Investment Rating - The investment rating for the company is "Outperform the Market" [5][50]. Core Views - The company achieved a revenue growth of 3.3% in the first half of 2025, with operating profit remaining stable, but net profit declined by 11% [1][6]. - The gross margin slightly decreased by 0.4 percentage points to 50.0%, primarily due to channel structure adjustments and increased discounts [1][6]. - The management maintains a revenue growth guidance for 2025 at a flat rate, with a net profit margin expected to be in the high single digits [2][49]. - The company is focusing on improving operational efficiency and expects marketing investments to drive future sales growth [3][50]. Financial Performance Summary - In the first half of 2025, the company reported a revenue of 14.82 billion, with a year-on-year increase of 3.3% and a net profit of 1.74 billion, down 11% year-on-year [1][6]. - The operating profit margin slightly decreased by 0.2 percentage points to 16.5%, while the net profit margin fell by 1.9 percentage points to 11.7% [1][7]. - The company generated a net operating cash inflow of 2.41 billion, increasing its net cash to 19.19 billion, indicating a strong cash position [8]. Revenue Growth by Category - Revenue growth by category showed that footwear increased by 4.9%, apparel decreased by 3.4%, and accessories surged by 23.7% [2][24]. - The running category saw a revenue increase of 15%, while basketball and sports fashion categories experienced declines of 20% and 7%, respectively [2][24]. - The company launched a personal logo for signed player Yang Hansheng in the basketball category and established a laboratory with aerospace technology innovation platforms for the training category [2][24]. Inventory and Channel Health - The company reported a healthy inventory level with a turnover days of 61, down by 1 day year-on-year, and accounts receivable turnover days also decreased by 1 day to 14 [2][31]. - The total number of stores reached 7,534, with a net decrease of 51 stores compared to the end of the previous year [2][44]. - E-commerce performance was strong, with online sales growing at a high single-digit rate, while direct sales from stores decreased due to structural optimization [2][46]. Profit Forecast and Valuation - The profit forecast for the company estimates net profits of 2.51 billion, 2.83 billion, and 3.04 billion for 2025, 2026, and 2027, respectively, reflecting a year-on-year decline of 16.6% in 2025, followed by growth in subsequent years [3][51]. - The reasonable valuation has been adjusted to 21.1-22.3 HKD, corresponding to a PE ratio of 18-19x for 2026 [3][50].

Core Viewpoint - The report from Guosen Securities indicates that while Li Ning faces short-term marketing cost pressures, operational efficiency is improving, and there is an expectation for mid-term sales growth to accelerate, leading to a recovery in profitability [1] Group 1: Financial Performance - In the challenging operating environment of the first half of 2025, the company achieved stable performance, particularly in profit metrics after excluding non-operating impacts [1] - The forecast for the company's net profit attributable to shareholders for 2025-2027 is projected at 2.51 billion, 2.83 billion, and 3.04 billion yuan, reflecting year-on-year changes of -16.6%, +12.5%, and +7.7% respectively [1] Group 2: Marketing and Growth Potential - The collaboration with the Chinese Olympic Committee and other resource investments in the second half of the year will incur additional short-term costs, but these are expected to gradually convert into sales drivers [1] - The company maintains a healthy operational foundation and has potential for brand growth acceleration through enhanced marketing efforts [1] Group 3: Valuation and Rating - The reasonable valuation has been adjusted to a range of 21.1-22.3 HKD, corresponding to a 2026 price-to-earnings ratio of 18-19 times [1] - The rating remains "outperform the market" [1]

Core Insights - Li Ning reported a revenue of 14.817 billion yuan for the first half of 2025, representing a year-on-year growth of 3.3% [1] - The footwear segment continues to grow, with badminton products achieving a structural breakthrough, supported by a strategic partnership with the Chinese Olympic Committee (COC) [1] Footwear and Badminton Segment - Footwear revenue reached 8.231 billion yuan, up 4.9% year-on-year, accounting for 55.6% of total revenue, marking a 0.9 percentage point increase from the previous year [2] - The "超䨻" technology has been fully applied to core categories like running and basketball shoes, leading to significant product innovations [2] - The "越影5PRO" running shoe features a midsole bounce ratio of 10.8, balancing cushioning and rebound performance [2] - Total sales of three core running shoe IPs exceeded 5.26 million pairs, with the "飞电" family achieving an energy return rate of 89% after upgrading to the "超䨻" midsole [2] - The basketball shoe "ULTRALIGHT2025" has sold over 100,000 pairs since its launch, aided by marketing strategies [2] Apparel and Equipment - Apparel revenue was 5.193 billion yuan, accounting for 35% of total revenue, down 3.4% year-on-year [3] - Equipment and accessories revenue surged by 23.7% to 1.393 billion yuan, making it the fastest-growing segment [3] - The badminton category has transitioned from "apparel-driven" to "professional equipment-led," with a focus on technology and research [3] Strategic Partnerships and Marketing - The partnership with COC is seen as a long-term strategic move rather than a short-term marketing tactic, aimed at building brand professionalism [4] - Li Ning has made significant adjustments to its retail presence, enhancing consumer recognition of its partnership with COC [4] - The company is preparing for major upcoming events like the 2028 Olympics and 2026 Winter Olympics, aligning product development and marketing strategies accordingly [5] Channel and Sales Performance - As of June 30, the total number of Li Ning sales points was 7,534, with a slight net decrease but improved operational efficiency [6] - Online sales reached 4.3 billion yuan, growing 7.4% year-on-year, and accounting for 29% of total revenue [6] - The integration of online and offline channels has led to increased brand visibility and sales performance [6]

Investment Rating - The report maintains an "Outperform" rating for the company [1] Core Views - The company reported a 3.3% year-on-year revenue growth to RMB 14.82 billion in the first half of 2025, with a net profit decline of 11% to RMB 1.74 billion, which is better than the company's guidance and slightly exceeds expectations [6] - The company plans to distribute an interim dividend of RMB 0.34 per share, with a payout ratio of 50% [6] - Inventory levels are healthy, but discount pressures have increased due to weak industry demand and intensified competition [6] - The company continues to focus on professional sports categories, with running and training categories performing well, while basketball is still recovering [6] - E-commerce sales outperformed offline sales, with e-commerce revenue growing 7% to RMB 4.3 billion, accounting for 29% of total revenue [6] Financial Data and Profit Forecast - Revenue forecast for 2023 is RMB 27.6 billion, with a growth rate of 7%, and a projected revenue of RMB 31.2 billion by 2027 [5] - The net profit forecast for 2023 is RMB 3.19 billion, with a decline of 22%, and expected to reach RMB 2.78 billion by 2027 [5] - The gross margin is projected to be around 48.8% in 2025, with a slight decrease from previous years [5] - The company maintains its full-year guidance, aiming for flat revenue and a high single-digit net profit margin [6]

Core Viewpoint - The company's 1H25 performance met expectations, with a revenue increase of 3% to 14.8 billion RMB and a net profit decrease of 11% to 1.74 billion RMB, alongside a mid-term dividend declaration of 0.3359 RMB per share, reflecting a payout ratio of approximately 50% [1][2]. Revenue and Product Performance - Revenue from running and training products continued to grow healthily, with running and training categories maintaining a 15% year-on-year growth, accounting for 34% and 16% of total sales respectively [1]. - Revenue from wholesale (excluding Li Ning YOUNG and international business) increased by 5% to 6.5 billion RMB, while direct sales revenue (excluding Li Ning YOUNG) decreased by 4% to 3.2 billion RMB, with a net closure of 19 stores [1][2]. - Online revenue grew by 7% to 4.3 billion RMB [1]. Profitability and Financial Metrics - The gross profit margin decreased by 0.4 percentage points to 50.0%, primarily due to changes in channel structure and increased promotions in direct sales [2]. - The operating profit margin fell by 0.3 percentage points to 16.5%, influenced by a decline in financial income and an increase in impairment losses [2]. - The net profit margin decreased by 1.9 percentage points to 11.7% [2]. Inventory and Receivables Management - Inventory remained at a relatively healthy state, with a low single-digit year-on-year growth and a healthy inventory turnover ratio maintained for four months [2]. - The proportion of new products within six months in the channel inventory was 82%, and accounts receivable turnover days remained at a favorable level of 14 days [2]. Future Outlook - The company expects revenue fluctuations in July and August but remains committed to long-term investments in marketing resources for the Olympics and enhancing multi-category product R&D [2]. - The company aims to improve multi-channel operational efficiency and maintains a positive long-term development outlook [2]. Earnings Forecast and Valuation - The earnings per share (EPS) forecast for 2025/26 remains unchanged at 0.92/1.07 RMB, with the current stock price corresponding to 18/15 times the 2025/26 price-to-earnings ratio [3]. - The target price has been raised by 9% to 22.68 HKD, reflecting a 25% upside potential from the current stock price [3].

Core Viewpoint - The company reported stable performance in H1 2025 despite external environmental disturbances, with a slight increase in revenue and gross profit but a decline in net profit [1] Financial Performance - In H1 2025, the company achieved revenue of 14.817 billion yuan, a year-on-year increase of 3.3% - Gross profit reached 7.415 billion yuan, up 2.5% year-on-year - Net profit attributable to shareholders was 1.737 billion yuan, down 11.0% year-on-year - The gross margin for H1 2025 was 50.0%, a decrease of 0.4 percentage points year-on-year, attributed to a decline in direct sales channel revenue and increased discounting - The net profit margin was 11.7%, down 1.9 percentage points year-on-year, due to increased advertising and marketing expenses as the company focused on core resource investment [1] Dividend Policy - The company declared an interim dividend of 0.3359 yuan per share, with a payout ratio of 50%, indicating a strong willingness to distribute dividends [1] Business Segments - E-commerce contributed the largest revenue growth in H1 2025, with a 7.4% year-on-year increase, accounting for 29.0% of total revenue, up 1.1 percentage points from H1 2024 - Revenue from authorized dealers increased by 4.4% year-on-year, making up 46.5% of total revenue, up 0.5 percentage points from H1 2024 - Revenue from footwear products reached 8.231 billion yuan, a 4.9% increase year-on-year, with sales of key running shoe IPs exceeding 5.26 million pairs - Revenue from equipment and accessories grew significantly by 23.7% year-on-year, reaching 1.393 billion yuan, with a revenue share of 9.4% [2] Market Development - The company signed player Yang Hansheng, who was selected in the first round of the NBA draft, which is expected to enhance the company's brand and product sales in the basketball category - Retail sales for running and cross-training categories showed strong performance, both increasing by 15% year-on-year, while basketball retail sales declined by 20% [3] Growth Outlook - The company is positioned as a leading domestic sports apparel brand, focusing on a "single brand, multiple categories, and multiple channels" development strategy - Continued investment in R&D is expected to enhance core technologies in footwear and apparel, maintaining a balance between professionalism and fashion in product design - Profit forecasts for net profit attributable to shareholders are projected at 2.645 billion yuan, 2.845 billion yuan, and 3.104 billion yuan for 2025, 2026, and 2027 respectively [3]

Group 1 - The company reported a 3.3% year-on-year increase in revenue for the first half of 2025, reaching 14.82 billion RMB, but experienced a decline in gross margin and net margin due to deeper retail discounts and channel adjustments [1] - The management maintained the annual guidance for 2025, expecting flat revenue and a high single-digit net margin, while acknowledging challenges in the operating environment and increased marketing expenses related to the Olympics [1] - The company is currently in an adjustment period, with uncertainty regarding the recovery pace in the second half of the year, and will continue to monitor sales trends and operational efficiency improvements [1] Group 2 - The offline channel was negatively impacted by continued weak customer traffic, with revenue from direct sales, wholesale, and e-commerce showing year-on-year changes of -3.4%, +4.4%, and +7.4% respectively, indicating online performance was better than offline [2] - The company reduced its store count by 51 to 7,534 by the end of the first half, with a decrease of 19 in direct stores, while maintaining a healthy inventory level with a stock-to-sales ratio of 4 months [2] - The company focused on professional sports categories, with footwear sales increasing by 4.9% year-on-year, while apparel sales declined by 3.4%, and running category sales grew by 15%, supported by strong performance from key running shoe IPs [2]

Investment Rating - The investment rating for the company is "Buy" [4] Core Views - The company reported a revenue growth of 3.3% in H1 2025, with operating profit increasing by 1.5%, while net profit attributable to shareholders decreased by 11%, indicating overall performance exceeded expectations [1] - The company is focusing on long-term performance improvement, with a strong emphasis on optimizing channel structures and enhancing product competitiveness [8] Summary by Relevant Sections Revenue and Profitability - In H1 2025, the company's revenue reached 14.817 billion yuan, with a gross margin of 50%, down by 0.4 percentage points year-on-year. The decline in gross margin is attributed to deeper discounts in direct sales and an increased proportion of franchise channels [1] - Operating profit margin decreased by 0.2 percentage points to 16.5%, while operating profit grew by 1.5% to 2.438 billion yuan. Net profit attributable to shareholders fell by 11% to 1.74 billion yuan, with a net profit margin decline of 1.9 percentage points to 11.7% [1] Channel and Product Strategy - The company continues to optimize its channel structure, with offline direct channels experiencing net store closures to enhance profitability. E-commerce sales are growing rapidly and performing well [2] - The adult apparel segment saw a 2% increase in revenue, with running and training categories growing by 15% each. The professional sports category now accounts for over 60% of total revenue [3] Financial Health - As of H1 2025, the company had a net cash position of 19.191 billion yuan, reflecting a 6% increase from the beginning of the year. The company maintains a healthy inventory level, with a 7% reduction in inventory to 2.4 billion yuan [7] - The company expects revenue to remain flat in 2025, with a projected decline in net profit attributable to shareholders of 21.5% [7] Future Outlook - The company is set to enhance its brand influence through partnerships with the Olympic Committee and will focus on marketing activities related to the upcoming Winter Olympics [8] - Long-term growth is anticipated as the company continues to expand its product matrix and improve operational efficiency [8]

Core Insights - The core focus for Li Ning is to enhance brand and product competitiveness to provide better sports experiences for consumers [1] - Li Ning reported a revenue increase of 3.3% to 14.82 billion yuan for the first half of the year, with gross profit rising 2.5% to 7.41 billion yuan, while gross margin decreased by 0.4% to 50% [1][3] - The company is preparing for greater challenges in the consumer market, but remains confident in the sustained interest and demand for sports [1] Financial Performance - Revenue from footwear grew by 4.9% to 8.231 billion yuan, accounting for 55.6% of total revenue, while apparel revenue decreased by 3.4% to 5.193 billion yuan, making up 35% [3] - Equipment and accessories saw significant growth, with revenue increasing by 23.7% to 1.393 billion yuan, now representing 9.4% of total revenue [3] - Overall sales costs for the first half were 7.402 billion yuan, with a gross margin of 50.0%, reflecting a slight decline due to changes in channel structure and increased promotional discounts [3] Market Strategy - The company is implementing a "close inefficient, expand quality" strategy, focusing on closing underperforming stores while accelerating the expansion of high-quality outlets [4] - As of June 30, 2025, the total number of sales points was 7,534, a net decrease of 51 from December 31, 2024 [4] Product Diversification - Li Ning's multi-sport brand includes running, basketball, cross-training, badminton, table tennis, and sports leisure, with professional product revenue exceeding 60% [5] - The badminton category has seen significant growth, with revenue contribution reaching 7%, driven by high sales of rackets and strings [6] - The company plans to expand its presence in racket sports, including tennis and pickleball, to enhance brand strength and business composition [6]

Core Viewpoint - Li Ning Company reported a 3.3% year-on-year revenue growth to 14.817 billion RMB for the first half of 2025, but net profit decreased by 11% to 1.737 billion RMB, resulting in a net profit margin of 11.7% [2] Group 1: Financial Performance - Revenue from footwear reached 8.231 billion RMB, up 4.9%, accounting for 55.6% of total revenue; apparel revenue was 5.193 billion RMB, down 3.4%, making up 35%; equipment and accessories revenue grew by 23.7% to 1.393 billion RMB [4] - The overall revenue for Li Ning in 2024 was projected to grow by 3.9% to 28.676 billion RMB, with a net profit of 3.013 billion RMB and a net profit margin of 10.5% [2] Group 2: Market Position and Competition - Major competitors in the domestic sportswear market, such as Xtep and 361 Degrees, reported higher growth rates, with Xtep's revenue increasing by 7.1% to 6.838 billion RMB and 361 Degrees' revenue up by 11% to 5.705 billion RMB [8] - Anta Group's core brand showed mid-single-digit growth, while FILA recorded high single-digit growth, indicating stronger performance compared to Li Ning [9] Group 3: Strategic Initiatives - Li Ning's CEO acknowledged challenges due to a decrease in offline foot traffic and is focusing on optimizing offline channels, closing inefficient stores, and expanding quality store coverage [9] - The company plans to enhance its presence in emerging categories such as women's sports, outdoor gear, and youth sports products [9] - Li Ning has become the official apparel partner for the Chinese Olympic Committee for 2025-2028, with plans to launch winter Olympic-themed marketing campaigns [9][10] Group 4: Shareholder Activity - Non-Fan Lingyue announced a further acquisition of Li Ning shares for approximately 455 million HKD, representing about 1.11% of the total issued shares, aimed at enhancing Li Ning's competitiveness in the sportswear market [12]