On April 27, with the release of Yili's annual report for 2021, Asia's first dairy enterprise to cross the 100 billion was born, and the industry echelon accelerated the differentiation of the dairy industry's "more than one" new pattern was formally established.

During the report period, the company realized total operating income of 110.595 billion yuan, an increase of 14.15% year-on-year, revenue growth of more than 13.7 billion yuan in absolute terms; net profit of 8.732 billion yuan, an increase of 23% year-on-year. The first quarterly report of 2022 released in the same period showed that the total operating income in the first quarter amounted to 31.047 billion yuan, an increase of 13.47% year-on-year, and the net profit of 3.508 billion yuan, a year-on-year surge of 24.08%.

Analysts pointed out that in the present full of uncertainty, the dairy industry is a minority of industries that still continue to grow, Yili is a scarce standard with certainty and growth qualities. In the multi-point repeated new crown epidemic and other complex environments, Yili whole industry chain resource integration ability, risk response ability and other core competitiveness and operational toughness has been verified again. These unrepeatable operational capabilities will be the greatest certainty for Yili to achieve its goal of being the first in the global dairy industry.

Pan Gang, Chairman of Yili, said, "In the current situation of recurring epidemics, Yili will make every effort to ensure the effective supply of dairy products. We are confident that we will achieve certainty of growth despite the uncertain environment. The company will continue to meet the health needs of consumers, work hand in hand with our partners*** to win, and give back to our employees and investors with solid growth. In addition, as the first company in China's food industry to publish a dual-carbon target and roadmap, Yili will achieve carbon neutrality across the entire industrial chain by 2050. We will ultimately realize the goal of 'Total Value Leadership' in promoting the integration of business value and social value."

Significant growth in multiple business segments

Under the guidance of the National Dairy Revitalization Strategy, the overall scale and production technology of China's dairy products have reached the world's advanced level. However, due to China's large population base, the per capita consumption of dairy products per annum is less than 25kg (converted to the quantity of milk in accordance with the National Bureau of Statistics' production of milk and dairy products, and the following Per capita consumption refers to the amount of milk), far below the world average level of 113kg (global data published by the Organization for Economic Cooperation and Development), accounting for only 1/10 of the annual per capita consumption of 220kg in Europe and the United States, compared with the level of Japan and South Korea per capita consumption of more than 100kg per annum or compared to the same developing countries in India, the annual per capita consumption of 144kg (NATIONAL DAIRY). DEVELOPMENT BOARD official website 2018-2019 data), China's dairy industry has a broad space for development.

As consumers' health awareness rises, the demand for dairy products from urban and rural residents continues to increase. Kaidu research data shows that during the reporting period, liquid milk consumption in the local and county-level markets increased by 17.4% compared to the same period of the previous year, and the growth rate of dairy consumption in the lower-tier markets has accelerated significantly.

Under the market trend of continuous growth in demand for dairy products, this provides a foundation for Yili to break through the 100 billion revenue scale.

The financial data show that as the "basic disk" of Yili's liquid milk business revenue of 84.911 billion yuan, an increase of 11.54% year-on-year, ranking first in the market. The annual sales scale of Yili pure milk, Jindian pure milk, and Amushi room temperature yogurt series products all exceeded 20 billion. Among them, the market share of Golden Dawn organic series products, on the basis of maintaining the leading position in the market for many years in a row, increased by 0.64 percentage points compared with the same period of the previous year, ranking first in the organic milk category; the market share of "Smooth and Light" low-temperature yogurt ranked first in the subcategory; and the annual sales scale of "Zhenqin" series of pure milk was more than 20 billion yuan.

In addition, the cold beverage business has ranked first in the industry for 27 consecutive years. 2021, the company's cold beverage business realized operating income of 7.161 billion yuan, an increase of 16.28% year-on-year, and continue to expand the leading edge.

In addition to the basic business segments, Yili's new growth poles are also making strong inroads. During the reporting period, the company's milk powder and dairy products business realized an operating income of 16.209 billion yuan, up 25.80% year-on-year. Among them, the annual sales revenue of infant formula brand Gold Leader Crown exceeded 10 billion yuan. Nielsen zero research data show that Yili's infant formula retail market share increased by 1.4 percentage points year-on-year, with the growth rate ranking first in the market.

In addition, Nielsen Zero Research data shows that in 2021, Yili's cheese business, under the comprehensive layout of room temperature, low temperature, 2B and 2C, achieved a revenue growth of more than 150%, and the market share increased significantly by 6.3 percentage points, and continued to maintain the momentum of high-speed growth. During the same period, Yili's specialized dairy products continued to tap new growth points in the cheese and cream business by providing dairy products and services to customers in the bakery, restaurant and beverage industries.

"Post-100 billion era" opens a new round of strategic layout

Yili said that 2021 is the year when the company's revenue crosses the 100 billion mark, and it is also the year to improve the "post-100 billion era" strategic layout and accelerate the progress of the "post-100 billion era". In terms of key businesses, the company has made a series of landings, and the major strategic layout continues.

In March 2022, the company completed the tender offer for Ausnutria Dairy, formally holding Ausnutria. Aussie is the head of the domestic milk powder market, with the world's first brand of goat milk powder Jiabei Aite. The company's newest product is a new product, which will be available for sale in the U.S. and Canada, and will be available for purchase on the U.S. market.

In terms of the cheese business, the establishment of Yijiahao Cheese Company, through the corporatization of the operation, can be oriented to the market to take a more flexible market strategy, at the same time, can realize the centralized allocation of resources, to better adapt to the rapid growth of the cheese industry momentum, and further enhance the competitiveness of the company's cheese business.

In addition to the key business layout, the company has continued to make efforts in the layout and capacity building of the whole industry chain.

In terms of milk source construction, Yili has formed a great advantage of milk source through its own milk source and cooperative milk source. The company relies on domestic and New Zealand double core milk source bases to build a strong advantage of its own milk sources globally, guaranteeing high-quality and highly stable milk supply. At the same time, the company joins hands with core suppliers*** to plan and build cooperative milk source bases, empowering cooperative farms with capital, technology and other high-quality resources, giving full play to the synergistic value of the whole industry chain, and comprehensively promoting the healthy development of the industry chain. Since 2015, the proportion of the company's large-scale intensive milk sources has reached 100%, and the ability to guarantee milk sources has continued to improve, effectively promoting the rapid development of various businesses.

In the overseas market, the synergistic advantage of the company's "global supply chain network" has also been comprehensively enhanced. During the reporting period, the company's main products have covered five continents, more than 60 countries and regions, overseas business income increased by 8% over the same period last year. Among them, the first phase of the frozen beverage production base project in Indonesia was completed and put into operation; the Westland factory was upgraded, and the output of the butter brand Westgold (Mouen) was significantly increased, and the international butter market share continued to expand.

At the same time as the development of the enterprise, the company plays the advantages of the whole industry chain resources and the advantages of the layout of the whole channel, to ensure the effective supply of dairy products under the epidemic, and go to the front line of the epidemic in various places, to supply the nutrition and materials for the "war epidemic". Since 2020, the company has donated 380 million yuan to fight the new crown epidemic.

In addition, Yili's successful cooperation with the Olympic Games, the World Expo, CBA, the Asian Cup and other big IP platforms has boosted the company's branding and operation in a two-dimensional way, demonstrating the company's excellent resource platform operation capabilities. On the occasion of the return of Shenzhou XIII crew, the company joined hands with China Aerospace to launch the "Future Dairy Space Laboratory", opening up a new situation in which aerospace technology and dairy products and health food fields promote each other and innovative applications.

Wen Beibei

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