Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - The company's Q2 revenue growth is slightly slower than Q1 but meets expectations, with a small single-digit increase across all platforms [1] - The company has signed a formal agreement with the Chinese Olympic Committee, becoming the official sportswear partner for the Chinese Olympic team from 2025 to 2028, with marketing efforts expected to ramp up starting in May [3] - The company anticipates increased resource investment in professional research and sports sponsorships, aiming for long-term positioning in the sports market [4] Revenue and Profit Forecast - Revenue projections for 2025, 2026, and 2027 are estimated at 28.87 billion, 30.32 billion, and 31.75 billion CNY, reflecting year-on-year growth of 0.7%, 5.0%, and 4.7% respectively [4] - The forecasted net profit for the same years is 2.36 billion, 2.81 billion, and 3.22 billion CNY, with a significant drop of 22% in 2025 followed by recoveries of 19% and 15% in the subsequent years [4] Product Performance - In Q2, the running and cross-training categories continue to lead with high single-digit growth, while the basketball category faced a 20% decline [2] - The company is expected to gradually enrich its product offerings related to basketball, especially with the promotion of the "Yushua" series shoes following Yang Hansheng's selection for the NBA [2] Marketing and Sponsorship - The company has initiated its Olympic marketing strategy with the launch of the "Glory" series products, and further marketing activities are anticipated with upcoming events like the Chengdu World Games and the Milan Winter Olympics [3]

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company's retail revenue for Q2 2025 showed low single-digit year-on-year growth, consistent with Q1 performance. Offline channels experienced a low single-digit decline, while e-commerce channels grew at a mid-single-digit rate [2][3] - The running and fitness categories continue to outperform, with expected high single-digit growth in revenue for Q2. Basketball remains under pressure, while outdoor and badminton categories are growing rapidly [2][3] - The company is focusing on a stable store strategy, with a net decrease of 18 stores to 6099 by June 30. The company plans to maintain steady expansion in store numbers throughout the year [2][3] - Marketing efforts will focus on themes related to Yang Hansheng and the Olympics, aiming to boost sales in the basketball category and enhance brand recognition [3] Financial Summary - Projected revenue growth for 2025-2027 is 1.7%, 5.3%, and 4.5%, reaching 29.15 billion, 30.69 billion, and 32.07 billion yuan respectively. Net profit is expected to decline by 12.6% in 2025, followed by growth of 6.6% and 6.1% in the subsequent years [3][4] - The company’s earnings per share (EPS) is projected to be 1.02, 1.09, and 1.15 yuan for 2025, 2026, and 2027 respectively, with corresponding price-to-earnings (P/E) ratios of 14.65, 13.75, and 12.96 [4][12] - The company maintains a healthy inventory level despite a challenging consumption environment [3]

机构：交银国际 研究员：肖凯希/钱昊 管理层表示，2 季度的复苏趋势环比1 季度走弱，略低于公司此前预期；此外， 7 月以来公司的流水和 折扣仍然承压。整体来看，我们认为公司下半年销售恢复趋势仍将缓慢，因此，基于更加谨慎的销售预 期，我们下调2025-27 年的净利润预测，给予目标价16.28 港元，维持中性评级。我们认为公司目前估 值已充分反应了当前阶段的稳健经营策略和销售恢复前景。 2 季度线下渠道仍然疲软，库存健康但折扣压力加大：分渠道来看，2 季度线上渠道的流水表现优于线 下渠道，电商渠道录得同比中单位数的增长，而线下渠道录得低单位数的同比下降。相对来说，批发渠 道的流水表现好于零售渠道，线下批发/零售渠道分别录得同比低单位数增长/中单位数下跌。公司表 示，2 季度末库销比恢复到了4 个月的水平，相对健康；但全渠道折扣同比低单位数加深，我们相信持 续的行业促销将给公司的毛利率带来压力，因此我们预期2025 年的毛利率将同比小幅下降。 基于更谨慎的销售假设，我们下调了公司2025-27 年的盈利预测，维持中性评级：2 季度以来，我们看 到行业整体复苏偏软、促销氛围浓厚（如618 活动）。因此，我们认为公 ...

Core Viewpoint - Li Ning's Q2 2025 operational performance shows mixed results, with adult sales under pressure due to a challenging consumption environment and store closures, while e-commerce sales growth has slowed compared to Q1 [1][2][3] Group 1: Sales Performance - Adult sales in Q2 2025 experienced low single-digit year-on-year growth, with offline channel sales declining low single digits and e-commerce sales growing in the mid-single digits [1] - Direct sales channels faced pressure with a year-on-year decline in Q2 2025, attributed to a significant number of store closures in the second half of 2024, resulting in 1,278 direct stores by the end of H1 2025, a net closure of 19 stores compared to the beginning of the year [1] - Wholesale channel sales grew low single digits year-on-year, with 4,821 wholesale stores by the end of H1 2025, indicating a stable performance and potential acceleration in store openings in the second half of the year [1] Group 2: E-commerce and Children's Segment - E-commerce sales growth in Q2 2025 slowed compared to Q1, attributed to a weaker overall sales performance during the 618 shopping festival, with Q2 e-commerce sales growing in the mid-single digits compared to low double digits in Q1 [2] - Li Ning's children's clothing segment, Li Ning YOUNG, is expected to outperform adult sales with steady growth, having 1,435 stores by the end of Q2 2025, a net closure of 33 stores since the beginning of the year [2] Group 3: Financial Outlook - The company is projected to have flat revenue growth in 2025, with a 21% decline in net profit attributable to shareholders, primarily due to increased marketing expenses [3] - Li Ning is focusing on product and marketing strategy optimization, including signing with the Olympic Committee for brand marketing, which may enhance brand influence [3] - The company aims to strengthen its core categories of running and basketball while expanding into other sports categories, which is expected to support long-term growth [3]

Company Overview - In Q2 2025, the retail revenue of the Li Ning brand (excluding Li Ning YOUNG) grew at a low single-digit percentage year-on-year, with a net increase of 11 retail points during the quarter [1] - The wholesale channel continued to outperform direct sales, with healthy inventory levels despite pressure on discounts due to market fluctuations [1] - The retail revenue from offline direct sales declined at a mid-single-digit percentage year-on-year, with a net decrease of 13 retail points, while the offline wholesale channel saw low single-digit growth and a net opening of 24 retail points [1] Product Performance - In terms of product categories, the running category saw high single-digit year-on-year growth, although the growth rate slowed compared to Q1 2025, which benefited from sponsorship of events like the Beijing Marathon [1] - The fitness category continued to perform well with high single-digit year-on-year growth, while the sports lifestyle category stabilized with flat year-on-year performance [1] - The basketball category experienced a decline in line with industry trends, while emerging categories such as outdoor and badminton maintained healthy growth [1] Discount and Inventory Management - Discounts in both online and offline channels deepened year-on-year at a low single-digit percentage, but the company maintained a healthy inventory level, with a channel inventory-to-sales ratio of approximately 4x as of the end of June [1] Future Outlook - Since July, retail has continued to fluctuate, with pressure on offline revenue and discounts for the Li Ning brand [2] - In the second half of the year, the company plans to increase marketing and product investment around the theme of "Olympics and Technology," including activities related to Olympic sponsorship and new product launches in various categories [2] - The management maintains guidance for 2025 revenue to be flat year-on-year and a high single-digit net profit margin [2] Earnings Forecast and Valuation - The company maintains its EPS forecasts for 2025 and 2026 at 0.92 and 1.07 HKD respectively, with the current stock price corresponding to 16x and 14x the 2025 and 2026 P/E ratios [2] - The target price remains at 20.82 HKD, implying a 30% upside potential compared to the current stock price, corresponding to 21x and 18x the 2025 and 2026 P/E ratios [2]

Group 1 - The core viewpoint of the article indicates that Li Ning's overall retail revenue for Q2 2025 showed low single-digit growth year-on-year, with offline and e-commerce channels experiencing low single-digit decline and mid-single-digit growth respectively [1] - As of the end of Q2 2025, Li Ning's main brand store count reached 6,099, with a net increase of 11 stores compared to the previous quarter, but a net decrease of 18 stores compared to the end of the previous year [2] - The company signed NBA player Yang Hansheng, which is expected to boost basketball category sales, as basketball sales declined by 20% year-on-year in Q2 2025 [2] Group 2 - Li Ning plans to increase marketing and R&D investments related to the Olympics and technology in the second half of 2025 and into 2026, following its partnership with the Chinese Olympic Committee [3] - The company deepened discounts in Q2 2025 to drive sales, and inventory levels improved with a sales-to-inventory ratio of around 4 months [3] - Profit forecasts for 2025-2027 have been adjusted downwards, with net profits revised to 2.31 billion, 2.60 billion, and 2.93 billion respectively, while maintaining a "buy" rating based on long-term brand development potential [3]

Core Viewpoint - Li Ning is experiencing low single-digit growth in terminal sales for Q2 2025, with management maintaining a revenue guidance of flat growth for 2025, but expecting a decline in profitability [1][3] Sales Performance - Q2 2025 overall sales growth for Li Ning is low single-digit, with offline sales declining in low single digits, while wholesale shows low single-digit growth and online sales exhibit mid-single-digit growth [1] - By product category, running and fitness show high single-digit growth, sports lifestyle remains flat, basketball sees a 20% decline, and outdoor categories perform well [1] - By sales channel, lower-tier markets outperform higher-tier markets, and outlet stores perform better than full-price stores [1] Discounts and Inventory - Due to slowing terminal sales growth and the need for inventory clearance, discount pressure is significant in Q2 2025, with continued pressure expected in the second half of the year; however, inventory levels are currently healthy [1] - Li Ning's overall inventory turnover rate has decreased to approximately 4 months [1] Product and Marketing Strategy - The company is focusing on functional upgrades in products while expanding Olympic themes across multiple categories, including protective and stability features in running, women's products in sports lifestyle, and more outdoor gear [2] - As of June 30, 2025, Li Ning has 6,099 sales points (excluding Li Ning YOUNG), a net increase of 11 from the previous quarter, but a net decrease of 18 from the beginning of the year; Li Ning YOUNG has 1,435 sales points, with a net decrease of 18 from the previous quarter and 33 from the start of the year [2] - Marketing efforts will focus on the Olympics and technology, with sponsorships and athlete collaborations to enhance brand influence, alongside continued support for marathon events [2] Financial Forecast and Investment Recommendation - As a leading domestic sports footwear and apparel brand, Li Ning is expected to face revenue and profit pressures due to weak consumer demand and intensified market competition; revenue projections for 2025-2027 are 28.74 billion, 29.96 billion, and 31.11 billion yuan, with growth rates of 0%, 4%, and 4% respectively [3] - Net profit projections for the same period are 2.38 billion, 2.53 billion, and 2.72 billion yuan, with year-on-year growth rates of -21%, 7%, and 7% respectively; the current stock price corresponds to a 25 PE of 15.5X, maintaining a strong buy recommendation [3]

Core Viewpoint - Company reported low single-digit growth in retail sales for the second quarter ending June 30, 2025, with a decline in offline channels and a significant increase in e-commerce sales [1][2][3] Retail Performance - As of June 30, 2025, retail sales points (excluding Li Ning YOUNG) totaled 6,099, a net increase of 11 from the previous quarter but a net decrease of 18 year-to-date, with retail business down by 19 and wholesale business up by 1 [1] - E-commerce virtual store business recorded a mid-single-digit growth, while offline channels saw a low single-digit decline [1][2] Sales and Discounts - The overall sales revenue for Li Ning in the second quarter showed low single-digit growth, with e-commerce performing better than offline sales [3] - Retail discounts increased, leading to pressure on margins, but the inventory-to-sales ratio improved to a four-month high [3][4] Marketing Strategy - Marketing efforts are focused on two main themes: NBA (with player Yang Hansheng) and the Olympics, with a significant increase in marketing expenses expected in the second half of the year [2][3] - The company aims to leverage the NBA and Olympic themes to enhance brand visibility and drive sales growth [3][4] Financial Outlook - The company maintains its profit forecast, expecting net profits of 2.51 billion, 2.83 billion, and 3.04 billion yuan for 2025-2027, reflecting year-on-year changes of -16.8%, +12.8%, and +7.6% respectively [2][4] - Target price is set between 17.9 and 19.2 HKD, corresponding to a 2025 PE ratio of 17.2-18.5x, with a rating of "outperform" [2][4]

Macro and Strategy - June financial data shows a significant rebound in credit, with new social financing reaching 4.20 trillion yuan, exceeding expectations of 3.71 trillion yuan, and new RMB loans at 2.24 trillion yuan, surpassing the forecast of 1.84 trillion yuan [8][9][10] - The M2 money supply grew by 8.3% year-on-year, indicating a recovery in domestic economic momentum as private sector balance sheet expansion improves [8][9] - The "seesaw effect" between government financing and corporate loans has weakened, suggesting a shift in credit dynamics as local governments approach their annual debt targets [9][10] Retail Industry - The jewelry market is projected to grow steadily, with the market size reaching 728 billion yuan in 2024, reflecting a compound annual growth rate of 3.6% since 2019 [11][12] - The top five companies in the jewelry sector hold a market share of 41.4%, indicating increasing industry concentration as consumer preferences shift towards quality and design [11][12] - The retail sector is benefiting from the recent Amazon Prime Day, which generated an estimated $24.1 billion in sales, a 30% increase year-on-year, highlighting the growth potential in cross-border e-commerce [13][14] Food and Beverage Industry - The food and beverage sector saw a 0.92% increase, underperforming the Shanghai Composite Index by 0.17 percentage points [14] - The liquor market is stabilizing, with major brands focusing on brand positioning and market health, while the overall demand remains under pressure [15][16] - Recommendations include leading brands like Kweichow Moutai and Wuliangye, which have shown resilience and potential for recovery [15][16] Construction and Building Materials - The construction materials sector is expected to improve due to a shift towards healthy competition and urban renewal initiatives, with a focus on technological innovation [17][18] - Cement prices have stabilized, with a slight decrease of 0.4% week-on-week, while demand remains steady despite seasonal fluctuations [17][18] - Recommendations include companies like Three Trees and China National Building Material, which are well-positioned to benefit from domestic demand [18] Computer Industry - The AI ASIC market is rapidly expanding, with a projected market size growth from $14.8 billion in 2024 to $83.8 billion by 2030, reflecting a compound annual growth rate of 33.5% [19][20] - The price advantage of AI ASIC chips over GPUs is significant, with average prices of $5,236 compared to $8,001 for GPUs, making them more attractive for specific applications [19][20] - Companies like Google and Amazon are accelerating their development of ASIC chips, indicating strong future demand in this sector [21] Home Appliances - The home appliance sector is experiencing stable growth in domestic sales, driven by government subsidies, while exports face challenges due to high bases and tariff impacts [22][23] - White goods are seeing a slight increase in domestic sales, with air conditioning units showing a 9.5% growth in domestic shipments [22][23] - Recommendations include leading brands such as Midea and Gree, which are expected to maintain strong performance [22][23] Pharmaceutical Industry - Merck's acquisition of Verona for $10 billion aims to enhance its portfolio with a new COPD treatment, indicating strong growth potential in respiratory therapies [27][28] - WuXi AppTec is projected to achieve a 102% increase in net profit for the first half of 2025, reflecting robust operational performance [29] - The pharmaceutical sector is showing resilience, with a focus on innovative treatments and strategic acquisitions [27][28] Coal Industry - The coal market is expected to stabilize as domestic production increases and imports decrease, with a projected production of 4.85 billion tons in 2025, a 2% increase year-on-year [31][32] - Demand for coal is anticipated to improve in the second half of the year, particularly for non-electric uses such as chemical production [33] - Recommendations include leading coal companies like China Shenhua and China Coal Energy, which are well-positioned to benefit from market dynamics [34] Electronics Industry - The electronics sector is experiencing positive momentum, with a 0.93% increase in stock performance, driven by strong demand in the optical and semiconductor segments [34] - The industry is expected to see significant catalysts in the coming months, particularly in the context of AI and cloud computing advancements [34] - Companies involved in ASIC development are likely to benefit from the ongoing trends in computing and data processing [34]

Investment Rating - The report maintains an "Outperform" rating for Li Ning [1][6][25] Core Views - Li Ning's second quarter performance aligns with expectations, with overall channel revenue showing low single-digit growth, while offline channels experienced a decline [6] - The company is actively managing risks in a challenging retail environment, with a focus on long-term stability [6] - Marketing efforts are expected to increase due to the endorsement of NBA player Yang Hanshen and the partnership with the Chinese Olympic Committee [6] Financial Data and Profit Forecast - Revenue projections for Li Ning are as follows: - 2023: 276 billion RMB - 2024: 287 billion RMB - 2025E: 288 billion RMB - 2026E: 301 billion RMB - 2027E: 312 billion RMB - Net profit forecasts are: - 2023: 31.9 billion RMB - 2024: 30.1 billion RMB - 2025E: 24.8 billion RMB - 2026E: 26.4 billion RMB - 2027E: 27.8 billion RMB - The expected PE ratios are 12 for 2023, 12 for 2024, 15 for 2025, 14 for 2026, and 13 for 2027 [5][6][16] Company Performance Insights - The inventory level is healthy, with a stock-to-sales ratio of approximately 4 months, although discount rates are under pressure due to weak industry demand [6] - Running and fitness categories are leading growth, while basketball products are experiencing a decline of over 20% [6] - The number of sales points for Li Ning (excluding Li Ning Young) is 6099, with a net increase of 11 stores in the second quarter [6] - The company plans to continue opening new stores in the second half of the year, maintaining its annual store opening plan [6]