600887 Inner Mongolia Yili Industrial GroupWatchlist
About Inner Mongolia Yili Industrial Group Company
The company is ranked in the top five dairy industries in the world, ranking first in the dairy industry in Asia for nine consecutive years. It is the largest dairy company in China with the most complete range of products. It is also an international enterprise with an industrial layout in Asia, Europe, America and Oceania. Excellent product quality, leading comprehensive service capabilities, and comprehensive sustainable development capabilities have made Yili always deeply trusted and recognized by the world's top events, events, governments at all levels, and all sectors of society. From the 2008 Beijing Olympics to the 2019 Wuhan Military Games, the 2022 Beijing Winter Olympics, from the 2010 Shanghai World Expo to the 2016 Hangzhou G20 Summit, Yili made frequent appearances as the only dairy company providing services. At the same time, Yili is also a partner in top summits such as the World Economic Forum, the Boao Forum for Asia, and the World Internet Conference. The company is mainly engaged in processing, manufacturing and sales of various dairy products and health drinks. The company has several major product lines of liquid milk, milk drinks, milk powder, yogurt, frozen drinks, cheese, milk fat, and packaged drinking water. The honors received by the company include: 2017 Food Benchmarking Enterprise, 10th Anniversary Leading Enterprise Award of the 10th People's Corporate Social Responsibility Award, 2015 Industrial Enterprise Quality Benchmarking, Best Honest Enterprise Award, China's 50 Green Companies, Top 50 Public Welfare, Nutrition and Health Product Innovation Award, Best Honest Enterprise Award, 2022 Top 10 Taxpayer Enterprises, 2022 Advanced Defense Mobilization Unit, 2021 China Light Industry Top 200 Enterprise Medal, 2021 China Light Industry Top 50 Enterprises in China Light Industry Food Industry, etc.
As the only Chinese company invited, Yili appeared at the World Drinking Water Conference
Sharing innovative practices of healthy drinking water with the world, Perth, Scotland, December 4, 2023/PRNewswire/ -- From November 27 to 29, local time, the 20th World Drinking Water Conference was held at Gleneagles Manor in Scotland, England. Industry leaders and business representatives from the United States, the United Kingdom, France, Switzerland, Romania, India, Japan, and China gathered. As the only Chinese business representative, Yili Group was invited to attend the main forum of the conference. Dr. Gerrit Smit, Director of the Erie European Innovation Center, delivered a keynote speech entitled “Meeting the New Needs of Chinese Consumers”
Returns On Capital At Inner Mongolia Yili Industrial Group (SHSE:600887) Paint A Concerning Picture
What are the early trends we should look for to identify a stock that could multiply in value over the long term? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then a
Increased profitability and increased long-term capital holdings of Yili shares have entered the “hitting zone” for price investors
Recently, profit-making policies have been introduced intensively, compounded by weakening US bond yields. Investor confidence in the A-share market has recovered, and the bottom has risen. Meanwhile, the latest social zero data for October released by the Bureau of Statistics increased 7.6% year on year, higher than the agency's forecast of 7.3%, and higher than the 5.5% in September, which means that consumption has recovered at an accelerated pace since the beginning of the fourth quarter. Among the segmented categories, food and beverage revenue increased sharply by 17.1% in October, which is more than 2 times the overall growth rate of Social Zero, which suggests that the performance of the food and beverage sector is recovering rapidly. In the food and drink sector, compared to valuations that tend to be 30 times the price-earnings ratio of leading liquor companies, Erie, a leader in the dairy industry, currently has a price-earnings ratio of only
UOBKH: Inner Mongolia Yili Industrial Group (600887 CH) – Buy Target Price Rmb37.50 (Previous Rmb39.30)
UOBKH: Inner Mongolia Yili Industrial Group (600887 CH) – Buy Target Price Rmb37.50 (Previous Rmb39.30) - Alpha Edge Investing
$Inner Mongolia Yili Industrial Group(600887.SH)$
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2. It has been the way how China operated as they have regulated several industries in the past 20 years and this time isn't any different.
3. For example, some of you might remember the 2008 melamine milk scandal. 21 companies were tainted with excessive melamine including Mengniu and Yili, two largest dairy companies in China today. China government regulated the industry and punished a group of perpetrators to death and imprisonment. Thereafter the industry was cleaned up and you don't hear such problems anymore. $MENGNIU DAIRY(02319.HK)$ share price went up 10x since 2008 while $Inner Mongolia Yili Industrial Group(600887.SH)$ went up 40x. China didn't destroy the companies nor nationalise them.
4. I was involved as an investor in the next example. It was during 2016 where China was clamping down on corruption. If some of you can recall, China was very well known for corruption in the past. Now less so. The government arrested many top officials for graft and demand for luxury goods such as $Kweichow Moutai(600519.SH)$ declined - few want to be accused of graft when they buy such items.
5. $ORIENTAL WATCH(00398.HK)$ is a luxury watch retailer with majority of the sales coming from China. It got hit because of the anti-corruption drive. I bought the stock at the low and the business and share price recovered after the drive ended. I eventually sold for a 1.5x return. Today, it is up 5x from the price I bought.
6. I was involved in the third example too. In 2019, China regulated the pharmaceutical industry. They introduced a two-invoice policy to reduce the middleman distributors to just two for any drug. China was plagued with rising drug costs which the man on the street could face affordability issues. The key problem was the unnecessary middlemen who marked up the costs. This policy sent the pharma stock prices down.
7. One of which was $CMS(00867.HK)$ I picked the stock up as the impact wasn't that big to them since they were a key distributor even under the new system. The share price recovered but I sold for a 34% gain because there was a short seller report that came up. Just wanted to err on the safe side. The company is still around today though and the stock went up as much as 2x from the price I bought at one point in time.
8. There were even more industries in which China had regulated in the past but I showed three examples here. Investors can in fact take advantage of these regulations as opportunities to buy stocks on the cheap.
9. Most investment literature is written by the west who operate in a system different from China. We cannot just adopt the same worldview and apply it to China. China is China. If you use other worldview to see China, you will only see what's wrong with it.
10. China is a central planning country and the government has a lot of power. This is unlike the US where legislative, executive and judicial powers are separated. Regulations are more effective in China than in the US (where they deliberate for months and still can end up in a stalemate). The features are cannot be more different.
11. The Chinese has a paternalistic culture where the father is the head of the household and is responsible for disciplining (子不教父子过). This is reflective of how the China government behave too. They see themselves as the head of the country and it is their responsibility to discipline anyone whose actions are deemed as harmful to the society.
12. People don't care about China in the past. But now they are too big to be ignored and they bring a culture that the world may not be accustomed to. Some of the rules will be rewritten inadvertently too.