Can't achieve the "surround speed", how can Lu Minfang achieve the goal of "creating another new Mengniu"?

This article is based on public information, which is used only as information exchange and does not constitute any investment advice.

Produced | Company Research Office Large Consumer Group

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On September 4th, Lu Min, president of Mengniu Group, in the CCTV "Dialogue" column, once again mentioned the goal of "Create another new Mengniu" in 2025.

This is not the first time Lu Minfang released his words. In 2017, Lu Minfang, who was just in charge of Mengniu for a year, called out the goal of "to reach 100 billion sales in 2020". However, in 2020 and 2021, Mengniu's succession with 100 billion yuan in sales was instead of its competitors, Eli, took the lead in the 100 billion threshold in 2021.

In the first half of 2022, Mengniu's income profit increased doubled, but the scale was further opened by Eli. In the past, the Chinese dairy industry, which has been monopolized by the "double oligopoly", should develop towards the situation of "a large and strong" situation, which depends more on whether Mengniu can narrow the gap with Yili.

01. Half -year income increased by 4%Mongolian Niu lost "surround speed"

Mengniu's founder Niu Genzheng once proposed a spaceship law, "Mengniu either grows at high speeds or is destroyed at high speeds. If the surround speed is not reached, it can only fall; only by surpassing the surround speed can the company develop sustainable."

It is the pursuit of high growth in high growth that Mengniu, which was founded 6 years later than Eli, only exceeded Yili in revenue in only 8 years, and led Yili for 4 consecutive years from 2007 to 2010.

In the first ten years of the 21st century, these two Inner Mongolia dairy companies chased me and evenly matched. More importantly, both sides have broken regional restrictions and become national dairy companies. China's dairy industry has also formed a "double oligopoly" competition pattern.

According to Euromonal International data, in 2021, the market share of Yili and Mengniu was 25.8%and 22.0%, respectively, totaling 47.8%. The industry CR5 was 57.7%, and the third, fourth, and fifth accounted for only 10%of the market share. Yili Mengniu not only occupied half of the industry, but also left his peers far behind.

However, in recent years, the competition between Yili and Mengniu has changed some subtle changes. Especially after Yilian's revenue exceeded the 100 billion mark, Mengniu seemed to be unable to compete with Yili in the same grade.

From 2011 to 2021, the income gap between Mengniu and Yili changed from 60 million to 22.5 billion, and the income difference was further expanded.

In the first half of 2022, Mengniu's revenue was 47.72 billion, a year -on -year increase of 3.96%; gross profit margin was 36.6%, a year -on -year decrease of 0.2 percentage points; net profit attributable to mothers was 3.75 billion, an increase of 27.32%year -on -year, and revenue and net profit increased.

But in comparison, Yili's semi -annual report may be even more eye -catching. In the first half of 2022, Yili revenue was 63.46 billion, an increase of 12.31%year -on -year; gross profit margin was 33.5%, an increase of 1.6 percentage points year -on -year; net profit attributable to mothers was 6.13 billion, an increase of 15.2%year -on -year. Further improvement.

In contrast, Mengniu's gross profit margin was 3 percentage points higher than Eli, but Mengniu's income was only 75%of Yili, and the net profit was only 60%of Yili. Except for the relatively advantageous costs, Mengniu is not as good as Yili in terms of income and profitability.

According to Eastern Wealth data, 46 institutions predicted that Illi's annual revenue in 2022 may reach 128 billion. If Mengniu's revenue growth rate in 2022 is only one digit, at the income level, the gap between Mengniu being opened by Yili may change from 22.5 billion in 2021 to more than 30 billion.

Judging from the current status of Mengniu, the company's operations obviously have not reached the "surround speed". Mengniu CEO Lu Min thought that the "two trillion" goals achieved in 2020 have only completed half.

In 2020, the market value of Mengniu exceeded 100 billion yuan, and the current market value of Mengniu is also around HK $ 130 billion. However, the goal of reaching hundreds of billions of sales in 2020 was not achieved, but Illi was first stepped to become the first 100 billion dairy company in China.

In the future, whether China's dairy industry will maintain the "double oligopoly" competition pattern, or it will become a "super -strong" situation, to a greater extent, it depends on how Mengniu develops.

22, 30 billion major items, Telun Su can't escape Yili "encirclement and suppression"

The dairy industry is essentially a homogeneous, highly competitive industry. The main products of Mengniu and Yili can be divided into cold drinks such as liquid milk, milk powder and cheese products, ice cream, and ice cream. Both Yili or Mengniu, liquid milk is the basic disk of the company.

In the first half of 2022, Mengniu liquid milk revenue revenue of 39.67 billion, accounting for 83.1%; Yili liquid milk income was 42.89 billion, accounting for 67.6%. The gap between the two companies on liquid milk is not obvious, but in contrast, Mengniu's dependence on liquid milk business is higher.

Liquid milk can be divided into milk, yogurt, seasoning, etc., and each can be subdivided into two types: normal and low temperature. Normal temperature milk has the characteristics of long shelf life. Ellie and Mengniu first broke the regional sales radius and promoted to national dairy companies by occupying the normal temperature milk market.

Dairy products are serious, and the competition between Mengniu and Yili is even more comprehensive.

For example, in the field of high -end warm milk, Mengniu launched Telun Su in 2005, and Yili launched the Golden Code Organic Milk in 2006; the seasoning in the seasoning milk, Mengniu has sour breasts, Yili has good sour breasts, Mengniu has real fruits, Yili has valley grains Much; in "Children's Growth Milk" products, Yili has QQ stars and Mengniu has a future star. Mengniu and Yili's channels and outlets across the country are enough to support investing in sales costs of more than 10 billion yuan each year. Channels and publicity have built market barriers far higher than their peers.

The most typical example is the competition of room temperature yogurt. In 2009, Moslian, launched by Guangming Dairy, took the lead in opening the domestic normal temperature yogurt market, and it was difficult to find an opponent for a period of time.

However, after the protection period of the packaging of the packaging of the sterile brick bricks in Guangming and Taler, at the end of 2013, Mengniu and Ily successively launched the pure Zhen Zhen and An Musi for the products facing the normal temperature yogurt market.

Although it was 4 years later than Moslian, Mengniu and Yili later lived up with channels and publicity advantages. According to Euromonatt's international data, in 2021, the market share of An Musi, Chunzhen, and Moslian was 19.6%, 9.8%, and 4%, respectively.

In the contest of Mengniu and Yili's liquid milk single product, Mengniu has a large single -product Telun Su with annual sales of more than 30 billion yuan, and a large single product of more than 10 billion yuan. The single product Jin Dian, An Muji, and Yili Pure milk, over 10 billion large single products excellent acid milk, formed a "2+2+x" liquid milk product matrix.

In 2021, Telun Su became the largest single product in the world with a sales of 30 billion+, helping Mengniu win the first single product list. However, with the advantages of Jin Dian, An Musi, pure milk, etc., Yili realized the siege of Mengniu.

In the field of liquid milk, Mengniu is more like a "special student", and Yili is like a "superior student" with a comprehensive development. Although the gap between Mengniu and Yili is not obvious, in addition to the super large item of Telunsu, Mengniu may also need to cultivate more tens of billions of or two billion large items to improve the product echelon like Illi.

03. Can milk powder business scales support the tens of billions?

It can be seen from the recent semi -annual report that the gap between Mengniu and Yili is not liquid milk, but business outside liquid milk.

In the first half of 2022, Mengniu Ice Cream's business revenue was 3.90 billion yuan, an increase of 29.9%year -on -year; milk powder business revenue was 1.89 billion, a year -on -year decrease of 25.6%; other cheese -oriented products revenue of 2.26 billion, an increase of 149.4%year -on -year. 17%.

In the first half of the year, the revenue of milk powder and dairy products (including cheese) revenue was 12.07 billion, a year -on -year increase of 58.3%; cold drink revenue was 7.30 billion yuan, an increase of 31.7%year -on -year.

In the narrative of each of the second curve, Yili chose milk powder and Mengniu chose cheese. This differentiation characteristic has become more prominent this year.

In March 2022, Yili completed a comprehensive offer for Australian Dairy Dairy and became the latter's controlling shareholder. According to public data, in 2020, in the domestic baby milk powder market, Australia and Yili ranked five or six, with market share of 6.3%and 6.2%, respectively, and the industry's first Feihe City share was 14.8%.

The Guolian Securities predicts that after the acquisition of Australia, Yili will share about 15%of the baby's milk powder market, which is almost the same as the industry leader in China.

In addition, before the acquisition of Australian Young, Yili already owns the Ten billion -dollar single -gold gold collar in the baby -match milk powder market, and the advantages of Australia Youyou in the field of goat milk powder can form a good supplement to Yili's milk powder business.

The milk powder business used to be a highlight of Mengniu. In 2019, the revenue of milk powder business reached 7.87 billion, which was 2.18 billion from Yili.

However, after Mengniu's sale of Junlebao's controlling stake in 2019, the milk powder business has fallen sharply. In 2020 and 2021, the revenue of milk powder business was 4.59 billion and 4.95 billion, respectively, and the gap with Yili was 8.3 billion and 11.26 billion, respectively.

Compared with Yili milk powder business, Mengniu's milk powder business is unsatisfactory. Yashili, which spent 10 billion yuan in 2013, was not stable in profitability and suffered losses in 3 years.

Some people in the industry have analyzed that Yashili's sluggish performance may be related to the brand integration. After the acquisition of Yasley, Mengniu took 5 years to integrate Yashili's milk powder Ou Shi, and Donameza, a subsidiary of Mongolia, and France's Demon China to the "Yasley International" milk powder section.

Due to factors such as management turmoil, disadvantaged channel transformation, unclear brand positioning and isolation, Mengniu's milk powder business has not been successful, which has led to the current "large but not strong" situation. In March of this year, Mengniu also issued a privatization Yashili announcement. Obviously, it is difficult to become the second curve of Mengniu in a short time facing the adjustment of the adjustment of the adjustment.

Milk powder stories were unreasonable, and Mengniu also found his new growth cheese business. In 2021, Mengniu became the controlling shareholder of Miao Ke Lan Duo. For the ambitions of the cheese market, Lu Minfang bluntly said, "To be absolute market leaders, that is, Mengniu and Miao Ke Lan's cheese business add up. At least the second place is the second place. Two times, even three times. "Lu Minfang even hoped that the cheese business would soon become Mengniu's tens of billions.

However, the data shows that the size of the domestic cheese market in 2021 was only 13 billion, far less than about 170 billion baby milk powder markets, and even lower than the infant with sheep milk powder.Mengniu wants to make the cheese business exceed 10 billion, and it is difficult for the family to break the ceiling of the industry alone.In the face of the high -growth cheese market, Yili was also about to move.In February of this year, there were rumors that "Yili is planning to acquire a well -known French cheese brand Big Fook."

Although the acquisition of Parksfok has no following, Zhao Lin, general manager of Yili Investor Relations at the midterm performance meeting, said that Yili's goal is to become the first in the cheese market, which is necessary to compete with Mengniu.

In the various market segments of dairy products, there are almost Mengniu and Yili, and the competition between the two sides is almost all -round.But Mengniu's main opponent is not Yili but himself.To achieve the goal of "creating another new Mengniu" in 2025, Mengniu needs to surpass himself.

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