Inner Mongolia Yili Industrial Group Co. Ltd.

Overview Key strengths Key risks Largest dairy producer in Asia with well-recognized brands in China. Higher geographical concentration than global peers.  Extensive distribution network with increasing penetration of lower-tier cities. Exposed to volatile raw-milk prices and potential food-safety issues. Minimal leverage. We forecast revenue growth of 3%-5% for Inner Mongolia Yili Industrial Group Co. Ltd. over the next two years. This is more muted than the company's compound annual growth rate of 12.6% in 2018-2022. A poor baby-formula category has been weighing down China's dairy industry. This reflects declining birth rates and weak demand for liquid milk amid an economic slowdown. Yili will likely perform better than our projected growth of 2%-4% for the industry over the next two years.

...Consumer demand will be soft over the next two years. We forecast revenue growth of 3%-5% for Inner Mongolia Yili Industrial Group Co. Ltd. over the next two years. This is more muted than the company's compound annual growth rate of 12.6% in 2018-2022. A poor baby-formula category has been weighing down China's dairy industry. This reflects declining birth rates and weak demand for liquid milk amid an economic slowdown....

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