Inner Mongolia Yili (600887.SS)

Consumer · Shanghai · China

CN¥26.26+6.45% today

Fundamentals

Market capCN¥157.37B

P/E ratio13.0

Dividend yield10.45%

Revenue growth (YoY)+5.5%

Profit margin10.3%

Return on equity19.1%

52-week rangeCN¥23.76 to CN¥29.78

Valuation and ratings

DCF fair valueCN¥46.03

Upside to fair value+75.3%

Moat score57/100

Overall rating67/100, Buy

Inner Mongolia Yili trades at CN¥26.26, which is 75% below the CN¥46.03 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.

Our moat model scores it 57 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.

It changes hands at 13.0 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.

About Inner Mongolia Yili

Inner Mongolia Yili Industrial Group Co., Ltd. engages in the production and sale of various dairy products and health drinks in China. The company offers liquid milk, dairy beverages, milk powder, yogurt, frozen drinks, cheese, milk fat, and packaged drinking water. It also exports its products. The company was founded in 1956 and is based in Hohhot, China.

Industry: Packaged FoodsEmployees: 62,666HQ: China

600887.SS passes 6 of our 30 screens today

Each screen prints the exact criteria it used, and the circumstances in which it is wrong.

Undervalued on cash flow

Companies trading at least 25% below what our discounted cash flow model says the future cash is worth today.

Dividend powerhouses

Yields above 3%, filtered for the one thing yield screens never check: whether the company can actually afford it.

Low volatility defensives

Companies that move less than the market and pay you to wait. The holdings that let you sleep, and let you hold everything else.

Consumer staples

The companies that sell what people buy regardless of the economy. Dull, and dull is the entire point.

China and Hong Kong

Enormous growth, and a structure in which you may not legally own the company you think you bought. Both are true at once.

Dividend aristocrats

Companies with long, unbroken records of raising their dividend. The record is the point: it is evidence, not a promise.

Common questions

Is Inner Mongolia Yili (600887.SS) undervalued?

Against our discounted cash flow estimate of CN¥46.03, 600887.SS at CN¥26.26 is 75% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.

What is 600887.SS's P/E ratio?

600887.SS trades at 13.0 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.

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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.