Analysis of Yili Group (600887.SH) - A Trending Stock: Market Attention Sparked by the Chairman's First-Ever Share Sale

Yili Group’s appearance on the trending stock list is not driven by a single event, but rather the result of overlapping multiple news catalysts.

is the strongest catalyst. On January 7, 2026, the company issued an announcement stating its plan to sell no more than 62 million shares within the next 3 months. Based on the closing price of 28.42 yuan per share on that day, the estimated market value of the shares to be sold is approximately 1.76 billion yuan [1][2]. This landmark event caused a huge stir in the market, and the stock price plummeted 4.08% the following day, with the market capitalization evaporating by approximately 7 billion yuan in a single day [1].

In addition to the share sale event, other important catalysts include:

with an interest rate of only 1.49%, which demonstrates the capital market’s high recognition of the company’s credit quality [3]; to further consolidate the layout of the upstream milk supply chain [4]; , whose homophonic meme marketing went viral on social media [5]; , with the Gold Crown Sainamu public welfare project winning the ‘2025 Social Responsibility Award’ [6].

From the perspective of secondary market performance, Yili Group closed at 27.09 yuan on January 19, 2026, with a daily increase of +0.44%, a trading volume of 458,400 lots, and a trading turnover of 1.24 billion yuan [7]. Capital flow showed a differentiated trend: main capital recorded a net inflow of 8.7346 million yuan (accounting for 0.70%), hot money recorded a net outflow of 9.6486 million yuan (accounting for 0.78%), and retail investors recorded a slight net inflow of 0.9140 million yuan (accounting for 0.07%) [8]. This differentiation reflects the market’s divergent interpretations of the share sale event - bears are concerned about insufficient confidence from the management, while bulls interpret it as ‘passive deleveraging’ rather than active cash-out.

To understand the current market volatility, it needs to be examined against the backdrop of fundamentals. For the full year of 2024, Yili Group achieved operating revenue of 115.793 billion yuan, a year-on-year decrease of 8.24%; net profit was 8.453 billion yuan, a year-on-year decrease of 18.94% - this marks the first-ever year-on-year declines in both revenue and profit since the company’s listing [1]. In the first three quarters of 2025, operating revenue reached 90.564 billion yuan, a slight year-on-year increase of 1.71%, indicating that the revenue side has stabilized to a certain extent, but net profit was 10.426 billion yuan, a year-on-year decrease of 4.07%, and the dilemma of ‘growing revenue without growing profit’ still persists [1].

The business structure shows significant differentiation: the traditional liquid milk business continues to face pressure, with revenue of 54.939 billion yuan in the first three quarters of 2025, a year-on-year decrease of 4.49% [1]; while

, with a year-on-year increase of 13.74% to 24.261 billion yuan; [1]. Liquid milk accounts for about 60% of the company’s revenue, and its continuous decline is the main drag on performance, but the rapid growth of the new business segments provides hope for future transformation.

Pan Gang joined Yili in 1992 and has served as chairman since 2005, leading the company for 20 years with no prior share sale record [1]. This first-ever share sale was carried out when the stock price was at a relatively low level (a correction of approximately 41% from the historical high), and the scale was precisely controlled within the 1% disclosure threshold, which has sparked market doubts about its ‘long-termism’ commitment [2]. A noteworthy detail is that the company’s announcement stated that the proceeds from the share sale will

, which has somewhat alleviated concerns about ‘high-level cash-out’ [1][2].

From the perspective of corporate governance, this share sale reveals potential issues with the equity incentive mechanism - when incentive shares are used for pledge financing, it may form a leverage effect similar to a ‘credit springboard’ [2]. Investors need to closely monitor the subsequent implementation of the share sale and the management’s statements in the annual report or performance briefing.

The performance pressure faced by Yili is not an isolated phenomenon. In the first half of 2025, among more than 30 major dairy enterprises in China, 19 recorded year-on-year revenue declines, 12 saw net profit declines, and 9 incurred losses, indicating an overall downturn in the industry [1]. The underlying reasons for this phenomenon include: the ambient liquid milk market has entered a stage of stock competition, and changes in population structure (declining birth rate, aging population) have weakened the demand growth potential of traditional dairy products.

In terms of competition pattern, Junlebao officially submitted its IPO application to the Hong Kong Stock Exchange on January 19, 2025, with a market share of approximately 4.3%, which may impact the existing dual-oligopoly pattern of ‘Yili - Mengniu’ [9]. Meanwhile, the rise of new consumer formats such as baking, coffee, and new tea beverages has opened up new B-end market opportunities for dairy enterprises, which may be an important breakthrough for Yili’s future growth [10].

Currently, Yili Group’s dynamic price-to-earnings ratio (PE) is only 12.33x, and its price-to-book ratio (PB) is 3.22x, which is in the historical low range [7]. The low valuation not only reflects the market’s concerns about the company’s growth prospects but also objectively provides a relatively high margin of safety.

(with an interest rate of 1.49%) proves the capital market’s high recognition of Yili’s credit quality [3], which has to some extent offset the trust shock caused by the share sale event.

Risk Type	Specific Content	Risk Level
Management Trust Crisis	Pan Gang’s first-ever share sale has sparked market doubts about the ‘long-termism’ commitment [2]	High
Sustained Performance Pressure	The first-ever dual decline in revenue and profit since listing in 2024, with the dilemma of growing revenue without growing profit yet to be resolved [1]	High
Weakness in Core Liquid Milk Business	Ambient milk revenue was approximately 75 billion yuan, a year-on-year decrease of 12.32% [1]	Medium-High
Intensified Industry Competition	Junlebao submitted its IPO application, with Mengniu and Bright Dairy pressing closely [9]	Medium
Share Sale Implementation Risk	The share sale window opens on January 29, which may bring short-term selling pressure	Medium-High

Positive Factor	Specific Content	Potential Impact
Leading Position in the Industry	Significant scale advantage and leading market share [11]	Provides valuation support
High Growth of New Businesses	Double-digit growth in milk powder and cold drink businesses, expansion of B-end market [1]	Hope for transformation
Strong Financing Capability	The successful issuance of the 10-billion-yuan low-interest bond proves market trust [3]	Financial stability
Recognition of ESG Practices	The annual social responsibility award enhances brand image [6]	Long-term value
Valuation Margin of Safety	12x PE ratio is at a historical low	Limited downside risk

The core driver for Yili Group to become a trending stock is

, a landmark event, combined with multiple news catalysts including , , , and . Fundamentally, the company is experiencing growing pains during the transformation from high-speed growth to high-quality development: the traditional liquid milk business continues to face pressure, but new businesses such as milk powder and cold drinks show growth vitality, and its ESG practices have been recognized. The valuation is at a historical low (PE ratio of 12.33x), which provides a margin of safety, but the trust crisis sparked by the management’s share sale and performance pressure remain the main risks.

: Volatility may increase during the share sale window (from January 29 to April 14), and it is recommended that investors with low risk appetite adopt a wait-and-see approach, waiting for the completion of the share sale and clarification of performance. : Pay attention to the 2024 annual report and the performance guidance for the first quarter of 2025, observe whether the liquid milk business can stabilize, and track the sustainability of new business growth. : Whether Yili can successfully achieve the strategic transformation from ‘volume growth to quality improvement’, and whether the second growth curves such as milk powder and cold drinks can support growth.

As the leading dairy enterprise in China, Yili’s strategic adjustments and new business development deserve continuous tracking by investors, but vigilance should be maintained against short-term fluctuations.