Inner Mongolia Yili Industrial Group Co., Ltd. (600887)

Stock Analysis Report | Industry: Dairy | Report Date: September 13, 2026 | Report Date: September 13, 2026; price and market data as of the close on September 11, 2026. Shareholder structure data mainly as of June 30, 2026, subject to quarterly lag.

This report is automatically compiled and generated by AI based on public information and is for reference only. It does not constitute investment advice.

1. Core Summary

Yili reported total operating revenue of approximately RMB 115.931 billion in 2025, up 0.13% year-on-year; net profit attributable to shareholders of RMB 11.565 billion, up 36.82%; non-recurring net profit attributable to shareholders of RMB 11.068 billion, up 84.13%; net margin of 9.96% and ROE of 20.87%; net operating cash flow of approximately RMB 14.344 billion, with profitability reaching a stage high. In the first half of 2026, total operating revenue was RMB 64.490 billion, up 4.13% year-on-year, but net profit attributable to shareholders was RMB 5.759 billion, down 20.02% year-on-year, mainly affected by the RMB 1.547 billion goodwill impairment on Ausnutria, approximately RMB 908 million in inventory write-downs, and Q2 income tax supplemental payments; excluding relevant one-off factors, the company's core operating profit was approximately RMB 8.38 billion, up approximately 10% year-on-year.

The company's fundamentals still reflect the scale, brand, and channel advantages of a nationwide dairy leader, with liquid milk, milk powder and dairy products, and cold beverages as the main revenue sources. In 2025, the combined revenue share of the two high-gross-margin businesses, milk powder and dairy products and cold beverages, rose to 36.74%. In the first half of 2026, the gross margin of liquid milk was 34.15% and the gross margin of cold beverages was 39.06%. Product mix optimization and lower raw milk costs jointly supported the gross margin rising to 36.43%. The company remains in a leading position in sub-segments such as infant formula, adult milk powder, and cold beverages.

The company extends upstream by holding a stake in Youran Dairy and signing a raw milk procurement framework, while relying mainly on distribution and supplemented by direct sales across an omni-channel system to control the end market. It recently plans to repurchase RMB 1 billion to RMB 2 billion of shares and cancel all of them; the plan still requires shareholder meeting review. The company plans a cash dividend payout ratio for 2025-2027 of no less than 75% of net profit attributable to shareholders, giving shareholder return policy a certain degree of continuity.

As of September 11, 2026, the stock closed at RMB 26.66, above MA5, MA10, and MA20, but MACD was approximately -0.02 and RSI approximately 52, and after a volume-backed advance in early September, trading volume declined, with no effective breakout above the resistance zone near RMB 27. The current technical pattern is closer to a relatively strong repair within range-bound trading, and the short-term trend still needs price breakout and volume confirmation.

2. Company Overview

2.1 Basic Information

2.2 Main Business and Product Layout

• Liquid milk: 2025 revenue RMB 70.42 billion, accounting for 60.90%, gross margin 31.43%
• Milk powder and dairy products: 2025 revenue RMB 32.77 billion, accounting for 28.34%, gross margin 41.58%
• Cold beverage products: 2025 revenue RMB 9.822 billion, accounting for 8.49%, gross margin 37.89%
• Others: 2025 revenue RMB 1.532 billion, accounting for 1.32%, gross margin 1.78%
• Others (supplementary): 2025 revenue RMB 1.091 billion, gross margin 43.50%
• 2026H1: Liquid milk RMB 36.59 billion (56.88%, gross margin 34.15%); milk powder and dairy products RMB 16.85 billion (26.19%, gross margin 41.25%); cold beverage products RMB 9.073 billion (14.10%, gross margin 39.06%)
• Revenue structure optimization: the combined revenue share of the two high-gross-margin businesses, milk powder + cold beverages, rose from 30.34% in 2023 to 36.74% in 2025
• Brand matrix: Satine, Ambpomial, Jinlingguan, Chocliz, Yoyi, Changqing, Miaozhi, QQ Star, Yili Pro, etc.
• Organizational structure: divided by business division, building six major product business groups: liquid milk, infant nutrition, adult nutrition, frozen drinks, yogurt, and cheese
• Overseas layout: subsidiaries The Chomthana (Thailand), PT Yili Indonesia Dairy, Westland Dairy, Oceania Dairy, and Ausnutria Dairy's overseas subsidiaries; products are sold overseas but the domestic market remains primary
• The 2026 interim report basis added a new "premium milk protein" product series

2.3 Position in the Upstream and Downstream Industry Chain and Cost-Profit Structure

Yili occupies the "midstream processing + strong brand" position in the dairy industry chain, but extends toward "quasi-upstream" through equity participation in and control of pastures (Youran Dairy) and long-term agreements to lock in milk sources, while also controlling downstream end markets through a nationwide deep distribution network, forming an integrated structure of "milk sources upstream and channels downstream." The following expands in order on the upstream cost side, downstream customer side, working capital occupation, and gross margin/net margin trends.

• The core real input is raw milk (fresh milk), followed by auxiliary materials such as packaging materials, sugar, and additives; the procurement model is clearly differentiated: raw milk is bound to milk sources through an "interest linkage mechanism + embedded services," while other raw and auxiliary materials are centrally procured through bidding to improve bargaining power (Yili 2025 annual report/2026 interim report "Business Model—Procurement Model" section).
• Deep binding to upstream raw milk: on 2026-06-29, Yili's wholly owned overseas subsidiary Boyuan Holdings completed the subscription of new shares in Youran Dairy (9858.HK), increasing its shareholding from 33.93% to 36.07%, becoming the largest shareholder of Youran Dairy; it also signed a supporting three-year purchase and sales framework agreement for 2027–2029, under which Youran will give Yili priority supply of no less than 70% of raw milk each year, totaling approximately RMB 70 billion over three years (Source: Chengtong Securities 2026-09-10 research report reprint, DoNews/Commercial Data Pie 2026-07-13).
• Youran Dairy scale (as of end-2025): operating 100 pastures, 15 feed production bases, 16 forage production bases, 618,800 dairy cows + 19,900 dairy goats, 2025 raw milk output of 4.2325 million tons (+12.9%).
• Current upstream difficulties (important background): raw milk oversupply and low milk prices, with upstream pastures suffering widespread losses; Youran Dairy's net profit attributable to shareholders in 2023–2025 was -RMB 1.050 billion/-RMB 691 million/-RMB 432 million respectively (cumulative losses of RMB 2.173 billion over three years), with an asset-liability ratio of 72.05% at end-2025 and a short-term funding gap of approximately RMB 14.17 billion (Source: DoNews/Commercial Data Pie 2026-07-13, Youran Dairy financial report basis).
• Bargaining structure assessment: Yili is not simply a price taker on the raw milk side—through equity participation in and control of pastures and long-term agreements to lock in milk sources, it has strong bargaining power over upstream players; however, during industry downturns it will proactively "concede profits" to upstream players to maintain supply chain stability (shortening payment cycles, maintaining relatively high purchase prices). Claims such as "self-owned milk source proportion of 40%+" and "Yili's milk purchase price decline smaller than the market milk price decline" come from retail investor posts on Xueqiu/Eastmoney, are individual opinions, and have not been cross-verified; they are for reference only.
• Upstream supplier concentration: this search did not obtain official disclosure data on Yili's total procurement share from its top five suppliers—data gap; it is recommended to refer to the "Major Suppliers" section of the latest annual report.
• Sales model: mainly distribution, supplemented by direct sales, building an omni-channel system covering supermarkets, convenience stores, traditional channels, snack stores, membership stores, e-commerce, instant retail, food service, and special channels (Yili annual report "Business Model—Marketing and Sales Model").
• Customer concentration: this search did not obtain official disclosure data on Yili's "total share of top five customers"—data gap; it is recommended to refer to the "Major Customers" section of the latest annual report.
• Structural bargaining assessment: dairy products are fast-moving consumer goods, and channel payment terms are usually 60–90 days (some reports say supermarket channel payment terms are as long as 60–90 days, see 163.com 2025-11-11 article, which is media speculation, not company disclosure).
• Yili controls end markets through deep distribution + strong brands and has long operated through an OPM (occupying upstream and downstream funds) strategy; however, during industry downturns it needs to concede profits to distributors, control goods, and stabilize prices, putting pressure on the price system.
• Contract liabilities signal: end-2025 RMB 10.564 billion -> end-2026Q1 RMB 5.399 billion, a sharp decline, possibly reflecting distributors' willingness to make advance payments and stock up / tightening liquidity (single source, see explanation in the working capital item).
• The following data comes from a Sohu reprint of an "Erer Finance" article (2026-05-20, textId=1014048498), a single source and not a company announcement; it is recommended to recalculate and verify against the annual report: accounts receivable turnover days 9.43 days in 2024 -> 9.23 days in 2025 -> 8.60 days in 2026Q1 (extremely short, strong downstream cash collection); accounts payable turnover days 60.54 days in 2024 -> 57.39 days in 2025 -> 52.02 days in 2026Q1 (faster payments to upstream, interpreted as supporting upstream during the downturn); contract liabilities end-2025 RMB 10.564 billion -> end-2026Q1 RMB 5.399 billion (sharp decline, possibly reflecting distributors' willingness to make advance payments and stock up / tightening liquidity). In addition, 2022 accounts receivable RMB 3.088 billion, selling expenses RMB 22.9 billion (Kingfisher Capital/Yema Finance, 2023, historical data). Multiple academic papers (such as "Research on the Impact of OPM Strategy on Working Capital Management Efficiency—Taking Yili Co., Ltd. as an Example") point out that Yili is a typical representative of the OPM strategy, occupying supplier funds through accounts payable and accelerating its own cash collection, with working capital turnover efficiency superior to Mengniu.
• Official disclosure data on Yili's total share of top five customers was not obtained this time (data gap; it is recommended to refer to the "Major Customers" section of the latest annual report); the total procurement share of the top five suppliers was likewise not obtained (data gap; it is recommended to refer to the "Major Suppliers" section of the latest annual report). Market share data are based on Nielsen + Sintun third-party retail research (2025 annual report), which is third-party research rather than official statistics, and the original liquid milk text did not provide a specific percentage (only stating "first"): infant formula 18.3% (+1.0pct year-on-year, first), adult milk powder 25.0% (+1.0pct, first), cheese 2C offline channel 19.1% (+0.1pct), cold beverage market first (31 consecutive years as leader); 2026H1 update: infant formula share rose to 18.6%, adult milk powder rose to 26.8% (Chengtong Securities).

Yili occupies the "midstream processing + strong brand" position in the dairy industry chain: it extends toward "quasi-upstream" through equity participation in and control of pastures (Youran) and long-term agreements to lock in milk sources, while also controlling downstream end markets through a nationwide deep distribution network, forming an integrated structure of "milk sources upstream and channels downstream." It is neither a commodity price taker like a pure upstream resource supplier nor squeezed by retailers like a pure downstream brand owner—essentially, it uses brand premium + channel control to earn the "processing gross margin spread between milk procurement and terminal selling price." Drivers for further gross margin/net margin improvement in the future: ① improvement in costs and the competitive landscape brought by a reversal in the raw milk cycle (moderate milk price increases help leaders gain share); ② product structure upgrading with a higher share of high-gross-margin milk powder, cold beverages, cheese, and toB/functional nutrition products; ③ scale and supply chain efficiency. The main drags are the Ausnutria goodwill impairment and the potential risk from upstream Youran's high debt.

3. Financial Data and Valuation Analysis

3.1 Recent Operating Performance

2026H1 gross margin 36.43% (+0.38pct); selling expense ratio 17.73% (-0.57pct); administrative expense ratio 4.45% (+0.06pct); net margin 8.59% (-3.13pct). The sharp drop in 2026Q2 profit was mainly due to two one-off factors: asset impairment losses of RMB 2.405 billion (goodwill impairment RMB 1.547 billion + inventory write-downs of approximately RMB 908 million, both related to subsidiary Ausnutria, versus only RMB 266 million in 25Q2); concentrated tax supplemental payments in the dairy industry in Q2, with Q2 income tax of RMB 856 million (25Q2 was RMB 230 million). Excluding the disturbance from RMB 2.461 billion of non-cash impairment, the company's stated first-half net profit grew >10%. 2026H1 by category: liquid milk RMB 36.590 billion (+1.29%), milk powder and dairy products RMB 16.845 billion (+1.61%, 2Q26 -3.5%), cold beverages RMB 9.073 billion (+10.25%). 2025 total profit RMB 13.0 billion (+28.31%), net margin nearly 10%; 2025 full-year cash dividends RMB 8.729 billion, payout ratio 75.48%, RMB 1.38 per share, with the annual report proposing a distribution of RMB 5.693 billion. Historical net profit attributable to shareholders: 2022 RMB 9.431 billion -> 2023 RMB 10.429 billion -> 2024 RMB 8.453 billion -> 2025 RMB 11.565 billion; 2024 non-recurring EPS RMB 0.95, 2025 RMB 1.75.

2026H1 revenue grew at a low single-digit rate, with liquid milk growth turning positive, but net profit attributable to shareholders fell 20.02% year-on-year, with reported profit significantly dragged down by large Ausnutria-related impairments (goodwill + inventory write-downs) and concentrated tax supplemental payments in the dairy industry in Q2; excluding the impairment impact, the company's stated first-half net profit grew >10%, and brokerages said Q2 net profit attributable to shareholders excluding impairment hit a record high for the same period, showing a clear divergence between operating fundamentals and reported profit. The 2025 annual report was the best performance in history (net profit attributable to shareholders RMB 11.565 billion, +36.82%), completing the "14th Five-Year Plan" 9%-10% net margin target, and the company committed to a dividend payout ratio of no less than 75% and no less than RMB 1.22 per share for 2025-2027, giving dividend returns a certain degree of certainty. Note that 2026H1 revenue has two coexisting figures, RMB 64.490 billion (total operating revenue) and RMB 64.331 billion (operating revenue), and 2025 revenue also has a basis difference between RMB 115.931 billion and RMB 115.636 billion, none of which were directly verified against the original exchange announcement.

3.2 Earnings Forecast

3.3 Valuation Level and Institutional Ratings

4. Recent News and Announcements

4.1 2026 Interim Report Disclosure: Revenue Grew but Net Profit Attributable to Shareholders Fell 20.02% YoY, Mainly Due to One-Off Asset Impairment Provisions of Approximately RMB 2.461 Billion

Yili Co., Ltd. (600887.SH) disclosed its 2026 interim report on the evening of 2026-08-26 (interim report summary announcement date 2026-08-27). Interim report main text basis: total operating revenue RMB 64.490 billion, +4.13% year-on-year, total profit RMB 7.314 billion; Eastmoney/multiple media brief basis: operating revenue RMB 64.331 billion, +4.13% year-on-year (the difference between the two bases should be the difference between operating revenue and total operating revenue, subject to the official interim report). Net profit attributable to shareholders RMB 5.759 billion, -20.02% year-on-year (approximately RMB 7.2 billion in the same period of 2025); non-recurring net profit attributable to shareholders RMB 5.596 billion, -20.25% year-on-year. By quarter: Q1 revenue RMB 34.741/34.825 billion (+5.47%), net profit attributable to shareholders RMB 5.395 billion (+10.68%); Q2 net profit attributable to shareholders only RMB 364 million, approximately -84.35% year-on-year and approximately -93% quarter-on-quarter. The sharp profit decline was mainly due to: one-off asset impairment provisions of approximately RMB 2.461 billion, including RMB 1.547 billion goodwill impairment on Ausnutria Dairy and RMB 908 million inventory write-downs (mainly from Ausnutria channel inventory cleanup), plus a small amount of fixed asset impairment of RMB 1.8095 million. Net operating cash flow RMB 9.759 billion, +229.23% year-on-year (China Fund News basis); a Guotai Haitong research report said 2Q26 net operating cash flow was RMB 6.02 billion, +198.8% year-on-year (different bases/periods, note). No profit distribution and no capital reserve conversion to share capital for the 2026 interim period (dividends are implemented according to the full-year plan of no less than 75% of net profit attributable to shareholders). Excluding the above non-cash impairment impact, the company's stated/brokerage-estimated first-half net profit can achieve double-digit growth. Sources: cnfin.com interim report announcement; finance.eastmoney.com/a/202608263854719060.html; China Securities Journal epaper 2026-08-27 B168; Sina Finance interim report announcement page.

4.2 Announcement on Provision for Asset Impairment (Lin 2026-056): Total Provision of RMB 2.461 Billion in the First Half, Including RMB 1.547 Billion Goodwill Impairment on Ausnutria

Yili Co., Ltd. disclosed an announcement on provision for asset impairment (Announcement No. Lin 2026-056, disclosure date 2026-08-27). In the first half of 2026, total asset impairment provisions were RMB 2,460,781,900 (RMB 2.461 billion, unaudited), a non-cash item. Details: credit impairment loss RMB 4.9067 million; inventory write-down loss RMB 907,520,800 (RMB 908 million); fixed assets and other impairments RMB 1.8095 million; goodwill impairment RMB 1.547 billion (Ausnutria Dairy, as the company lowered its future milk powder business growth expectations and engaged Shanghai Dongzhou Asset Appraisal). Source: cnfin.com/announ/detail ... id=841082249183.

4.3 New Round of Repurchase and Cancellation Plan (Lin 2026-059): Plans to Repurchase RMB 1 Billion-RMB 2 Billion and Cancel All, Price Cap RMB 39.53/Share

Yili Co., Ltd. disclosed for the first time a new round of repurchase and cancellation plan (Announcement No. Lin 2026-059, first disclosed 2026-08-27, plan date 2026-08-25). Amount: no less than RMB 1 billion (inclusive) and no more than RMB 2 billion (inclusive); price cap RMB 39.53/share (no higher than 150% of the average price over the 30 trading days before the board resolution); purpose: all to be canceled in accordance with law and to reduce registered capital (not employee stock ownership/equity incentives); source of funds: the company's own funds; term: no more than 6 months from the date of shareholder meeting approval; estimated number of repurchased shares: 25,297,243 shares to 50,594,485 shares, representing 0.40% to 0.80% of total share capital. Procedure: approved by the 12th Board of Directors temporary meeting on 2026-08-25 with 11 votes in favor, still subject to shareholder meeting review. Relevant shareholder commitments: shareholder Hohhot Investment Co., Ltd., which holds more than 5%, has no reduction plan in the next 3 or 6 months; the company has no controlling shareholder and no actual controller. Sources: CFI vipwt1.cfi.cn/p20260826006633.html; cnfin.com; finance.eastmoney.com/a/202608263855186476.html; stcn.com/article/detail/4130269.html.

4.4 Comparison with Historical Repurchase and Cancellation Record: The 2024 Plan Spent Approximately RMB 1.007 Billion to Repurchase Approximately 40.54 Million Shares, Completed Cancellation on 2025-05-20

For comparison, Yili's 2024 plan of the same scale (RMB 1 billion-RMB 2 billion, price cap RMB 41.88/share) actually repurchased 40,540,038 shares (approximately 40.54 million shares), spending approximately RMB 1.007 billion (RMB 1,006,823,221.86, excluding fees), completed cancellation on 2025-05-20, and reduced registered capital from RMB 6,365,900,705 to RMB 6,325,360,667. In May 2023, 32.4684 million shares were canceled. If this round is completed at the upper limit, the three rounds of repurchase and cancellation combined will exceed 123 million shares. Sources: China Securities Journal epaper.cs.com.cn (2025-11-29 announcement Lin 2025-086); businesstimescn.com/articles/624211.html; aijingu.com/notices/600887.

4.5 The First Extraordinary Shareholder Meeting of 2026 Is Scheduled for 2026-09-16 to Review the Share Repurchase Plan (Special Resolution)

Yili's first extraordinary shareholder meeting of 2026 is scheduled for 2026-09-16 (on-site at 14:00, Jinchuan Development Zone, Hohhot), to review the "Proposal on the Plan to Repurchase Company Shares by Centralized Bidding" (including 8 sub-proposals, special resolution, separate vote counting for small and medium-sized investors). Notice announcement No. Lin 2026-060, dated 2026-08-27; meeting materials disclosure date 2026-09-09. As of the time of writing, the voting result is unknown, and whether the repurchase plan is approved remains to be confirmed. Sources: vip.stock.finance.sina.com.cn announcement pages id=12547483, 12589366; cnfin.com; sohu.com/a/1067961400.

4.6 Dividends and Shareholder Returns: No Distribution or Capitalization for 2026 Interim, 2025-2027 Dividend Payout Plan No Less Than 75% of Net Profit Attributable to Shareholders

Yili made no distribution and no capitalization for the 2026 interim period (board proposal, 2026-08-27). Dividend plan (2025-2027): annual cash dividend payout ratio no less than 75% of net profit attributable to shareholders for the year, with cash dividend per share no less than RMB 1.22; the 2026 dividend will be implemented accordingly (multiple research reports estimate on this basis that the minimum dividend corresponds to a dividend yield of approximately 4.5%). 2025: cash dividend per share RMB 1.38, total cash dividends RMB 8.729 billion, accounting for 75.48% of net profit attributable to shareholders; based on the closing price of RMB 26.45 on 2026-08-27, the static dividend yield is approximately 5.22%. Total cash dividends + repurchases for the full year represented a combined return of approximately RMB 8.98 billion, accounting for 77.63% of net profit attributable to shareholders. Since listing, cumulative cash dividends have been paid 28 times, totaling RMB 67.295 billion, ranking first in the A-share dairy industry. Dividend implementation: Eastmoney dividend table shows a 2026-05-29 announcement of 10 distributions of RMB 9, with record date 2026-06-04 and ex-rights/ex-dividend/payment date 2026-06-05 (implementation plan); the 2026-08-27 record is no distribution and no capitalization (interim proposal). Sources: finance.eastmoney.com/a/202608263855186476.html; sohu.com/a/1069017404_122014422; emweb.securities.eastmoney.com/BonusFinancing (SH600887); Guotai Haitong research report (Sina Finance).

4.7 Shareholder Developments: Top Ten Shareholders at End-Q2, Prominent Individual Investor Chen Fashu Raised Stake to 0.99% as Seventh Largest Tradable Shareholder

Yili's top ten shareholders at end-Q2: Hohhot Investment Co., Ltd. 8.51% (first); Hong Kong Securities Clearing Company Limited (northbound funds) 8.46% (second); Chairman Pan Gang 3.55% (third). Prominent individual investor Chen Fashu first appeared among the top ten shareholders in Q1 2026, continued to increase holdings by 2 million shares in Q2, with the stake rising to 0.99%, making him the seventh largest tradable shareholder (single-category media basis, consistent across multiple reprints, not directly verified against the interim report shareholder details). Shareholder pledges: the aijingu announcement list shows announcements such as partial shareholder share pledge extension on 2025-07-09 and shareholder share pledges on 2025-05-23, which are earlier records; no new large pledge announcements were seen recently in 2026 (not exhaustively checked, note limitations). Sources: finance.eastmoney.com/a/202608263855186476.html; finance.sina.com.cn/wm/2026-08-26/doc-iniprytk0850887.shtml; stcn.com/article/detail/4130269.html; aijingu.com/notices/600887/0-0-1.html.

4.8 Upstream Supply Chain: Boyuan Holdings Completed Subscription of New Youran Dairy Shares with 36.07% Stake to Become Largest Shareholder, Supporting Three-Year Approximately RMB 70 Billion Purchase and Sales Framework

Youran Dairy: on 2026-06-29, Yili's wholly owned overseas subsidiary Boyuan Holdings completed the subscription of new shares in Youran Dairy, with a total shareholding of 36.07%, formally becoming Youran Dairy's largest shareholder; it also signed a supporting three-year purchase and sales framework agreement for 2027-2029—Youran will give Yili priority supply of no less than 70% of raw milk each year, totaling approximately RMB 70 billion over three years (brokerage research basis, not directly verified against the original announcement). Ausnutria goodwill impairment history: completed the acquisition of Ausnutria in 2022, original goodwill of RMB 5.133 billion (including exchange rate changes); impairment of RMB 3.037 billion in 2024 and another impairment of RMB 1.547 billion in 2026H1; remaining goodwill book value to date is approximately RMB 597 million, and subsequent large impairment pressure has decreased. Sources: Chengtong Securities 2026-09-10 company tracking (Sina Finance vReport); BOCI International 2026-09-11 research report.

4.9 Other Announcements and Governance: Cancellation of Supervisory Board and Amendment of Articles, Completion of USD Bond Repayment, Sixth Long-Term Service Plan Holder Meeting, Winning Bid for Nutritious Meal Procurement Project

Corporate governance: the 2025-11-28 shareholder meeting approved the proposal to "Cancel the Supervisory Board and Amend the Articles of Association"; on 2025-11-29 it issued an announcement notifying creditors of the reduction of registered capital due to share repurchase (Lin 2025-086, filing period 2025-11-29 to 2026-01-12), articles of association (amended November 2025). Debt: on 2025-11-21 it announced completion of repayment of USD bonds by an overseas wholly owned subsidiary (Lin 2025-084). Employee stock ownership/long-term service plan: on 2026-09-04 the second holder meeting of the sixth long-term service plan was held (by telecommunication), with 392/394 holders attending, representing 285,100,000 units, and reviewed and approved the "Long-Term Service Plan Holder Routine Management Measures" (Announcement No. Lin 2026-063, 2026-09-05). Business winning bid: Qichacha data shows that on 2026-09-10 Yili won the bid for the Dachang Hui Autonomous County Education and Sports Bureau 2026-2028 school year rural primary school student nutrition improvement plan nutritious meal procurement and distribution project, with a winning bid amount of RMB 14.00 million (the amount is relatively small and is routine operating information). Industry/policy background: in the first half, raw milk continued to destock, milk prices remained low, and dairy cow inventories declined; the company expects capacity destocking to continue in the second half; the judgment that the dairy industry cycle is expected to reverse in 2026 and milk prices will rise moderately comes from brokerage research reports (not company announcements). The concentrated tax supplemental payments in the dairy industry in Q2 (single-quarter income tax RMB 856 million vs RMB 230 million in the prior-year period) are based on company earnings briefings/research reports, with no independent regulatory policy announcement seen. Sources: cnfin.com/announ/detail ... id=841851292703; Haigang Information/CFI announcement list; gudongtech.com/depth/3090752609551082; Chengtong Securities/Guotai Haitong research reports (Sina Finance).

4.10 Background Data: Previously Disclosed 2025 Annual Report and 2026 Q1 Report

Yili's full-year 2025 revenue was approximately RMB 115.636 billion (+0.21%, a certain brokerage research basis)/RMB 115.931 billion (+0.13%, Tongbi Finance basis)—there is a difference between the two sources, subject to the annual report. 2025 net profit attributable to shareholders RMB 11.565 billion, +36.82% year-on-year; 2026 Q1 revenue RMB 34.741 billion (+5.47%), net profit attributable to shareholders RMB 5.395 billion (+10.68%). Sources: reportify.cn/reports/...; gudongtech.com/depth/3090752609551082.

4.11 Data Uncertainty Notice

1) Data as-of dates: prices and announcements in this article are mostly information from the period 2026-08-26 to 2026-09-11; the first extraordinary shareholder meeting of 2026 is scheduled for 2026-09-16, and as of the time of writing the voting result is unknown, so whether the repurchase plan is approved remains to be confirmed. 2) Basis differences need verification: interim report operating revenue RMB 64.331 billion vs total operating revenue RMB 64.490 billion; full-year 2025 revenue RMB 115.636 billion vs RMB 115.931 billion; net operating cash flow RMB 9.759 billion (half-year) vs RMB 6.02 billion (2Q single quarter). All are recommended to be based on the original official annual report/interim report. 3) Single-source/unverified items: Chen Fashu's 0.99% stake and 2 million share increase, Youran Dairy's 36.07% stake and RMB 70 billion purchase and sales framework, 2025 dividend per share of RMB 1.38, etc., mainly come from media or brokerage research reports and were not checked one by one against the original Shanghai Stock Exchange announcement documents. 4) Announcement numbers have gaps (Lin 2026-056, 059, 060, 063, etc. appearing together), presented according to the actual disclosure dates of each announcement, without an exhaustive complete announcement list. 5) Stock price/market capitalization are background only (8-26 close RMB 26.10, market capitalization approximately RMB 165.1 billion; 8-27 close RMB 26.45), not the focus of this task, and are historical static data.

5. Stock Price Trend and Technical Analysis

5.1 Price Overview

5.2 Technical Indicators

As of September 11, 2026, Yili closed at RMB 26.66, standing above MA5, MA10, and MA20, but MA5 and MA10 are close, and the short term has not yet formed a clear one-way acceleration. A volume-backed advance occurred from August 27 to September 4, but after September 7 it failed to continue breaking above RMB 27, and the price shifted into consolidation around RMB 26.4 to RMB 26.9. MACD was approximately -0.02 and near the zero line, and RSI(14) was approximately 52.01, both showing momentum in a neutral-to-weak state or awaiting confirmation. Bollinger Bands show resistance near RMB 27.0 to RMB 27.3 above, while RMB 26.1 to RMB 26.3 below is a moving average and volume-dense zone. On the fund side, main force net inflow on September 11 was approximately RMB 155 million, but there were clear net outflows in the preceding days, and sustainability still needs to be observed. Overall, the current situation is closer to a relatively strong repair within range-bound trading, and whether it can strengthen further depends on a price breakout near RMB 27.0 and volume confirmation.

5.3 Short-Term Trend Outlook (Next Week, Scenario Analysis, For Reference Only)

⚠️ Risk Notice: The following content is only a subjective scenario analysis based on data as of the close on September 11, 2026. It does not constitute investment advice or buy/sell instructions.

① Key Technical Levels

② Next-Week Scenarios (Subjective Weighting, Not Statistical Probability)

• Range-bound consolidation (relatively high subjective weight, about 50%; this weight is a subjective heuristic judgment based on current technical indicators and fund flows, not statistical probability): reference trading range RMB 26.3 to RMB 27.0. Trigger conditions include the stock price remaining between RMB 26.3 and RMB 26.8, trading volume of approximately 45 million to 65 million shares, small main force inflows and outflows without consecutive large net outflows, repeated resistance near RMB 27 but support near RMB 26.3. Under this scenario, MACD and RSI may continue to fluctuate in the neutral zone.
• Weaker downside (medium subjective weight, about 30%; this weight is a subjective heuristic judgment, not statistical probability): reference trading range RMB 25.9 to RMB 26.4. Trigger conditions include an effective close below RMB 26.3, increased volume and fund flows turning to consecutive net outflows, overall weakness in the consumer sector or large-cap blue chips, and MACD negative histogram re-expanding with RSI(14) falling below 50. If RMB 25.9 is further broken, the next observation area is RMB 25.0 to RMB 25.3; if volume increases on the decline, the weakness confirmation is stronger.
• Rebound strengthening (relatively low subjective weight, about 20%; this weight is a subjective heuristic judgment, not statistical probability): reference trading range RMB 26.8 to RMB 27.3. Trigger conditions include an effective close above RMB 27.0, single-day trading volume reaching approximately 75 million shares or more or turnover reaching approximately RMB 1.9 billion or more, main force net inflow for two consecutive trading days, MACD histogram turning positive or continuing to narrow, and RSI(14) moving into the 55 to 60 range. If it breaks above RMB 27.0 with volume and holds, the next observation area is near RMB 27.3; if volume is insufficient, be alert to a pullback after a spike or a false breakout.

③ Fund and Liquidity Background

As of September 11, 2026, the turnover rate was approximately 0.77%, and turnover was approximately RMB 1.282 billion; turnover from September 8 to September 11 was approximately 0.71% to 0.78%, average trading volume over the most recent 5 trading days was approximately 51 million shares, and recent daily turnover was broadly approximately RMB 1.2 billion to RMB 2 billion. There was relatively obvious volume expansion from August 27 to September 4, followed by a decline in volume, indicating that short-term trading heat has decreased from the earlier peak. On shareholder structure, as of June 30, 2026, the number of shareholders was approximately 412,500, and the top ten tradable shareholders held a total of approximately 2.084 billion shares, approximately 33.12% of tradable shares, representing a certain degree of concentration but not high concentration. The Tonghuashun page did not display detailed institutional holdings such as funds, social security, trusts, and QFII, so it cannot be inferred that such institutions definitely do not exist. The minutes also include a related statement "as of September 8, 2026," but did not provide an independently verifiable updated source for shareholder structure, so data explicitly marked as June 30, 2026 are used as the main reference. Shareholder data have a quarterly lag and may not represent the real-time chip status on September 11, 2026. The above turnover rate and turnover indicate that the stock has normal trading liquidity, but recent trading heat has declined from the volume-backed phase, and an upward price breakout still requires additional volume confirmation.

If in the next week single-day trading volume consecutively reaches approximately 75 million shares or more, or turnover consecutively reaches approximately RMB 1.9 billion or more, and the stock price simultaneously holds the RMB 26.8 to RMB 27.0 range, this can be used as an observation signal of increased short-term capital participation; if volume expands but the stock price cannot hold that range, watch for the risk of resistance after a spike. These thresholds are set based on the stock's own recent trading volume and turnover ranges and are not fixed buy/sell standards.

④ Points to Watch (Observation Ideas Only, Not Operational Instructions)

• Watch whether the first support zone of RMB 26.3 to RMB 26.5 remains effective; the above is an observation idea, not an operational instruction.
• Watch whether the strong support zone of RMB 25.9 to RMB 26.1 is broken with volume; if broken, watch the RMB 25.0 to RMB 25.3 area; the above is an observation idea, not an operational instruction.
• Watch whether resistance near RMB 27.0 can be broken with the support of single-day trading volume of approximately 75 million shares or more or turnover of approximately RMB 1.9 billion or more; the above is an observation idea, not an operational instruction.
• Watch whether main force net inflow can shift from a single-day return to continuous inflow, while also watching changes in the MACD histogram and RSI(14); the above is an observation idea, not an operational instruction.

The above scenario analysis is based on the September 11, 2026 closing data and historical prices and technical indicator calculations. Short-term stock prices will also be disturbed by multiple factors such as news, fund flows, and the broader market environment. Technical indicators themselves have lag and limitations, do not guarantee actual future trends, and do not constitute buy/sell advice. Please make independent judgments based on the latest market information and bear investment risks yourself.

6. Industry Landscape and Competitor Analysis

6.1 Industry Status

China's dairy industry has shifted from the "Yili-Mengniu duopoly" to a "one superpower, many strong players" structure with Yili far ahead; the industry is in a period of deep adjustment: weak terminal consumption, contraction in ambient liquid milk, frequent price wars. In 2025, 19 A-share dairy companies had combined revenue of RMB 184.652 billion (-0.09%), with only 8 companies achieving positive revenue growth. The Matthew effect is intensifying: in 2025, the top three A-share dairy companies accounted for nearly 82% of revenue, and Yili alone accounted for 63% of the revenue of the 19 A-share dairy companies. Structural variables: ① the ceiling for the infant formula segment is declining (the number of infants aged 0–3 fell from approximately 41.9 million in 2020 to approximately 26.5 million in 2025, Frost & Sullivan); ② low-temperature fresh milk, cheese, and functional nutrition products are becoming new growth points; ③ raw milk destocking and milk prices bottoming.

6.2 Competitive Landscape

• Yili market share (Nielsen + Sintun third-party retail research, 2025 annual report basis): first in the liquid dairy retail sales share sub-market; infant formula 18.3% (+1.0pct) first; adult milk powder 25.0% (+1.0pct) first; cheese 2C offline channel 19.1% (+0.1pct); cold beverage market first, leading for 31 consecutive years. Note: this is a third-party research basis, not official statistics, and the original liquid milk text did not provide a specific percentage (only stating "first").
• 2026H1 update: infant formula share rose to 18.6%, adult milk powder rose to 26.8% (Chengtong Securities).
• Industry structural variables: the ceiling for the infant formula segment is declining (the number of infants aged 0–3 fell from approximately 41.9 million in 2020 to approximately 26.5 million in 2025, Frost & Sullivan); low-temperature fresh milk, cheese, and functional nutrition products are becoming new growth points; raw milk destocking and milk prices bottoming.
• Competitive landscape: Yili = full category + omni-channel + nationwide leader (leading in both scale and profit); Mengniu = mainly liquid milk, accelerating diversification into fresh milk/cheese/milk powder; Bright Dairy = regional leader in East China low-temperature fresh milk; New Hope Dairy = low-temperature fresh milk + cost-control growth stock; Feihe = single-track infant formula with high gross margin but under the greatest pressure.

6.3 Major Competitors

Yili = full category + omni-channel + nationwide leader (leading in both scale and profit, 2025 revenue RMB 115.6–115.9 billion, net margin 9.96% a record high); Mengniu = mainly liquid milk, accelerating diversification into fresh milk/cheese/milk powder (2025 revenue RMB 82.245 billion, gross margin 39.9%); Bright Dairy = regional leader in East China low-temperature fresh milk (2025 revenue RMB 23.895 billion, net profit attributable to shareholders a loss); New Dairy = low-temperature fresh milk + cost-control growth stock (2025 revenue RMB 11.233 billion, net margin 6.7%); Feihe = single-track infant formula with high gross margin but under the greatest pressure (2025 revenue RMB 18.113 billion, net profit attributable to shareholders -45.68%). Under the Matthew effect, Yili alone accounted for 63% of the revenue of the 19 A-share dairy companies in 2025, with the top three accounting for nearly 82% combined.

7. Risk Notice

• The Ausnutria business faces risks of continued impairment and operational recovery. In the first half of 2026, the company already provided RMB 1.547 billion of goodwill impairment on Ausnutria and approximately RMB 908 million of inventory write-down losses; if the milk powder business outlook, channel inventory, or profitability continues to fall short of expectations, it may still affect profit and asset quality.
• Supply-demand imbalance in the raw milk industry may transmit risks through the supply chain and asset side. Youran Dairy recorded consecutive losses in 2023–2025, had an asset-liability ratio of 72.05% at end-2025, and has a relatively large short-term funding gap; after Yili increased its stake to 36.07% and strengthened raw milk procurement binding, Youran's operating condition may affect Yili's supply chain stability and related investment and procurement arrangements.
• Liquid milk still accounts for the majority of the company's revenue. In 2025, liquid milk revenue was approximately RMB 70.42 billion, accounting for 60.90%, while the industry faces weak terminal demand, contraction in ambient liquid milk, price wars, and channel destocking pressure; if liquid milk volume and price recovery falls short of expectations, it may limit overall revenue growth and compress profit margins.
• In the first half of 2026, net profit attributable to shareholders fell 20.02% year-on-year, and Q2 net profit attributable to shareholders was only RMB 364 million, down 84.35% year-on-year; asset impairment and income tax supplemental payments and other factors caused significant fluctuations in reported profit. If larger impairments, tax burdens, or non-recurring items continue to appear, the company's profit growth may continue to deviate from core operating performance.
• The milk powder business faces demographic constraints and competitive pressure. The number of infants aged 0–3 corresponding to infant formula continues to decline. Although Yili's infant formula and adult milk powder market shares increased, milk powder business revenue declined year-on-year in Q2 2026, and market shrinkage and channel competition may affect its growth realization.
• The company uses a distribution-led omni-channel sales model, and contract liabilities fell from RMB 10.564 billion at end-2025 to RMB 5.399 billion at end-Q1 2026, which may reflect changes in distributors' stocking willingness or financial condition; if channel inventory, distributor collections, or the price system come under pressure, it may affect revenue recognition, expense investment, and cash turnover.
• The company has no controlling shareholder and no actual controller, with the largest shareholder holding 8.51%, and the ownership structure is relatively dispersed; at the same time, the proposed RMB 1 billion to RMB 2 billion repurchase and cancellation plan still requires shareholder meeting review, and if the plan is not approved or the execution scale is below expectations, shareholder return expectations may change.
• Some key company data have differences in basis or source, including 2025 and 2026H1 operating revenue and total operating revenue, operating cash flow, and the Youran Dairy purchase and sales framework, among others. Some market share and working capital data also come from third parties or single sources, which may affect judgments about operating trends and valuation levels.

8. Conclusion and Outlook

Yili's medium- to long-term growth logic mainly comes from leader share gains, improvement in the raw milk cycle, and product structure upgrading. Liquid milk revenue has shown signs of stabilization, and the share of high-gross-margin or structurally growing businesses such as milk powder, cold beverages, cheese, and functional nutrition products has increased, helping to improve overall profit margins; nationwide deep distribution, brand matrix, and upstream milk source layout also support the company in maintaining competitiveness during industry adjustment. The substantial profit repair in 2025 and core operating growth excluding one-off factors in the first half of 2026 show a temporary divergence between main business operating quality and reported net profit.

Follow-up focus includes the operational recovery of the Ausnutria business after impairment, changes in raw milk supply-demand and prices, whether high-gross-margin businesses such as milk powder and cold beverages can continue to grow, and whether price competition in liquid milk and channel inventory can further ease. Youran Dairy's role in supply chain assurance coexists with its losses and high debt, and Yili needs to strike a balance among stabilizing milk sources, maintaining the supply chain, and controlling asset risk.

From a market performance perspective, RMB 26.3 to RMB 26.5 forms short-term support, while RMB 27.0 to RMB 27.3 is resistance. Fund flows previously showed repeated outflows and returns, and the technical picture has not yet formed a clear one-way trend. The company's valuation, repurchase and cancellation, and high dividend payout constitute factors to watch for shareholder returns, but whether the repurchase plan is approved and subsequent execution remain to be confirmed, and future performance still depends on whether main business repair can continue to be realized.

Data Sources

• Yili Co., Ltd. (600887.SH) In-depth F9-PC_HSF9 Materials
• Yili Co., Ltd. (600887) Company Tracking: Core Categories Continue to Lead, Goodwill Impairment Drags Reported Profit_9FZT
• In-depthCompanyYili Co., Ltd. (600887) Asset Impairment Affects Profit Performance, Overall Operations Remain Stable and Upward_9FZT
• Yili Co., Ltd. (600887) 2026 Interim Report Review: Lighter Burden, Dairy Main Business Stable
• Research Report Indicator Express-Research Reports-Stock Channel-Securities Star
• 600847 Wanli Co., Ltd.
• https://finance.sina.com.cn/stock/relnews/cn/2026-09-10/doc-inirixks7623800.shtml.md
• Yili Co., Ltd. (600887)_Stock Quotes, Quote Homepage_CFI
• Inner Mongolia Yl ndstrl Grp C Ltd (600887) Stock Price & News - Finance
• Inner Mongolia Yili Industrial Group Co Ltd - Inner Mongolia Yili Industrial Group Co Ltd
• 600887 Yili Co., Ltd.
• Yili Co., Ltd. (600887)
• 600887 Yili Co., Ltd. - Main Business Scope
• SH.600887 Yili Co., Ltd. YILI IND - A-Share Real-Time Quote RT Quote - Company Information
• China Securities Journal - Inner Mongolia Yili Industrial Group Co., Ltd. - Company Code: 600887 Company Abbreviation: Yili Co., Ltd.
• Yili Co., Ltd. (600887)_Stock Overview_Stock Price_Real-Time Quotes_Chart_News_Stock Reviews_Financial Reports_FinScope-AI Makes Investing Easier
• Yili Co., Ltd. (600887) 2026 Interim Management Discussion and Analysis-Securities Star - Yili Co., Ltd. (600887) 2026 Interim Management Discussion and Analysis
• Yili Co., Ltd. (600887) Company Tracking: Core Categories Continue to Lead, Goodwill Impairment Drags Reported Profit
• Yili Co., Ltd. (600887) Company Tracking: Core Categories Continue to Lead, Goodwill Impairment Drags Reported Profit
• Inner Mongolia Yili Industrial Group Co., Ltd. - Inner Mongolia Yili Industrial Group Co., Ltd.
• From Yili and Mengniu's "Dairy Duopoly" to "One Superpower, No Strong Challenger," the Dairy Landscape Has Been Reshaped
• 2025 Dairy Annual Report Review: "One Superpower, Many Strong Players" Structure Solid, Milk Powder Companies' Growth Diverges
• Major Dairy Turn: Ambient Milk Falls Out of Favor, Dairy Companies "Compete" in Fresh Milk and Milk Powder-36Kr
• From Yili and Mengniu's "Dairy Duopoly" to "One Superpower, No Strong Challenger," the Dairy Landscape Has Been Reshaped - Who Is Leading, Who Is Falling Behind
• Dairy Annual Reports|Regional Dairy Companies Squeezed: Sunshine Dairy, Tianrun Dairy, Bright Dairy, and Western Animal Husbandry, Four Liquid Milk Companies, Saw Revenue Fall Sharply
• 2025 Dairy Annual Report Review: "One Superpower, Many Strong Players" Structure Solid, Milk Powder Companies' Growth Diverges
• From Yili and Mengniu's "Dairy Duopoly" to "One Superpower, No Strong Challenger," the Dairy Landscape Has Been Reshaped- DoNews Column - From Yili and Mengniu's "Dairy Duopoly" to "One Superpower, No Strong Challenger," the Dairy Landscape Has Been Reshaped
• https://finance.sina.com.cn/stock/observe/2026-05-22/doc-inhyumqn6148492.shtml.md
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• title: From Yili and Mengniu's "Dairy Duopoly" to "One Superpower, No Strong Challenger," the Dairy Landscape Has Been Reshaped