Since 2015, poor demand has slowed sales growth, the deep fall in raw milk prices triggered a continuous price war, and the overall growth rate of the industry has dropped from double digits to single digits. Ping an Securities Analysis of 20 Dairy Enterprises with long Historical dataBefore 2015, the difference in the growth rate between leading enterprises and small and medium-sized dairy enterprises was not obvious. From 2016 to 2017, there was a significant differentiation in the industry, the leading growth rate continued to maintain rapid growth, and the speed of small and medium-sized dairy enterprises decreased significantly.Specifically, the bibcock grabs the room temperature.High-end opportunity, steady scale expansionDairy dairy enterprises lack marketing ability, and their downstream business is declining day by day; cross-regional dairy enterprises develop slowly, and outport expansion often encounters resistance; small dairy enterprises show two levels of differentiation, and dark horses break out by virtue of individual products; large dairy beverage products are gradually aging, beverage giants are under pressure.

Low-temperature milk conforms to the trend of upgrading consumption, but the big inflection point of growth has not yet appeared. Ping an Securities observes the growth rate of normal-temperature milk in 14 dairy enterprises and low-temperature milk in 10 dairy enterprises. Since 2011, the growth rate of low-temperature milk has been faster than that of normal-temperature milk, but the gap has not yet opened. By category, the rapid rise of room temperature yogurt to hedge against the decline of basic products, the overall growth of UHT milk is still steady, milk beverage suffers from consumers'"unhealthy, poor nutrition" query, there are signs of recession, low-temperature yogurt is suppressed by external factors, the growth center has fallen slightly, the Babbitt milk base is small and large, the leader is accelerating the layout, and the growth rate of 2016-2017 leads the entire liquid milk subdivision category.

Ping an Securities found that the share of liquid milk is highly concentrated, a few leaders dominate the market, and four leading companies, Yili, Mengniu, Guangming and Wa, occupy nearly 70% of the liquid milk market. In the past four years, the concentration of the industry has not increased, but the pattern is being reshuffled. Yili overtook Mengniu at the corner and increased its market share from 22.7% in 2013 to 28.6% in 2017. The normal temperature leader is speeding up the harvest share by virtue of exclusive high-end dividends and economies of scale, and the difference between the two is becoming more and more obvious. Yili's normal temperature market share surpassed Mengniu in 2014 and continues to open the gap, and the pattern has a trend of continuous evolution from a double power to a single oligarch. The competition pattern of low-temperature milk is still relatively scattered, regional dairy enterprises master local high-quality milk sources continue to occupy the market, low-temperature yoghurt products with longer shelf life and richer concepts, the pattern evolves faster than the whole low temperature.

Ping an Securities believes that the demand for room temperature milk is still growing fast, and the leader is accelerating the harvest share by virtue of exclusive high-end dividends and economies of scale, the strong rise of Yili is unstoppable, and the gradual optimization of the competitive pattern is expected to continue to improve profitability.Although low-temperature milk has benefited from the trend of consumption upgrading, it has not yet ushered in a big inflection point, and under the restrictions of cold chain and milk source, the industry pattern evolves slowly and the trend is difficult to determine. Based on the present, looking forward to the future, from the perspective of industrial evolutionThe room temperature milk faucet is still the most deterministic opportunity.Recommend normal temperature milk leading position consolidation, new business gradually strength, comprehensive fast consumer platform embryonic appearance of Yili shares (600887.SH).