---
title: "Yili Reports 2017 Financial Results: Impressive Data, Yet Stock Nearly Hits Limit Down!"
description: "Last night (April 26), dairy giant Yili released its 2017 annual report and 2018 first-quarter report, showing significant growth in both revenue and net profit. In 2017, revenue reached 68.058 billion yuan, with a 2018 target of 77 billion yuan. According to New Distribution, Yili's 2017 total operating revenue was 68.058 billion yuan, up 12.29% year-on-year; net profit reached 6.003 billion yuan, with non-GAAP net profit growing strongly by 17.70%. In the first quarter of 2018, operating revenue was 19.753 billion yuan, up 25.1% year-on-year; net profit was 2.106 billion yuan, up 21.3%."
author: "New Distribution"
publisher: "New Distribution"
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published: "2018-04-27"
language: "en"
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# Yili Reports 2017 Financial Results: Impressive Data, Yet Stock Nearly Hits Limit Down!

> Last night (April 26), dairy giant Yili released its 2017 annual report and 2018 first-quarter report, showing significant growth in both revenue and net profit. In 2017, revenue reached 68.058 billion yuan, with a 2018 target of 77 billion yuan. According to New Distribution, Yili's 2017 total operating revenue was 68.058 billion yuan, up 12.29% year-on-year; net profit reached 6.003 billion yuan, with non-GAAP net profit growing strongly by 17.70%. In the first quarter of 2018, operating revenue was 19.753 billion yuan, up 25.1% year-on-year; net profit was 2.106 billion yuan, up 21.3%.

Last night (April 26), dairy giant Yili released its 2017 annual report and 2018 first-quarter report, showing significant growth in both revenue and net profit.
**2017 Revenue 68.058 Billion Yuan, 2018 Target 77 Billion**
According to New Distribution, in 2017, Yili achieved total operating revenue of 68.058 billion yuan, a year-on-year increase of 12.29%; net profit reached 6.003 billion yuan, with non-GAAP net profit growing strongly by 17.70%. In the first quarter of 2018, operating revenue was 19.753 billion yuan, up 25.1% year-on-year; net profit reached 2.106 billion yuan, up 21.3%.
In addition, Yili set its 2018 revenue and profit targets: planned total operating revenue of 77 billion yuan and total profit of 7.5 billion yuan.
**New Products Drive Sales, Accounting for 9.2%**
In 2017, Yili boosted performance through multiple star products and innovative products. The sales revenue proportion of key products such as "Jindian," "Ambrosial," "Changyi 100%," "Changqing," "Joy Day," "Jinlingguan," "Qiaolezi," and "Zhenxi" reached 45.7%.
Furthermore, the financial report shows that new products also significantly drove sales. New products represented by "Ambrosial ambient yogurt new product," "Jinlingguan Ruihu infant formula," "Yili brown charcoal yogurt," "Joy Day flavored fermented milk," and "Qiaolezi Qixuan crispy layer ice cream" accounted for about 9.2% of sales revenue.
**E-commerce Channel Retail Sales of Dairy Products Reached 22.6 Billion Yuan**
Currently, the rapid development of convenience stores, e-commerce platforms, and mother-and-baby stores has driven simultaneous growth in both online and offline dairy markets. Nielsen retail measurement data shows that in 2017, retail sales of liquid dairy products in convenience stores grew 15.1% year-on-year, significantly faster than other offline retail stores. During the same period, iResearch e-commerce monitoring data shows that overall dairy retail sales in e-commerce channels reached 22.6 billion yuan, up 34.6% from the same period last year, and continued to maintain rapid growth momentum.
It is understood that in 2017, Yili's e-commerce business revenue grew 130% year-on-year. In the mother-and-baby channel, the company's retail sales grew 38.9% year-on-year; in the convenience store channel, the company's retail market share of ambient liquid milk increased by 0.7 percentage points year-on-year.
**Liquid Dairy Products in Third- and Fourth-Tier Cities and Rural Markets Grew 8.8%**
Yili also highlighted development opportunities in third- and fourth-tier cities in its financial report. Data shows that per capita consumption expenditure of rural residents grew 8.1% year-on-year, 2.2 percentage points higher than urban residents, effectively driving dairy consumption growth in third- and fourth-tier cities and rural markets.
Nielsen retail measurement data shows that retail sales of liquid dairy products in third- and fourth-tier cities and rural markets grew 8.8% year-on-year, significantly higher than the growth rate of similar products in first- and second-tier cities, becoming a new engine driving dairy consumption scale growth. As of the end of 2017, Yili directly controlled nearly 530,000 village-level outlets, up 54% year-on-year, with continued enhancement of market penetration capabilities.
**Despite Impressive Financial Data, Investors Are Not Optimistic**
In 2017, Yili's liquid milk operating revenue reached 55.766 billion yuan, up 12.61% year-on-year. In the milk powder sector, 2017 revenue was 6.428 billion yuan, up 17.83% year-on-year. In 2017, cold drinks revenue was 4.606 billion yuan, up 9.82% year-on-year.
However, some analysts say: comparing annual data from the past five years, Yili's net profit growth rate in 2017 showed a clear slowdown trend, and operating cash flow also declined significantly.
With financial data all normal, the sharp drop in Yili shares puzzled many investors.
A private equity firm that has long held Yili shares revealed that they sold Yili shares in early April, mainly due to personal risks of the company's management, with high uncertainty. They stated that the company's chairman was absent from the Boao Forum, and the market previously expected the chairman to communicate during the first-quarter report, but he did not. In fact, the dairy industry is developing well, Yili's market share is steadily rising, and its leading position is solid. Consumption upgrades are favorable to their operating environment. For example, Mengniu Dairy just hit a new high the day before yesterday, showing a stark contrast with Yili's trend, mainly due to management reasons. As the leading dairy stock, Yili's decline dragged down the entire industry today.
This article is compiled and edited by New Distribution.
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