# Inner Mongolia Yili Industrial Group (600887.SHG)

Canonical: https://gigainvestors.com/s/600887.SHG

Analysis as of: 2026-10-16T07:34:28.775Z. Financial observations: FY1996–FY2025.

Listing currency: CNY. Reporting currency: CNY.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: CNY 28.10 per share; close as of 2026-10-15.

Estimated value: low CNY 18.51 per share, central CNY 20.78 per share, high CNY 23.81 per share. Buy at or below the central value CNY 20.78 per share. Valuation as of 2026-10-16T07:34:28.775Z; scenarios are not confidence intervals.

Expected annual return: 8.0% at the stated quote. About 8.0% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; CN 10-year bond 1.7% + 4 points).

## Checklist

### understandable: pass

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.09×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.09×

- FY2017: 0.10×

- FY2018: 0.10×

- FY2019: 0.09×

- FY2020: 0.09×

- FY2021: 0.09×

- FY2022: 0.09×

- FY2023: 0.09×

- FY2024: 0.09×

- FY2025: 0.12×

### moat: pass

- ROIC, median of available years: 23.6%

- ROIC, second-lowest year: 16.3%

- Typical minus recent gross margin: 0.9 pp

- Typical gross margin (annual median): 33.9%

- Recent gross margin (lower of latest and 3-year median): 33.0%

- Years with nonpositive capital: 0

- Capital spending / revenue: 5.6%

- ROIC including acquisitions, ten-year median: 16.1%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 50.2%

- FY2017: 54.1%

- FY2018: 35.6%

- FY2019: 33.9%

- FY2020: 24.0%

- FY2021: 23.3%

- FY2022: 18.2%

- FY2023: 16.3%

- FY2024: 18.0%

- FY2025: 15.2%

### economics: pass

- Owner earnings / net income, 5-yr: 0.99×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: CNY 48B

- Net income, five-year total: CNY 49B

- Return on incremental invested capital: 28.3%

- Working capital / revenue, annual change: 0.6 pp

- Working capital / revenue, change between three-year averages: 4.8 pp

- Working capital / revenue, final three-year average: 1.9%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.99×

- FY2022: 0.99×

- FY2023: 0.81×

- FY2024: 1.01×

- FY2025: 1.13×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 50.2% vs 16.3%

- Per-share earnings: 0.91 to 1.64 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.4%

- Ordinary dilution, 5-year annual growth: 1.5%

- Market cap gain: CNY 72B

- Cumulative retained earnings: CNY 21B

- Diluted shares, 10-year annual growth: 0.4%

- Diluted shares, 5-year annual growth: 1.5%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 7.6%

- Per-share value change: CNY 0.73

- Per-share value, starting three-year median: CNY 0.91

- Per-share value, ending three-year median: CNY 1.64

- Buybacks concentrated in cheaper years (correlation): 0.48

- Average buyback yield: 0.5%

- Buyback history: 9 years

- Debt-funded buybacks: Yes

- Acquisition spending: CNY 9.4B

- Cumulative net income, 10 years: CNY 81B

- ROIC, first three-year median: 50.2%

- ROIC, last three-year median: 16.3%

Chart: Earnings per share; fiscal year observations.

- FY2016: CNY 0.91

- FY2017: CNY 0.99

- FY2018: CNY 1.05

- FY2019: CNY 1.16

- FY2020: CNY 1.21

- FY2021: CNY 1.41

- FY2022: CNY 1.48

- FY2023: CNY 1.64

- FY2024: CNY 1.33

- FY2025: CNY 1.83

### accounting: pass

- Sloan accruals: -1.8%

- Receivables to sales index (DSRI): 0.92×

- Restructuring years, last five: 0

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.24×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.13×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -18.2%

- FY2017: -2.0%

- FY2018: -4.6%

- FY2019: -2.5%

- FY2020: -3.9%

- FY2021: -6.7%

- FY2022: -3.0%

- FY2023: -5.3%

- FY2024: -8.6%

- FY2025: -1.8%

## Holders

## Price story

Down 35% since Oct 2021 · sales +0.1%

Story as of 2026-10-16T10:00:00.726Z; price observation 2026-10-15.

Price needs cash profits to grow 5.5% a year for ten years

### Sales · FY2024–2025

sales +0.1%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: CNY 61B 

- FY2017: CNY 68B 

- FY2018: CNY 80B 

- FY2019: CNY 90B 

- FY2020: CNY 97B 

- FY2021: CNY 111B 

- FY2022: CNY 123B 

- FY2023: CNY 126B 

- FY2024: CNY 116B 

- FY2025: CNY 116B 

### Gross margin · FY2025

gross margin 34.7%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 38.2% 

- FY2017: 37.7% 

- FY2018: 38.3% 

- FY2019: 37.4% 

- FY2020: 30.2% 

- FY2021: 30.7% 

- FY2022: 32.0% 

- FY2023: 31.8% 

- FY2024: 33.0% 

- FY2025: 34.7% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in packaged foods; annual sales are CNY 115.9 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); FY2025: revenue 115931105774.99; grossProfit 40277261974; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 600887.SHG: 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.

### Why customers stay

Margins ranged from 31.8% to 34.7% during 2023–25; it earns 23.6% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); FY2023: grossProfit / revenue = 31.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); FY2024: grossProfit / revenue = 33%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); FY2025: grossProfit / revenue = 34.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); 10-year return on capital observations [[2016,0.5024595478511972],[2017,0.5413604651455073],[2018,0.355700241596116],[2019,0.3389055484554078],[2020,0.23953485689729606],[2021,0.23326285628794372],[2022,0.18195978831316487],[2023,0.16253447713932576],[2024,0.18004727702770174],[2025,0.15248029641963853]]; median 0.2363988565926199. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 32% gross margin through 2022 cost inflation.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); Gross margin observations: [[2021,0.30713353815174066],[2022,0.3203689659397545],[2023,0.31793312729292966]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back CNY 1 billion of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); FY2016: growth capex 62325867.38566446; upkeep 3356681289.9643354; owner earnings 3858497457.0356646. Growth capex / owner earnings = 0.01615288543783233.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); FY2017: growth capex 1824084658.845587; upkeep 1527274796.4744132; owner earnings 5898281129.525587. Growth capex / owner earnings = 0.3092569883986358.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); FY2018: growth capex 2744537305.708929; upkeep 2346063158.911071; owner earnings 5690333451.088929. Growth capex / owner earnings = 0.48231572530845646.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); FY2019: growth capex 2573976559.514; upkeep 6668882183.766001; owner earnings 2148989246.2339993. Growth capex / owner earnings = 1.1977614890464299.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); FY2020: growth capex 1664253780.8821; upkeep 4857943367.2379; owner earnings 4526257419.7621. Growth capex / owner earnings = 0.3676887164251416.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); FY2021: growth capex 3531742083.34; upkeep 3150992000; owner earnings 8621717723.366. Growth capex / owner earnings = 0.4096332304835857.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); FY2022: growth capex 2893789588.62; upkeep 3752318000; owner earnings 9366269537.844. Growth capex / owner earnings = 0.30895860693820204.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); FY2023: growth capex 914738622.6832361; upkeep 6040859081.566764; owner earnings 8475675006.889236. Growth capex / owner earnings = 0.10792516489125811.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); FY2024: growth capex 0; upkeep 3978318000; owner earnings 8563760957.368. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); FY2025: growth capex 0; upkeep 3036644156.68; owner earnings 13050124621.17. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); Dividend observations: [[2016,2759007468.49],[2017,3830148225.88],[2018,4373393862.2],[2019,4254689325],[2020,4913183654],[2021,4987752363],[2022,6144125681],[2023,8355886994],[2024,9032132000],[2025,11959398047.07]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); FY2025: cash repurchases 1015828688.1416668 CNY.

### Are managers owners

Insiders own 14.7% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 600887.SHG SharesStats.PercentInsiders = 14.668000000000001 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 5.5% yearly over ten years; actual growth was 11.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:28.775Z); Ten-year compound average after fade. Initial solved rate 0.08124471522385662. Price 28.1; FX 1; discount 0.1; same compounder ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.6849639487475307 → FY2025 2.0649705354082677. Closing-price date 2026-10-15.

## Monthly share-price history (CNY per share)

- 2016-10: CNY 17.99 per share

- 2016-11: CNY 19.78 per share

- 2016-12: CNY 17.60 per share

- 2017-01: CNY 18.41 per share

- 2017-02: CNY 18.06 per share

- 2017-03: CNY 18.91 per share

- 2017-04: CNY 18.26 per share

- 2017-05: CNY 19.41 per share

- 2017-06: CNY 21.59 per share

- 2017-07: CNY 20.63 per share

- 2017-08: CNY 23.32 per share

- 2017-09: CNY 27.50 per share

- 2017-10: CNY 29.55 per share

- 2017-11: CNY 28.68 per share

- 2017-12: CNY 32.19 per share

- 2018-01: CNY 34.10 per share

- 2018-02: CNY 32.45 per share

- 2018-03: CNY 28.52 per share

- 2018-04: CNY 26.28 per share

- 2018-05: CNY 31.03 per share

- 2018-06: CNY 27.90 per share

- 2018-07: CNY 26.44 per share

- 2018-08: CNY 24.20 per share

- 2018-09: CNY 25.68 per share

- 2018-10: CNY 22.08 per share

- 2018-11: CNY 23.83 per share

- 2018-12: CNY 22.88 per share

- 2019-01: CNY 24.18 per share

- 2019-02: CNY 27.04 per share

- 2019-03: CNY 29.11 per share

- 2019-04: CNY 30.00 per share

- 2019-05: CNY 30.01 per share

- 2019-06: CNY 33.41 per share

- 2019-07: CNY 31.20 per share

- 2019-08: CNY 28.65 per share

- 2019-09: CNY 28.52 per share

- 2019-10: CNY 29.00 per share

- 2019-11: CNY 29.09 per share

- 2019-12: CNY 30.94 per share

- 2020-01: CNY 30.64 per share

- 2020-02: CNY 28.91 per share

- 2020-03: CNY 29.86 per share

- 2020-04: CNY 29.24 per share

- 2020-05: CNY 28.45 per share

- 2020-06: CNY 31.13 per share

- 2020-07: CNY 36.63 per share

- 2020-08: CNY 41.94 per share

- 2020-09: CNY 38.50 per share

- 2020-10: CNY 39.73 per share

- 2020-11: CNY 37.79 per share

- 2020-12: CNY 44.37 per share

- 2021-01: CNY 44.20 per share

- 2021-02: CNY 43.22 per share

- 2021-03: CNY 40.03 per share

- 2021-04: CNY 40.95 per share

- 2021-05: CNY 40.49 per share

- 2021-06: CNY 36.83 per share

- 2021-07: CNY 33.39 per share

- 2021-08: CNY 34.01 per share

- 2021-09: CNY 37.70 per share

- 2021-10: CNY 43.00 per share

- 2021-11: CNY 39.17 per share

- 2021-12: CNY 41.46 per share

- 2022-01: CNY 38.07 per share

- 2022-02: CNY 39.52 per share

- 2022-03: CNY 36.89 per share

- 2022-04: CNY 38.47 per share

- 2022-05: CNY 38.00 per share

- 2022-06: CNY 38.95 per share

- 2022-07: CNY 35.83 per share

- 2022-08: CNY 35.74 per share

- 2022-09: CNY 32.98 per share

- 2022-10: CNY 25.24 per share

- 2022-11: CNY 28.85 per share

- 2022-12: CNY 31.00 per share

- 2023-01: CNY 32.58 per share

- 2023-02: CNY 30.46 per share

- 2023-03: CNY 29.12 per share

- 2023-04: CNY 29.56 per share

- 2023-05: CNY 28.81 per share

- 2023-06: CNY 28.32 per share

- 2023-07: CNY 28.66 per share

- 2023-08: CNY 26.00 per share

- 2023-09: CNY 26.53 per share

- 2023-10: CNY 27.42 per share

- 2023-11: CNY 27.25 per share

- 2023-12: CNY 26.75 per share

- 2024-01: CNY 27.09 per share

- 2024-02: CNY 28.35 per share

- 2024-03: CNY 27.90 per share

- 2024-04: CNY 28.61 per share

- 2024-05: CNY 28.31 per share

- 2024-06: CNY 25.84 per share

- 2024-07: CNY 25.09 per share

- 2024-08: CNY 22.63 per share

- 2024-09: CNY 29.07 per share

- 2024-10: CNY 27.91 per share

- 2024-11: CNY 28.58 per share

- 2024-12: CNY 30.18 per share

- 2025-01: CNY 27.83 per share

- 2025-02: CNY 28.28 per share

- 2025-03: CNY 28.08 per share

- 2025-04: CNY 29.76 per share

- 2025-05: CNY 30.30 per share

- 2025-06: CNY 27.88 per share

- 2025-07: CNY 27.41 per share

- 2025-08: CNY 28.57 per share

- 2025-09: CNY 27.28 per share

- 2025-10: CNY 27.41 per share

- 2025-11: CNY 29.38 per share

- 2025-12: CNY 28.60 per share

- 2026-01: CNY 26.34 per share

- 2026-02: CNY 26.08 per share

- 2026-03: CNY 26.35 per share

- 2026-04: CNY 27.46 per share

- 2026-05: CNY 26.92 per share

- 2026-06: CNY 23.96 per share

- 2026-07: CNY 27.10 per share

- 2026-08: CNY 26.50 per share

- 2026-09: CNY 27.30 per share

- 2026-10: CNY 27.77 per share

## Annual estimated value (CNY per share)

- FY2016: low CNY 9.89 per share, central CNY 13.25 per share, high CNY 15.21 per share

- FY2017: low CNY 13.07 per share, central CNY 17.17 per share, high CNY 19.57 per share

- FY2018: low CNY 13.68 per share, central CNY 18.88 per share, high CNY 21.91 per share

- FY2019: low CNY 15.87 per share, central CNY 21.97 per share, high CNY 25.51 per share

- FY2020: low CNY 15.97 per share, central CNY 22.09 per share, high CNY 25.66 per share

- FY2021: low CNY 22.27 per share, central CNY 29.76 per share, high CNY 34.12 per share

- FY2022: low CNY 23.48 per share, central CNY 31.08 per share, high CNY 35.63 per share

- FY2023: low CNY 24.55 per share, central CNY 32.31 per share, high CNY 36.83 per share

- FY2024: low CNY 26.26 per share, central CNY 35.24 per share, high CNY 40.25 per share

- FY2025: low CNY 18.62 per share, central CNY 20.85 per share, high CNY 23.81 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

## Reported holder observations