Yili (SHSE:600887) is the leading dairy group in China engaging in sectors including liquid milk, ice cream, infant milk powder and yoghurt. Since 2010, its management has been committed to channel optimization and product upgrade, resulting in a continuous operational improvement. Its market share would also grow further as Yili would be the major beneficiary of the policy-driven industry consolidation among domestic peers. At present, Yili is trading at a huge valuation discount to its closest peer, Mengniu, which is listed in Hong Kong’s stock market.
From Value Partners (Trades, Portfolio)’ Classic Fund Second Quarter 2014 Commentary.
