Using the two-stage valuation method, the net profit in the first five years will increase by 1 billion per year, and then the annual growth rate will be 3%, and the discount rate will be 8%.
Capital expenditure, according to the statistics of the increase in fixed assets in the past ten years, about every additional profit of 100 million needs to invest about 360 million in capital expenditure, which is equivalent to a return of 1.25 billion (1/0.08=12.5) when discounted with future cash flow (1/0.08=12.5), it seems not bad .
The total discounted net profit is 194.6 billion. Yili’s monetary capital plus financial assets is about 42 billion yuan, borrowing is 32 billion yuan, and the rest are operating assets in my opinion, so the effective cash is estimated to be 10 billion yuan. The sum of the two is about 205 billion, and the current market value is 210 billion, which is not cheap.
The increase in net profit and assets in the last statistics shows that a part of Yili’s profit is used to invest in capital expenditures, which is probably why the market for companies that need to continuously invest in capital expenditures has low PE, and it can also explain why Yili is still Need to refinance need to borrow.
I think Yili is a second-rate business model. The growth is mainly due to the increase in sales. If the demographic dividend disappears, the growth needs to rely on the launch of new products.
Finally, we refer to the gross estimates of Buffett and Dao Dao. See’s Candy was at 12PE at the time (See’s had no capital expenditure, and the growth mainly came from price increases, which is actually better than Yili’s business model). Dao Dao said that it was probably the same value, 144 ×12=1728, Yili is expensive now. However, if I use this method, I can’t seem to find a cheap company in my circle of competence. ![[滴汗]](http://js.xueqiu.com/ugc/images/face/emoji_13_coldsweat.png "[drip sweat]"){kind=small}
$Yili (SH600887)$ $Mengniu Dairy (02319)$
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