A Research On Financial Performance And Strategy Of INNER MONGOLIA YILI INDUSTRIAL GROUP CO.,LTD.and BRIGHT DAIRY & FOOD CO.,LTD

With the development of China's economy and the improvement of people's living standards,People now care more about a healthy diet than any other time.After experiencing a booming ten years from 1998 to 2007,the growth of Chinese dairy industry slowed down.In 2008,inspectors found melamine-an industrial chemical which hurts babies kidneys-in 12 per cent of milk powder products from 22 Chinese dairies.The incident made the "slow-down" even worse.A decade later,China dairy pattern has changed,and in 2016,the implementation of universal two-child policy brought favorable circumstances for the dairy industry.In estimated,this policy will bring extra 17 million babies being born within the next five years.And it also brings great opportunities for China dairy.This paper is a comparative study,focusing on China's dairy,selecting INNER MONGOLIA YILI INDUSTRIAL GROUP CO.,LTD.and BRIGHT DAIIRY&FOOD CO.,LTD as the object to analyze.Studying the two companies,2007-2016 financial reports,researching the two companies' business model,core competence,financial statements,development strategies,to give some suggestions to the two companies.The article includes eight chapters.Firstly,give some introduction for backgrounds of China's dairy.Secondly,check over the two companies'financial reporting quality.Thirdly,make financial ratio analysis including profitability analysis,assets turnover,liquidity analysis,borrowing capacity analysis,cash flow generation,earning and market performance analysis.etc.Fourthly,make decomposing analysis,by decomposing the structure of ROE,"risks",EVA and "g" to get in-depth knowledge of the two companies.Next,on the basement of the financial strategic matrix analysis to distinguish what type this two companies should belong to and give some financial policies.Finally,provide some business strategy and corporate strategy recommendations to both of the two companies.In researching the financial performance of the two companies,we find out that YILI dose better than BRIGHT DAIRY almost in every way.The two companies take different corporate strategies.YILI who takes a cost-leading strategy,does better in the capital operation.It has a stronger profitability and operates superior OPM strategy.The proposals for YILI is to improve its asset turnover ratio,and to take stable and sustained dividend policy to achieve self-sustainable growth.BRIGHT DAIRY who takes the differentiation strategy,excels in product innovation.But it's earning capacity falls far behind YILI's.BRIGHT DAIRY should take action to strengthen its OPM strategy,improve its product quality and after-sale service,and reduce dividends to stave off profitability slump.