on year; The net profit attributable to the shareholders of the listed company was 6.133 billion yuan, with the year-on-year growth rate exceeding the growth rate of revenue by 15.23%; The year-on-year growth rate of non net profit deduction was higher, reaching 17.51%.

But in the third quarter, Yili's net profit fell by nearly 30%. Why?

On the one hand, in the third quarter, affected by the epidemic, Yili's key liquid milk income was 21.22 billion yuan, down 4.9% year on year, and the demand in the second quarter (down 4.5% year on year) did not improve. According to the calculation of CITIC Securities, in the first three quarters of 2022, the low unit number of Yili normal temperature liquid milk increased, and the low temperature liquid milk fell in double digits. Among them, the basic white milk grew well, the unit number in Jindian increased, and the single digit number of Ammushi declined year-on-year.

In addition, in the first half of this year, Yili's sales expense was 11.639 billion yuan, and by the end of the third quarter, its sales expense increased to 17.339 billion yuan. In other words, in the third quarter alone, Yili's sales expenses increased by about 5.7 billion yuan.

In the first half of the year, Yili's sales expenses grew by 18.25% year on year. The explanation given in the semi annual report is that the increase in advertising and marketing expenses during the period and the merger of the subsidiary Aoyou Dairy Industry resulted in. Aoyou is an infant formula milk powder and nutritional food enterprise established in Hunan.

However, from January to September this year, Yili's sales expenses grew at a year-on-year rate of 21.71%. As for the reason, it was not disclosed in the short 15 page third quarter report.

However, compared with the data of the parent company and the consolidated statements, it is mainly due to the increase of the parent company's expenses.

In the profit statement of Yili's parent company, from January to September this year, its sales expense was 15.201 billion yuan, with a year-on-year growth rate of 11.81%; In this table in the first half of the year, its sales expenses were 10.363 billion yuan, an increase of 4.838 billion yuan in the third quarter, accounting for 85% of the increase in expenses after the consolidated statements, with a year-on-year growth rate of 9.66%.

The increase in expenses has lowered the profitability of Yili Shares.

According to the statistics of EastFortune, in the past nine years, the net interest rate of Yili shares was at the lowest level of 6.7% in 2013, while in the third quarter of this year, its net interest rate fell to 6.32%, a new low.

In addition, in recent years, Yili's asset liability ratio has increased year by year. 57.09% in 2020, 52.15% in 2021, and 56.99% in the semi annual report, up 9.28% year on year, exceeding the industry average.

After the release of the third quarter report of dairy giants, more than ten securities firms gave "buy" ratings. However, it is generally believed that under the influence of the epidemic, Yili's performance is under short-term pressure and the growth rate of liquid milk is slowing down. For example, Guohai Securities believes that Yili's profit in the third quarter was lower than market expectations, mainly due to weak consumption and sluggish growth of high-end products. At present, the progress of consumption recovery is still relatively slow, and it will take time for residents' consumption confidence and consumption power to recover.

Another interesting data is that as of the end of the third quarter of this year, the total number of common shareholders of Yili Shares was 480896; At the end of the second quarter, there were 413625 households, that is to say, from July to September, about 67000 households (67271 households) entered the market to "check the bottom". However, compared with 535651 households at the end of the third quarter of last year, there was a decrease of about 54800 households, a year-on-year decrease of 10%.

In general, Yili is a good company. Of course, as mentioned in the leverage game above, changes in some indicators are still worth paying attention to.