Investment Rating - The report maintains a "Buy" rating for Li Ning with a target price of HKD 22.8, based on a 2024 PE of 18 times [1][4]. Core Insights - Li Ning's Q3 retail revenue saw a year-on-year decline in the mid-single digits across all platforms, with offline channels experiencing a high single-digit drop, while e-commerce recorded a mid-single-digit growth. The company anticipates a recovery in Q4 due to a low base effect [2][3]. - The introduction of a joint venture with Sequoia Capital aims to expand Li Ning's overseas market presence, with Li Ning investing HKD 58 million for a 29% stake, maintaining control over the joint venture [2][3]. Summary by Sections Financial Performance - For 2024, the expected EPS is projected at HKD 1.17, with forecasts of HKD 1.29 and HKD 1.43 for 2025 and 2026 respectively. Revenue is expected to grow from HKD 28.276 billion in 2024 to HKD 32.6 billion by 2026 [2][3][8]. - The gross margin is expected to improve slightly from 48.4% in 2023 to 49.1% by 2026, while the net profit margin is projected to stabilize around 11.3% by 2026 [3][11]. Product Performance - The lifestyle and running categories have shown strong performance, with the Soft series achieving cumulative sales of approximately 2 million pairs by Q3. The running category saw high double-digit revenue growth in Q3 [2][3]. - The company has launched new outdoor products to cater to diverse consumer needs, including the "万龙甲 BREATH" series jackets and "行" family outdoor shoes [2]. Inventory and Discounts - Inventory turnover for offline channels was around 5 months in Q3, with 80% of new products having a shelf life of less than 6 months. Discounts in offline channels have deepened slightly, while e-commerce discounts have improved [2][3][11]. - The company expects discount pressures in Q4 due to traditional e-commerce shopping festivals, but overall discounts for the year are anticipated to improve compared to the previous year [2].

Investment Rating - The report maintains an "Outperform" rating for the company, indicating a positive outlook compared to the market [2]. Core Insights - The company's Q3 2024 sales performance met expectations, with a slight decline in overall retail sales, while e-commerce channels showed growth [2]. - The company has established a joint venture to expand its overseas market presence, with a total investment of HKD 58 million, which is expected to have minimal short-term financial impact but aims for long-term growth [2]. - The company continues to focus on its core sports segment, with strong brand recognition and product development capabilities, projecting net profits of RMB 31 billion, 33 billion, and 36 billion for 2024-2026 [2][3]. Summary by Sections Market Data - Closing price: HKD 16.06 - Market capitalization: HKD 415.07 billion - 52-week high/low: HKD 31.65/12.56 [1]. Sales Performance - Q3 2024 retail sales (excluding Li Ning YOUNG) saw a mid-single-digit decline year-on-year, with offline channels experiencing a higher decline compared to e-commerce, which grew in the mid-single digits [2]. - The company reported a healthy inventory level with a stock-to-sales ratio of approximately 5 months, slightly above the previous year [2]. Financial Projections - Revenue projections for FY2024E to FY2026E are RMB 27.75 billion, RMB 29.20 billion, and RMB 30.98 billion, respectively, with corresponding net profits of RMB 30.96 billion, RMB 33.34 billion, and RMB 35.56 billion [3][6]. - The gross margin is expected to remain stable around 49.5% to 49.6% over the next few years [3]. Operational Adjustments - The company is optimizing its offline store network, with a net increase of 42 stores in the first three quarters of 2024, while planning to open over 100 stores in lower-tier cities [2]. - The company is also focusing on enhancing its product offerings, particularly in the running shoe category, which has shown strong growth [2].

运动服饰巨头李宁（2331.HK，股价15.28港元，市值394.91亿港元）在10月22日宣布与红杉中国方面成 立合资公司，旨在加快海外市场的发展步伐。 根据公告，合资公司的股本总额将为2亿港元，其中LN Co（李宁的间接全资附属公司）占股29%、 Founder Co（为李宁本人全资拥有）占股26%、红杉方面占股45%。 公告称，LN Co和创始人李宁共计在合资公司中持股将达到55%，能有效保障李宁品牌的声誉和对合资 公司足够的影响力。同时，引入红杉中国将有助合资公司加快境外的发展步伐及效率。 由Founder Co提名的合资公司董事（最初为创始人李宁）将担任合资公司董事会主席，当合资公司董事 会决议案票数相同时，其将投出决定票。 图片来源：李宁港交所公告 国际化进度较缓，李宁欲携手红杉"提速"海外市场 根据公告，合资公司的股本总额将为2亿港元，其中LN Co（李宁的间接全资附属公司）占股29%、 Founder Co占股26%、HongShan Venture及HongShan Motivation分别占股31.36%及13.64%。 据悉，Founder Co由李宁公司创始人李宁全资拥有，HongSh ...

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The Q3 revenue met expectations, with dynamic discount management ensuring healthy inventory levels. The company maintains its profit forecast for 2024 at 3.1 billion, 3.41 billion, and 3.7 billion HKD, corresponding to PE ratios of 12.3, 11.2, and 10.3 times [2][3] - The company is actively expanding new products and channel development to address multi-tier market and consumer demand changes, with a focus on running and outdoor categories [2] - A joint venture with Red Shirt China has been established to accelerate overseas market development, with the company holding a 29% stake [2] Financial Summary and Valuation Metrics - Revenue (in million HKD): 25,803 in 2022, 27,598 in 2023, projected 28,047 in 2024, 30,290 in 2025, and 32,417 in 2026, with year-over-year growth rates of 14.3%, 7.0%, 1.6%, 8.0%, and 7.0% respectively [3] - Net profit (in million HKD): 4,064 in 2022, 3,187 in 2023, projected 3,096 in 2024, 3,410 in 2025, and 3,701 in 2026, with year-over-year growth rates of 1.3%, -21.6%, -2.8%, 10.1%, and 8.5% respectively [3] - Gross margin: 48.4% for 2022 and 2023, projected to increase to 49.2% from 2024 onwards [3] - Net margin: 15.7% in 2022, 11.5% in 2023, projected to be 11.0% in 2024, 11.3% in 2025, and 11.4% in 2026 [3] - ROE: 16.7% in 2022, 13.1% in 2023, projected to decline to 10.9% in 2024, then stabilize at 11.1% from 2025 onwards [3] - EPS (diluted): 1.6 in 2022, 1.2 in 2023, projected to remain at 1.2 in 2024, then increase to 1.3 in 2025 and 1.4 in 2026 [3] - P/E ratios: 9.4 in 2022, 11.9 in 2023, projected to be 12.3 in 2024, 11.2 in 2025, and 10.3 in 2026 [3] - P/B ratios: 1.6 in 2022 and 2023, projected to decline to 1.3 in 2024, 1.2 in 2025, and 1.1 in 2026 [3]

Investment Rating - The report maintains a "Buy" rating for Li Ning Company [2][4]. Core Views - Li Ning's Q3 sales remain volatile, with an expectation of flat performance for the entire year due to fluctuations in the consumer environment [2]. - The company is focusing on optimizing its offline channels while expanding its presence in lower-tier cities, resulting in a net decrease of 14 direct stores and a net increase of 55 wholesale stores since the beginning of 2024 [2]. - E-commerce sales have shown a mid-single-digit percentage increase, outperforming offline sales, attributed to improved consumer conditions and enhanced operational efficiency [2]. - The establishment of a joint venture to expand overseas operations, particularly in Southeast Asia, is expected to leverage multiple strengths for international business exploration [2]. - The overall revenue growth for 2024 is projected at 1%, with a stable performance anticipated despite a decrease in non-operating income [2]. Financial Summary - Revenue for 2024 is estimated at 27,894 million, with a growth rate of 1.1% year-on-year [3][9]. - Net profit for 2024 is projected at 3,190 million, reflecting a slight increase of 0.1% year-on-year [3][9]. - The report outlines a gradual improvement in gross margin and cost control measures, contributing to stable annual performance [2]. - Key financial ratios include a projected P/E ratio of 12 times for 2024, with EPS expected to remain at 1.23 [3][9]. Store Expansion and Performance - As of Q3 2024, Li Ning has 1,459 young stores, with a net increase of 21 stores since Q2 2024, indicating a continued focus on children's sportswear [2]. - The company is actively building its product matrix and optimizing channel structures in the children's apparel segment [2].

Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [1][2][4] Core Views - The company experienced a mid-single-digit decline in sales for the third quarter, but there is an expectation for improvement in the fourth quarter [3][4] - The company has established a joint venture with Sequoia Capital to expand its international business, holding a 29% stake in the new entity [4][6] - Management has guided for low single-digit revenue growth and a low double-digit net profit margin for 2024 [7][8] Summary by Sections Retail Performance - For the third quarter ending September 30, 2024, the company's retail sales (excluding Li Ning YOUNG) recorded a mid-single-digit decline year-on-year, with offline channels experiencing a high single-digit decline and e-commerce showing mid-single-digit growth [4][5] - The total number of sales points in China reached 6,281, with a net increase of 42 points from the previous quarter [4] Joint Venture - The joint venture with Sequoia Capital aims to develop and operate the Li Ning brand overseas, with an investment of HKD 58 million from the company [6] Management Guidance - The management maintains a revenue growth forecast of low single digits for 2024 and a net profit margin in the low double digits [7][8] Financial Projections - The company expects net profits for 2024, 2025, and 2026 to be CNY 31.5 billion, CNY 35.5 billion, and CNY 38.6 billion, respectively, with year-on-year changes of -1.2%, +12.9%, and +8.5% [7][8] - The target price is set between HKD 17.9 and HKD 19.2, corresponding to a PE ratio of 13.5-14.5x for 2024 [7][8]

财联社10月23日讯（编辑 胡家荣） 李宁(02331.HK)在昨日公布三季度运营情况后，股价出现下跌。截 至发稿，跌3.86%，报15.46港元。 根据最新公布的三季度运营数据，截至9月30日，李宁在整个平台的零售流水按年录得中单位数下降， 线下渠道尤其是批发渠道面临较大压力，而电子商务虚拟店铺业务则录得中单位数增长。在实体店铺方 面，在中国的销售点数量为6281个，本年迄今净增加41个。 同时李宁采取了一系列战略调整。公司在10月22日宣布与红杉中国等合作伙伴成立合资公司，旨在加快 海外市场的发展步伐。合资公司的股本总额为2亿港元，其中李宁通过其间接全资附属公司LN Co注资 5800万港元，占股本总额的29%。 机构如何评价这一业绩及公司战略变化？ 摩根士丹利在其报告中指出，李宁第三季度的营运表现符合预期，零售销售按年下降中单位数，与预期 一致。摩根士丹利对李宁的目标价为21元，评级为"增持"，并预计合资企业对李宁2025至2026年的盈利 影响有限。 华西证券则维持全年收入增长低单位数的预期，并预计李宁将继续在童装和1990系列保持净开店，同时 看好电商业务在第四季度的环比改善。 东吴证券认为，尽管第 ...

Investment Rating - The report maintains a "Buy" rating for Li Ning (02331.HK) [1] Core Views - The company reported a decline in overall retail sales for Q3 2024, with a year-on-year decrease in sales volume, particularly in offline channels, while e-commerce showed moderate growth [2] - Li Ning established a joint venture to develop international business, with a total investment of HKD 200 million, aiming to leverage international expertise while focusing on domestic market growth [2] - The company anticipates a sales improvement in Q4 2024, driven by a recovery in the e-commerce environment and positive trends during the National Day holiday [2][3] Summary by Sections Financial Performance - Total revenue for 2022 was CNY 25,803 million, with a year-on-year growth of 14.31%. For 2023, revenue is projected at CNY 27,598 million, reflecting a growth of 6.96% [1] - The net profit attributable to shareholders for 2022 was CNY 4,064 million, with a decline of 21.58% expected in 2023, bringing it to CNY 3,187 million [1] - The report forecasts net profits of CNY 3,129 million, CNY 3,556 million, and CNY 3,911 million for 2024, 2025, and 2026 respectively, with corresponding P/E ratios of 12, 11, and 10 [3] Sales and Inventory - Q3 2024 saw a mid-single-digit year-on-year decline in overall sales, with offline channels experiencing a higher decline compared to e-commerce, which grew in the mid-single digits [2] - Inventory pressure increased, with a stock-to-sales ratio of around 5 months, and the company aims to reduce this to 4-5 months by year-end [2] - Discounts in offline sales deepened slightly year-on-year, while e-commerce discounts improved marginally [2] Guidance and Outlook - The company maintains its guidance for low single-digit year-on-year revenue growth and a low double-digit net profit margin for the full year [2] - The report highlights a positive trend in sales since October, suggesting potential for improved performance in Q4 [3]

Revenue and Profitability - Revenue for the six months ended June 30, 2024, increased by 2.3% to RMB 14,345.288 million compared to RMB 14,018.947 million in the same period in 2023[11] - Revenue for the first six months of 2024 reached RMB 14,345,288,000, a 2.3% increase compared to the same period in 2023[13] - Gross profit rose by 5.8% to RMB 7,235.602 million, with the gross margin improving to 50.4% from 48.8% in 2023[11] - Gross margin improved by 1.6 percentage points to 50.4%, driven by better discount management and higher direct-to-consumer channel revenue[18] - Operating profit decreased by 3.0% to RMB 2,401.895 million, with the operating profit margin declining to 16.7% from 17.7% in 2023[11] - Net profit attributable to equity holders dropped by 8.0% to RMB 1,952.032 million, with basic earnings per share decreasing by 6.0% to RMB 75.80[11] - Net profit attributable to equity holders was RMB 1,952,032,000, down from RMB 2,121,231,000 in 2023, with a profit margin of 13.6% compared to 15.1% in 2023[26] - EBITDA increased slightly by 0.5% to RMB 3,443.608 million[11] - EBITDA for the six months ended June 30, 2024, was RMB 3,443,608,000, up 0.5% year-over-year[22] - The company's revenue grew by 2.3% in the first half of 2024, with profitability in line with expectations[40] - Revenue from footwear products increased to 7,844,159 thousand RMB in 2024 from 7,514,672 thousand RMB in 2023[96] - Revenue from apparel products decreased to 5,375,222 thousand RMB in 2024 from 5,639,911 thousand RMB in 2023[96] - Revenue from equipment and accessories increased to 1,125,907 thousand RMB in 2024 from 864,364 thousand RMB in 2023[96] - E-commerce channel sales grew to 4,004,262 thousand RMB in 2024 from 3,595,353 thousand RMB in 2023[97] - Sales to franchise dealers in the Chinese market decreased to 6,590,009 thousand RMB in 2024 from 6,724,040 thousand RMB in 2023[97] - Direct sales in the Chinese market increased to 3,502,705 thousand RMB in 2024 from 3,409,502 thousand RMB in 2023[97] - The company's total revenue for the first six months of 2024 was 14,345,288 thousand RMB, compared to 14,018,947 thousand RMB in the same period of 2023[96] - Revenue for the first half of 2024 reached 14,345,288 thousand RMB, a slight increase from 14,018,947 thousand RMB in the same period of 2023[65] - Net profit attributable to equity holders of the company was 1,952,032 thousand RMB for the first half of 2024, down from 2,121,283 thousand RMB in 2023[65] - Basic earnings per share decreased to 75.80 RMB in the first half of 2024 from 80.63 RMB in the same period of 2023[65] - The company's profit for the period was 1,952,032 thousand RMB, with 7,011 thousand RMB attributed to services provided under the share-based compensation plan[125] - The company's profit attributable to equity holders for 2024 was 1,952,032 thousand RMB, down from 2,121,231 thousand RMB in 2023[144] - Basic earnings per share for 2024 were 75.80 RMB cents, down from 80.63 RMB cents in 2023[142] - The company's diluted earnings per share for 2024 was 75.49 cents RMB, a decrease from 80.34 cents RMB in 2023[144] Expenses and Costs - Sales and distribution expenses increased by 9.6% to RMB 4,326,883,000, accounting for 30.2% of total revenue[19] - Administrative expenses rose to RMB 680,297,000, representing 4.7% of total revenue, up 0.5 percentage points year-over-year[20] - Tax expenses for the period were RMB 661,098,000, with an effective tax rate of 25.3%, up from 24.3% in 2023[25] - Net financing income decreased to RMB 100,375,000 from RMB 223,704,000 in 2023, primarily due to increased foreign exchange losses and reduced interest income[24] - Inventory provisions as of June 30, 2024, totaled RMB 143,914,000, up from RMB 134,727,000 at the end of 2023[27] - Expected credit loss provisions increased to RMB 55,977,000 as of June 30, 2024, from RMB 45,738,000 at the end of 2023[28] - Advertising and marketing expenses increased to 1,248,791 thousand RMB in 2024 from 1,042,091 thousand RMB in 2023[136] - Government grants received in 2024 amounted to 141,552 thousand RMB, up from 110,094 thousand RMB in 2023[137] - Net financing income for 2024 was 100,375 thousand RMB, a significant decrease from 223,704 thousand RMB in 2023[138] - Corporate income tax provision for 2024 was 789,200 thousand RMB, compared to 751,019 thousand RMB in 2023[139] - Inventory costs recognized as expenses and included in cost of sales were 6,911,525 thousand RMB in 2024, down from 7,002,447 thousand RMB in 2023[114] - Depreciation expenses for property, plant, and equipment amounted to 470,250 thousand RMB for the six months ending June 30, 2024[99] - Impairment losses of 18,389 thousand RMB were recognized for property, plant, and equipment due to underperforming stores[99] - Depreciation of right-of-use assets amounted to 319,210 thousand RMB for the six months ending June 30, 2024[104] - Impairment losses of 50,820 thousand RMB were recognized for right-of-use assets[104] - Total lease-related cash outflows reached 1,085,403 thousand RMB for the six months ending June 30, 2024[104] - Depreciation expenses for investment properties were 41,039 thousand RMB in 2024, compared to 30,359 thousand RMB in 2023[107] - Land use rights amortization expenses were 1,895 thousand RMB in 2024, slightly down from 1,899 thousand RMB in 2023[108] - Intangible assets totaled 255,955 thousand RMB as of June 30, 2024, with amortization expenses of 29,250 thousand RMB[110] - The company's trade payables decreased to 1,706,036 thousand RMB as of June 30, 2024, from 1,789,796 thousand RMB on December 31, 2023[128] - The company's refund liabilities increased to 1,010,883 thousand RMB as of June 30, 2024, from 808,980 thousand RMB on December 31, 2023[130] - The company's accrued sales and marketing expenses rose to 1,071,772 thousand RMB as of June 30, 2024, from 919,414 thousand RMB on December 31, 2023[129] - The company's sales rebates increased significantly to 562,028 thousand RMB as of June 30, 2024, from 299,146 thousand RMB on December 31, 2023[129] - The company's property, plant, and equipment payables increased to 535,878 thousand RMB as of June 30, 2024, from 457,563 thousand RMB on December 31, 2023[129] - The company's payable royalties increased to 104,895 thousand RMB as of June 30, 2024, from 47,065 thousand RMB on January 1, 2024[132] - The company's payable royalties due within 1 year increased to 75,145 thousand RMB as of June 30, 2024, from 38,997 thousand RMB on December 31, 2023[134] - Deferred revenue as of June 30, 2024, was 60,159 thousand RMB, a decrease from 76,009 thousand RMB in the same period in 2023[135] Cash Flow and Financial Position - Net cash generated from operating activities was RMB 2,730,305,000, up from RMB 1,942,431,000 in 2023[29] - Cash and cash equivalents as of June 30, 2024, were RMB 6,146,726,000, a net increase of RMB 702,843,000 from the end of 2023[29] - Net proceeds from the share placement and subscription amounted to RMB 8,571,787,000, with RMB 1,466,282,000 remaining unused as of June 30, 2024[31][32] - 40% of the net proceeds were used for future business investments, including international expansion, with a total of 1,421,939 thousand RMB fully utilized by June 30, 2024[33][34] - 30% of the net proceeds were allocated for infrastructure restructuring and supply chain enhancement, with 312,513 thousand RMB used and 1,184,710 thousand RMB remaining, expected to be utilized by December 31, 2026[33] - 20% of the net proceeds were invested in brand and IT system construction, with 223,836 thousand RMB used and 183,964 thousand RMB remaining, expected to be utilized by December 31, 2024[33] - 10% of the net proceeds were allocated for general working capital, with 170,994 thousand RMB used and 97,608 thousand RMB remaining, expected to be utilized by December 31, 2024[33] - The company's credit facility as of June 30, 2024, was 8,743,000,000 RMB, with no outstanding borrowings[34] - Total assets increased to 35,536,153 thousand RMB as of June 30, 2024, compared to 34,207,803 thousand RMB at the end of 2023[62] - Total equity increased to 25,905,795 thousand RMB as of June 30, 2024, compared to 24,006,641 thousand RMB at the end of 2023[63] - Investment properties surged to 3,296,840 thousand RMB as of June 30, 2024, from 1,560,455 thousand RMB at the end of 2023[62] - Cash and cash equivalents rose to 6,146,726 thousand RMB as of June 30, 2024, up from 5,443,883 thousand RMB at the end of 2023[62] - Total liabilities decreased to 9,630,358 thousand RMB as of June 30, 2024, from 9,801,162 thousand RMB at the end of 2023[63] - Total equity increased from RMB 24,406,641 thousand to RMB 25,905,795 thousand from January 1, 2024, to June 30, 2024[69] - Comprehensive income for the period amounted to RMB 1,964,525 thousand[69] - Dividends paid during the period totaled RMB 473,560 thousand[69] - Cash generated from operating activities was RMB 3,668,367 thousand, with net cash from operating activities at RMB 2,730,305 thousand[73] - Net cash used in investing activities was RMB 1,084,184 thousand, including RMB 1,812,988 thousand for the acquisition of a subsidiary[73] - Net cash used in financing activities was RMB 928,615 thousand, with RMB 473,560 thousand paid as dividends[73] - Cash and cash equivalents increased by RMB 717,506 thousand, reaching RMB 6,146,726 thousand at the end of the period[73] - The company acquired Vansittart Investment Limited for a total consideration of HKD 2.221 billion (approximately RMB 2.013 billion), with a prepayment of HKD 221 million (approximately RMB 200 million) made in December 2023 and the remaining HKD 2 billion (approximately RMB 1.813 billion) paid in January 2024[76] - The acquisition included investment properties valued at RMB 1.699 billion and property, plant, and equipment valued at RMB 322 million[76] - The company's financial liabilities due within one year amounted to RMB 4,958,287 thousand, with RMB 503,713 thousand due in 1 to 2 years, RMB 647,984 thousand due in 2 to 5 years, and RMB 915,281 thousand due after 5 years as of June 30, 2024[85] - The company's financial liabilities due within one year amounted to RMB 4,565,280 thousand, with RMB 616,535 thousand due in 1 to 2 years, RMB 812,524 thousand due in 2 to 5 years, and RMB 950,653 thousand due after 5 years as of December 31, 2023[86] - The fair value of the company's private equity fund investments classified as Level 3 was RMB 430,874 thousand as of June 30, 2024[88] - The fair value of the company's private equity fund investments classified as Level 3 was RMB 428,189 thousand as of December 31, 2023[88] - The company's financial assets in private equity funds were valued at 430,874 thousand RMB as of June 30, 2024[92] - The expected return rate for private equity fund investments and financial product investments ranged from 1.80% to 2.90% for the first six months of 2024[89] - The company's capital commitment related to investment in limited partnerships was $16.5 million as of June 30, 2024[153] - The company's capital commitment for property, plant, and equipment as of June 30, 2024 was 752,892 thousand RMB, down from 840,617 thousand RMB in 2023[154] - The company's market capitalization as of June 30, 2024, was approximately HKD 43,677,720,551[189] - The total number of issued shares as of June 30, 2024, was 2,584,480,506[189] Inventory and Receivables - The average inventory turnover period increased to 62 days from 57 days in 2023[11] - The average trade receivables turnover period increased to 15 days from 14 days in 2023[11] - The average trade payables turnover period increased to 46 days from 41 days in 2023[11] - Accounts receivable increased to 1,259,010 thousand RMB as of June 30, 2024, compared to 1,243,747 thousand RMB as of December 31, 2023[116] - Expected credit loss provision for trade receivables increased to 48,394 thousand RMB as of June 30, 2024, up from 38,215 thousand RMB as of December 31, 2023[116] - Trade receivables aged 0-30 days increased to 627,894 thousand RMB as of June 30, 2024, compared to 581,522 thousand RMB as of December 31, 2023[119] - Trade receivables aged 31-60 days increased to 400,027 thousand RMB as of June 30, 2024, up from 384,449 thousand RMB as of December 31, 2023[119] - Trade receivables aged 61-90 days decreased to 41,085 thousand RMB as of June 30, 2024, down from 99,505 thousand RMB as of December 31, 2023[119] - Other receivables increased to 430,427 thousand RMB as of June 30, 2024, compared to 412,570 thousand RMB as of December 31, 2023[121] - Inventory costs recognized in cost of sales were 6,911,525 thousand RMB in 2024, slightly down from 7,002,447 thousand RMB in 2023[136] Investments and Acquisitions - The company completed the acquisition of Vansittart Investment Limited for a total adjusted consideration of 2.213 billion HKD (approximately 2.013 billion RMB), which includes a property in Hong Kong[36] - The company plans to invest approximately 3.3 billion RMB in a high-end smart manufacturing and flexible supply chain base in Guangxi, with partial investments already made[38][39] - The company acquired a subsidiary for 2.221 billion HKD (approximately 2.013 billion RMB), with 1.699 billion RMB allocated to investment properties[106] - Investments accounted for using the equity method increased to 1,716,037 thousand RMB as of June 30, 2024, up from 1,606,601 thousand RMB at the end of 2023[111] - The company transferred 143,512 thousand RMB of completed construction projects to investment properties[99] - Newly added right-of-use assets totaled 188,378 thousand RMB for the six months ending June 30, 2024[103] - Total lease liabilities decreased to 2,170,238 thousand RMB as of June 30, 2024, from 2,541,953 thousand RMB at the end of 2023[103] - Investment properties increased to 3,296,840 thousand RMB as of June 30, 2024, up from 1,560,455 thousand RMB at the beginning of the year[105] - The company's capital commitment related to investment in limited partnerships was $16.5 million as of June 30, 2024[153] - The company's capital commitment for property, plant, and equipment as of June 30, 2024 was 752,892 thousand RMB, down from 840,617 thousand RMB in 2023[154] Shareholder and Equity Information - The company repurchased and canceled

Investment Rating - The investment rating for the company is "Buy" and is maintained [4]. Core Views - The company's revenue for H1 2024 reached 14.3 billion HKD, representing a year-on-year increase of 2%, while the net profit attributable to shareholders decreased by 8% to 1.95 billion HKD. The interim dividend payout ratio reached 50%, indicating a strong performance despite the profit decline [4]. - Significant improvement in gross margin and strong cash flow were noted, with gross margin increasing by 1.6 percentage points to 50.4%. The improvement in gross margin was primarily driven by better performance in direct sales and e-commerce [5]. - The company is focusing on profitability rather than just revenue growth, with expectations for improved net profit margins in H2 2024. The forecast for net profit attributable to shareholders for 2024-2026 is 3.1 billion, 3.4 billion, and 3.8 billion HKD, respectively, with corresponding P/E ratios of 11, 10, and 9 times [5]. Summary by Sections Financial Performance - In H1 2024, the company achieved a revenue of 14.3 billion HKD, a 2% increase year-on-year, while the net profit attributable to shareholders was 1.95 billion HKD, down 8% [4]. - The operating profit margin (OPM) decreased by 1.0 percentage points to 16.7%, influenced by increased sales and management expenses [5]. Cash Flow and Inventory - Operating cash flow increased by 41% year-on-year to 2.7 billion HKD, with a net cash balance of 17.6 billion HKD [5]. - The inventory turnover ratio was reported at 3.9, indicating healthy inventory levels despite short-term sales pressure [5]. Market Outlook - The company anticipates accelerated store expansion in the distributor channel in H2 2024, with a high likelihood of meeting annual revenue guidance [5]. - The company is expected to maintain a focus on profitability, with improvements in expense management anticipated in H2 2024 [5].