Yili, Asia’s leading dairy company, has released its FY2021 H1 financial report on 30 August. The company exceeded market expectations with double-digit growth in revenue and net profit, with gross revenue rising 18.89% YoY to reach RMB 56.506bn, and net profit attributable to the parent company jumping 42.48% YoY to reach RMB 5.322bn.
Yili’s interim results set another new high for the Asian dairy industry, as the latest data makes Yili the first likely dairy company in Asia to exceed RMB 100bn in revenue. Strong financial performance in H1 FY2021 also suggests that the company will likely continue to maintain its momentum.
Further market expansion for core products
In the first half of 2021, the dairy industry faced significant challenges from global economic and trade instability and rising costs for raw materials. However, Yili exceeded its operation targets for the period by leveraging its competitive advantages across the whole industry value chain.
During the reporting period, Yili’s main products continued to exhibit strong growth. For instance, the total sales revenue for Satine, AMBPOMIAL, Changqing, Jinlingguan, and Chocliz increased by 20.7% YoY. In particular, the AMBPOMIAL AMX Zero Sugar yoghurt and AMBPOMIAL 5G-Protein yoghurt series, launched in the second half of 2020, saw rapid growth and great brand development potential. Meanwhile, the sales revenue of new product categories represented by Satine A2 Beta-casein Organic Pure Milk, Yili Zhennong High-calcium Milk, Changqing Tea & Fruit Yogurt, and Cute Star Child Growth Goat Milk accounted for 15.6% of Yili’s total revenue and became essential contributors to Yili’s performance.
Extending and diversifying product lines
During the reporting period, the retail sales of cheese products more than doubled year over year, giving the company a head start in the segment with high growth potential.
The company’s low-temperature milk business also grew fast, with 5.7% increase in market share.
Yili’s Jinlingguan series of high-end infant formula, developed with support from 19 years of breast milk research and high-quality milk sources such as organic and A2 milk, is also widely recognised as a reliable and good-quality product in the market. Nielsen retail data showed the retail sales of infant formulas increased by 35.2% YoY, in which the growth rate of Jinlingguan Zhenhu reached 37% to become the fastest-growing brand in its segment.
In the non-dairy category, Yili’s Inikin Yike mineral water also made a breakthrough in sales growth and has mainly been distributed in big cities through e-commerce, O2O home delivery, and other channels. Manufacturing plants for the product are now operating at full capacity.
Upgrading distribution channels and strengthening the global network
The ongoing impact of COVID-19 has affected consumption behaviours and scenarios. Of note, there has been an accelerated growth in the contributions of new retail and e-commerce to the total retail sales of consumer goods.
While leveraging existing advantages in its distribution channels, Yili also embraced digital channels in response to the latest market trends. Yili’s e-commerce business grew 21.8% YoY in the first half of 2021, contributing to the high market penetration rate of 85.7% for its UHT milk.
In addition, Yili also leveraged synergy within its global supply chain network to ensure the efficient operation of its supply, production, and marketing systems. As of June 2021, the company’s total production capacity neared 13.94 million tons per year.
In August this year, Rabobank released its annual Global Dairy Top 20 list, in which Yili Group was again listed among the top five global dairy companies. Yili was also ranked as the leading company in Asia for eight consecutive years.