Investment Rating - The report maintains a "Buy" rating for Li Ning (2331 HK) with a target price of HK$19.30, indicating a potential upside of 16% from the current price of HK$16.68 [1][3][5]. Core Views - The report forecasts a revenue growth of 2.2% and a decline in net profit of 3.3% for 2024, with expected revenues of RMB 28.2 billion and net profits of RMB 3.08 billion [2][5]. - The company is entering a stable development phase, with projected revenue growth of 3.9% in 2025, reaching RMB 29.33 billion, and a net profit increase of 6.4% to RMB 3.28 billion [2][3]. Financial Summary - Revenue and profit forecasts for Li Ning are as follows: - 2024E Revenue: RMB 28,217 million, a 2.2% increase YoY - 2024E Net Profit: RMB 3,083 million, a 3.3% decrease YoY - 2025E Revenue: RMB 29,326 million, a 3.9% increase YoY - 2025E Net Profit: RMB 3,281 million, a 6.4% increase YoY [4][6][7]. - The report anticipates a slight decline in gross margin in 2H24, with an overall gross margin of 49.4% for 2024, reflecting a 1.0 percentage point increase YoY [1][2]. Valuation - The report maintains the earnings forecast and target price, corresponding to a P/E ratio of 14 times for 2025 [3][5]. - The estimated P/E ratios for the upcoming years are as follows: - 2024E P/E: 13.5 - 2025E P/E: 12.1 - 2026E P/E: 11.4 [4][7].

Investment Rating - The report maintains a "Buy" rating for Li Ning (2331 HK) with a target price of HK$19.30, indicating a potential upside of 16% from the current price of HK$16.68 [1][4][5] Core Views - The report projects a revenue growth of 2.2% and a decline in net profit of 3.3% for 2024, with expected revenues of RMB 28.2 billion and net profits of RMB 3.08 billion [2][5] - The company is entering a stable development phase, with a forecasted revenue increase of 3.9% to RMB 29.33 billion and a net profit increase of 6.4% to RMB 3.28 billion for 2025 [2][3] Summary by Sections Revenue and Profit Forecast - For 2024, revenue is expected to grow by 2.2% to RMB 28.2 billion, while net profit is projected to decline by 3.3% to RMB 3.08 billion [2][5] - For 2025, revenue is forecasted to increase by 3.9% to RMB 29.33 billion, and net profit is expected to rise by 6.4% to RMB 3.28 billion [2][3] Financial Data Summary - The financial data for Li Ning shows a revenue of RMB 27.6 billion for 2023, with projections of RMB 28.2 billion for 2024 and RMB 29.3 billion for 2025 [4][6] - The net profit for 2023 is recorded at RMB 3.19 billion, with expectations of RMB 3.08 billion for 2024 and RMB 3.28 billion for 2025 [4][6] Valuation and Earnings - The report maintains the earnings forecast and target price, corresponding to a P/E ratio of 14 times for 2025 [3][5] - The projected earnings per share (EPS) for 2024 is RMB 1.19, for 2025 is RMB 1.27, and for 2026 is RMB 1.34 [4][5]

Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [1][5]. Core Views - The company has become the official sportswear partner for the Chinese Olympic Committee and the Chinese sports delegation for the 2025-2028 period, which is expected to enhance its brand image and marketing efforts [2][4]. - In the fourth quarter, the company's e-commerce sales growth accelerated, with a reported increase of 26% compared to the previous quarter [3][7]. - The company launched a new midsole technology called "超䨻" in November, introducing six new basketball and running shoe models featuring this innovation [11][12]. - Despite short-term pressures on profitability due to increased marketing expenses related to the Olympic partnership, the company maintains a cautiously optimistic outlook for its product competitiveness and growth potential in the mid to long term [3][16]. Summary by Sections Company Partnership - On January 15, 2025, the company was announced as the official sportswear partner for the Chinese Olympic Committee and the sports delegation for the upcoming Olympic and Asian Games [2][4]. Sales Performance - The fourth quarter saw a significant improvement in sales performance across various platforms, with the company’s e-commerce sales growing by 26% compared to the previous quarter [3][7]. - The overall sales growth for the sports brand sector in the fourth quarter showed a positive trend, with other brands also reporting improved sales figures [7]. Product Innovation - The introduction of the "超䨻" technology is expected to lead the industry in innovation, with new products designed to enhance performance for athletes [11][12]. Financial Forecast - The company has slightly adjusted its profit forecasts for 2024-2026, expecting net profits of 3.06 billion, 3.06 billion, and 3.42 billion yuan respectively, reflecting a year-on-year change of -4.1%, 0.0%, and +11.9% [3][18]. - The target price remains at 17.9-19.2 HKD, corresponding to a PE ratio of 14-15x for 2025 [3][16].

Investment Rating - The investment rating for the company is "Buy" with a target price not specified [7]. Core Insights - The company has become the official sportswear partner for the Chinese Olympic Committee and the Chinese sports delegation for the 2025-2028 period, indicating a strong brand positioning and recognition in the sports industry [1]. - The company focuses on a "single brand, multiple categories, and multi-channel" strategy, emphasizing its commitment to sports and innovation across five core categories: running, basketball, fitness, badminton, and sports lifestyle [2]. - The company aims to be recognized globally as a fashionable and professional sports brand originating from China, promoting sports participation and a healthy lifestyle through various initiatives and events [3]. - The opening of the first youth sports store in Wuhan marks the company's strategic expansion into the youth sports market, showcasing its commitment to supporting youth sports development [4]. - The company maintains its profit forecast, expecting revenues of 28.4 billion RMB, 29.8 billion RMB, and 31.8 billion RMB for the years 2024 to 2026, with net profits of 3.1 billion RMB, 3.5 billion RMB, and 4.0 billion RMB respectively [5]. Summary by Sections Company Overview - The company has secured a partnership with the Chinese Olympic Committee for the upcoming Olympic cycles, enhancing its brand visibility and credibility in the sports sector [1]. Business Strategy - The company adopts a comprehensive strategy that includes a focus on innovation and consumer experience, ensuring sustainable growth while expanding its market presence [2]. Brand Engagement - The company is actively engaging consumers through campaigns that promote sports participation and highlight its technological advancements in sports equipment [3]. Market Expansion - The launch of a dedicated youth sports store reflects the company's strategic focus on the youth segment, indicating a proactive approach to market expansion [4]. Financial Projections - The company has set ambitious financial targets for the next three years, indicating confidence in its growth trajectory and market positioning [5].

Investment Rating - The report maintains a "Buy" rating for the company, with a current price of HKD 15.48 and a target value of HKD 19.11 [5]. Core Views - The company has partnered with the Chinese Olympic Committee, which is expected to enhance its brand value. It will provide official sportswear for major events from 2025 to 2028, including the Winter Olympics and Asian Games [10]. - The company is anticipated to achieve stable growth in 2025, with improvements in discount and gross margin. Despite increased marketing expenses, the net profit margin is expected to remain above 10% [10]. - The company is focusing on expanding its store network, particularly through direct sales, and is expected to launch more cost-effective products in response to consumer trends [10]. - The forecast for net profit from 2024 to 2026 is CNY 30.7 billion, CNY 30.4 billion, and CNY 33.7 billion, respectively. The report assigns a PE ratio of 15 for 2025, leading to a target value of HKD 19.11 per share [10]. Financial Summary - Revenue is projected to grow from CNY 25.803 billion in 2022 to CNY 30.306 billion in 2026, with a growth rate of 14.3% in 2022, slowing to 6.0% by 2026 [4][14]. - EBITDA is expected to increase from CNY 5.162 billion in 2022 to CNY 6.906 billion in 2026, with a notable dip in 2023 [4][14]. - The net profit attributable to shareholders is forecasted to decline from CNY 4.064 billion in 2022 to CNY 3.374 billion in 2026, reflecting a challenging market environment [4][14]. - The company's EPS is projected to decrease from CNY 1.54 in 2022 to CNY 1.31 in 2026, indicating a potential decline in profitability [4][14]. Key Financial Ratios - The report highlights a decrease in ROE from 16.7% in 2022 to 10.1% in 2025, suggesting a decline in return on equity [13]. - The net profit margin is expected to decrease from 15.7% in 2022 to 11.1% in 2026, indicating potential profitability challenges [13]. - The company's debt-to-asset ratio is projected to improve from 27.7% in 2022 to 23.8% in 2026, reflecting a strengthening balance sheet [13].

Core Viewpoint - Li Ning is likely to replace Anta as the new official partner of the Chinese Olympic Committee for the 2025-2028 cycle, with a significant financial offer of approximately 800 million RMB [1][2]. Group 1: Financial Aspects - Li Ning's bid of around 800 million RMB is substantially higher than the prices offered in the previous two cycles, indicating a strong desire to secure this partnership for increased brand exposure [2]. - Anta has been the official partner of the Chinese Olympic Committee for 16 years, from 2009 to 2024, which has allowed it to build a significant brand presence [2]. Group 2: Historical Context - In 2009, Li Ning had a revenue of 8.387 billion RMB, leading Anta, which had a revenue of 5.87 billion RMB [3]. - The turning point for Anta came in 2009 when it decided to sponsor the Chinese Olympic Committee, leading to rapid revenue growth [4]. Group 3: Brand Recognition and Marketing - The partnership with the Chinese Olympic Committee is crucial for brand recognition, as athletes wear the partner's apparel during medal ceremonies, enhancing the brand's visibility [5]. - Li Ning previously held a long-term partnership with the Chinese Olympic Committee from 1992 to 2004, which established it as a leading domestic sports brand [5]. Group 4: Competitive Landscape - Anta has effectively utilized modern marketing channels, including television and social media, to enhance its brand presence, contrasting with Li Ning's reliance on traditional advertising methods during its earlier partnership [6][7]. - Despite potential loss of the partnership, Anta is focusing on global expansion and multi-brand strategies, indicating a diversified approach to growth [8][9]. Group 5: Current Financial Performance - In 2023, Anta reported a revenue growth of 16.2% to 62.356 billion RMB, while Li Ning's revenue grew by 7% to 27.598 billion RMB, highlighting a significant disparity in company size [10].

Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for its stock performance [4][63]. Core Views - The company focuses on a "single brand, multiple categories, and multiple channels" strategy, leveraging the "Guochao" trend for rapid development. It emphasizes innovation in product design and technology, maintaining a strong brand image in the sportswear sector [2][4][10]. - The company has seen significant growth in its e-commerce channels, with online revenue accounting for 27.9% of total revenue in the first half of 2024, up 5.4 percentage points from 2019. The direct sales channel has also recovered, reaching 24.4% of total revenue [5][56]. - The company is expected to continue its growth trajectory, with projected net profits of 31.26 billion RMB, 34.45 billion RMB, and 38.76 billion RMB for 2024, 2025, and 2026, respectively [6][60]. Summary by Sections 1. Company Operations - The company maintains a single brand strategy, focusing on five core categories: running, basketball, badminton, fitness, and sports lifestyle. It optimizes its offline channel layout and develops various store types to meet customer needs [2][27]. - The company has enhanced its brand image by integrating sports resources and sponsoring major events, which has increased brand exposure and product professionalism [35][37]. 2. E-commerce and Financial Management - E-commerce has become a new growth driver, with significant revenue increases from online channels. The company has also improved its management efficiency, leading to a better net profit margin [48][50]. - The company’s revenue and gross profit have shown a compound annual growth rate (CAGR) of 18.77% and 18.35%, respectively, from FY2019 to FY2023 [48][49]. 3. Profit Forecast and Valuation - The company is projected to achieve revenues of 281.61 billion RMB, 298.70 billion RMB, and 319.07 billion RMB for 2024, 2025, and 2026, with corresponding net profits of 31.26 billion RMB, 34.45 billion RMB, and 38.76 billion RMB [60][62]. - The report compares the company with peers in the sportswear industry, noting that its price-to-earnings (P/E) ratio for 2024 is 12.0X, which is lower than the industry average of 14.1X, supporting the "Buy" rating [6][63].

Investment Rating - The investment rating for the company is "Buy" and is maintained [3][4]. Core Views - The company's Q3 2024 revenue data was in line with expectations, with a year-on-year decline in direct sales and franchise sales, while e-commerce sales showed growth [3][4]. - Inventory levels remain manageable despite a slight increase in discounting, with expectations for a recovery in inventory turnover ratio by year-end [4]. - The establishment of a joint venture with Sequoia Capital to expand overseas business reflects confidence in international growth opportunities [4]. Summary by Sections Revenue Performance - Q3 all-channel revenue showed a year-on-year decline, with direct sales and franchise sales down, while e-commerce sales increased [3][4]. - The company anticipates a revenue growth acceleration in Q4 due to a low base effect, maintaining a stable growth outlook for the year [4]. Inventory and Discounting - The company expects a slight increase in discounting, with an inventory turnover ratio of approximately 5 months, which is expected to improve to a healthier level of 4-5 months by year-end [4]. - Despite the anticipated pressure on discounts in Q4, the overall gross margin is expected to show slight improvement due to better performance in H1 [4]. Joint Venture and International Expansion - The joint venture with Sequoia Capital involves an investment of HKD 58 million, with the company holding a 29% stake, indicating a strategic move to enhance overseas market presence [4]. - The company retains the right to reclaim its stake in the joint venture, showcasing confidence in the potential of international markets [4]. Profit Forecast and Valuation - The company is projected to achieve net profits of CNY 3.187 billion, CNY 3.031 billion, CNY 3.411 billion, and CNY 3.739 billion for 2024-2026, reflecting a year-on-year growth of -5%, +13%, and +10% respectively [4][6]. - Corresponding P/E ratios are expected to be 12, 11, and 10 for the same period [6].

Investment Rating - The investment rating for the company is "Outperform the Market" [1] Core Views - The report highlights a slowdown in overall channel revenue growth in Q3 2024, with total revenue and offline revenue both declining compared to Q2 2024. Direct sales, distribution, and e-commerce revenues showed mixed results, with e-commerce maintaining positive growth due to a shift in consumer traffic from offline to online channels [4][5] - The company has established a joint venture with HongShan Capital to enhance its overseas operations, focusing on Southeast Asia and Belt and Road countries. The total capital for the joint venture is HKD 200 million [5] - The company is integrating advanced technology with Eastern aesthetics in its outdoor product line, launching new collections that cater to both trendy and hardcore outdoor activities [5] Financial Summary - The company’s revenue for 2023 is projected at HKD 27,598.49 million, with a year-on-year growth of 6.96%. The net profit for 2023 is estimated at HKD 3,186.91 million, reflecting a decline of 21.58% compared to the previous year [7][9] - The projected net profit for 2024 and 2025 is HKD 31.7 billion and HKD 33.7 billion respectively, with a price-to-earnings (PE) valuation range of 13-15X for 2024, translating to a target price range of HKD 17.33 to HKD 19.99 per share [6][9] - The company maintains a gross margin of approximately 48.38% for 2023, with slight improvements expected in subsequent years [9][10] Market Performance - The company has a total of 6,281 stores as of Q3 2024, with a net increase of 41 stores year-to-date. The report indicates a focus on adjusting higher-tier market stores while continuing to explore lower-tier markets [4][5]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HK$19.58, reflecting a potential upside of 23.3% from the current price of HK$15.88 [3][6][18]. Core Insights - The company has reiterated its FY24E targets, but the report expresses caution due to weak demand and inventory buildup. However, gradual improvement is anticipated for FY25E [1][6]. - Retail sales in Q3 2024 showed a slight improvement compared to expectations, with e-commerce growth outpacing offline channels. The report highlights the importance of the upcoming Double 11 shopping festival for sales performance [1][6]. - The management's focus on cost-saving measures and efficiency improvements is noted, but concerns remain regarding operating profit margins due to increased retail discounts and fixed operational costs [1][6]. Summary by Sections Revenue Overview - The company reported revenues of RMB 28,162 million for FY24E, with a projected growth of 2% [2][7]. - Revenue growth is expected to improve to 7.2% in FY25E and 8.4% in FY26E [11][14]. Profitability Metrics - The net profit for FY24E is projected at RMB 3,103 million, with a net profit margin of 11% [7][12]. - The report anticipates a gradual increase in net profit to RMB 3,466 million in FY25E and RMB 3,895 million in FY26E [7][12]. Valuation Metrics - The company is currently trading at a P/E ratio of 11x for FY25E, which is considered attractive compared to the target P/E of 13x [6][16]. - The expected dividend yield for FY25E is 4% [6][16]. Inventory and Sales Dynamics - The inventory turnover ratio is approximately 5 months, indicating a slight increase from the previous quarter [1][6]. - Retail discounts have widened in offline channels, while e-commerce discounts have shown improvement [1][6]. Market Position and Strategy - The company has formed a joint venture to expand its brand presence in the Belt and Road regions, with significant investments planned [6][11]. - The management remains committed to achieving sales growth targets despite current market challenges [1][6].