Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 15.77, representing a potential upside of 20.3% from the current price of HKD 13.10 [2]. Core Insights - The company's revenue for the first half of 2024 was RMB 14.35 billion, reflecting a year-on-year growth of 2.3%. The growth rates for various segments were as follows: retail (+2.7%), wholesale (-1.9%), e-commerce (+11.3%), and overseas business (-15.9%). Notably, the running category saw a significant increase of 25% [1]. - Gross margin improved by 1.6 percentage points to 50.4%, attributed to better discount management on new products and a higher proportion of revenue from direct-to-consumer channels [1]. - Operating expenses increased by 2.5 percentage points to 34.9%, primarily due to higher marketing, advertising, rent, and salary costs, as well as increased investments in information systems and depreciation [1]. - The company declared an interim dividend of RMB 0.3775 per share, with a payout ratio increased to 50% [1]. - The company’s cash flow from operations was RMB 2.73 billion, showing a year-on-year growth of 40.6%, and net cash stood at RMB 17.6 billion [1]. Financial Summary - For the fiscal year 2022, the company reported revenue of RMB 25.80 billion, which increased to RMB 27.60 billion in 2023, with a forecast of RMB 28.28 billion for 2024, indicating a growth rate of 2.5% [3]. - The net profit for 2022 was RMB 4.06 billion, which decreased to RMB 3.19 billion in 2023, with a forecast of RMB 3.16 billion for 2024 [3]. - The earnings per share (EPS) were RMB 1.55 in 2022, dropping to RMB 1.22 in 2023, with a forecast of RMB 1.21 for 2024 [3]. - The company’s gross margin is projected to improve gradually, reaching 50.2% by 2026 [4]. Operational Metrics - The company’s inventory turnover was reported at 3.9 months, with 87% of inventory being less than six months old. Total inventory increased by 9% year-on-year to RMB 2.46 billion [1]. - The average monthly sales per store were RMB 310,000, with a total of approximately 1,650 stores [1]. - The company’s debt-to-asset ratio is projected to decrease from 0.29 in 2023 to 0.26 in 2024, indicating a strengthening balance sheet [4].

Investment Rating - The report maintains a BUY rating for Li Ning, with a trimmed target price of HK$ 16.18, based on a 12x FY24E P/E, down from 15x due to industry de-rating [2][7]. Core Insights - Short-term risks include potential retail discounts, trade fair order adjustments, unfavorable channel mix, operating deleverage, and fixed operating expenses. However, long-term value is still recognized, particularly with an ex-cash FY24E P/E of 5-6x [2][7]. - The FY24E guidance has been revised down to low-single-digit sales growth from mid-single-digit, with a low-teen net profit margin maintained. Retail sales were weak, falling by high-single digits in July to mid-August 2024 [2][7]. - The report indicates a cautious outlook for 2H24E, with retail sales growth forecasts cut to -4% for 3Q24E and +6% for 4Q24E, reflecting a weakening recovery rate compared to 2019 [2][7]. Financial Summary - Revenue for FY24E is projected at RMB 28,162 million, with a YoY growth of 2%. Operating profit is expected to be RMB 3,659 million, and net profit is projected at RMB 3,103 million, reflecting a decrease of 8.8% compared to previous estimates [8][9]. - The gross profit margin is expected to be 49.0% for FY24E, with EBIT margin at 13.0% and net profit margin at 11.0% [9][11]. - The company reported a net profit of RMB 1.96 billion for 1H24, a 7% YoY decline, but beat estimates due to better-than-expected gross profit margin expansion [7][10]. Sales and Channel Performance - In 1H24, sales growth for e-commerce was 11%, while direct retail grew by 3%, and wholesale declined by 2%. The direct retail growth was primarily driven by strong performance in the outlet channel [7][10]. - The report highlights a decline in retail sales, attributed to weaker macro conditions, rising competition, and ineffective marketing strategies. The retail sales to inventory ratio was healthy at 3.9x in 1H24 [7][10]. Earnings Revision - The report revises down FY24E/25E/26E net profit estimates by 9%/12%/13% due to weaker retail sales growth, less improvement in retail discounts, and higher advertising and promotion expenses [7][8]. - The stock is currently trading at 10x FY24E P/E and 9x FY25E P/E, with a long-term positive view maintained despite short-term challenges [7][9].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 22.83 based on a 17x valuation for 2024 [4][8]. Core Insights - The company reported a revenue of CNY 14.35 billion for the first half of 2024, a year-on-year increase of 2.3%, while the net profit attributable to shareholders was CNY 1.95 billion, a decline of 8% year-on-year [1]. - The retail sales showed a slight decline, with the e-commerce channel performing well, while the distribution channel managed shipment pace due to the overall consumption environment [1]. - Gross margin improved by 1.7 percentage points to 50.4%, attributed to better discount management on new products and an increase in the proportion of revenue from direct-to-consumer channels [1]. - Operating cash flow was strong, with net cash inflow from operating activities reaching CNY 2.73 billion, a 40.6% increase year-on-year [1]. - The company is focusing on stable growth and profitability quality in the face of a challenging retail environment, with expectations for low single-digit revenue growth for the year [1]. Financial Summary - Revenue projections for 2024-2026 are CNY 28.57 billion, CNY 31.33 billion, and CNY 34.44 billion, respectively, with year-on-year growth rates of 3.5%, 9.7%, and 9.9% [3]. - Earnings per share (EPS) estimates for 2024, 2025, and 2026 are CNY 1.24, CNY 1.47, and CNY 1.69, respectively [2][3]. - The net profit margin is projected to be around 11.2% for 2024, improving to 12.2% and 12.7% in the following years [3].

Investment Rating - The report maintains a "Buy-A" rating for Li Ning (02331.HK) [1][3] Core Views - The company achieved a revenue of 14.345 billion yuan in H1 2024, representing a year-on-year growth of 2.3%, while the net profit attributable to shareholders was 1.952 billion yuan, a decline of 8.0% year-on-year [1][3] - The company focuses on solidifying its foundation and pragmatic development, leading to stable revenue growth driven by e-commerce and direct sales channels [1][3] - The report highlights the improvement in retail discounts, which contributed to a gross margin increase to 50.4%, up 1.6 percentage points year-on-year [2][3] Summary by Sections Financial Performance - In H1 2024, the company reported a gross margin of 50.4%, a year-on-year increase of 1.6 percentage points, primarily due to improved margins in e-commerce and direct sales channels [2] - The sales expense ratio increased to 30.2%, up 2.0 percentage points year-on-year, with advertising and marketing expenses rising to 8.7% [2] - The operating profit margin decreased by 1.0 percentage points to 16.7%, and the net profit margin fell by 1.5 percentage points to 13.6% [2] Revenue Breakdown - Revenue from footwear, apparel, accessories, and equipment in H1 2024 was 7.844 billion, 5.375 billion, 1.126 billion, and 0.5 billion yuan respectively, with year-on-year growth rates of 4.4%, -4.7%, and 30.3% [1] - The retail sales from running, fitness, basketball, and sports lifestyle categories accounted for 30%, 14%, 22%, and 33% respectively, with year-on-year growth rates of 25%, 7%, -20%, and -7% [1] Channel Performance - Direct sales revenue grew by 2.7% year-on-year, with 1,495 direct stores, a net decrease of 3 stores compared to the beginning of the year [1] - E-commerce revenue increased by 11.4% year-on-year, with double-digit growth in retail sales and improved customer traffic [1][2] - Wholesale revenue declined by 2.0% year-on-year as the company managed the delivery rhythm to ensure healthy inventory levels [1] Future Outlook - The company expects revenue for 2024-2026 to be 28.601 billion, 31.055 billion, and 33.418 billion yuan, with year-on-year growth rates of 3.6%, 8.6%, and 7.6% respectively [3] - Net profit forecasts for the same period are 3.314 billion, 3.687 billion, and 3.966 billion yuan, with growth rates of 4.0%, 11.3%, and 7.6% respectively [3]

Investment Rating - The report maintains a "Buy-A" rating for Li Ning (02331.HK) [1] Core Views - The company achieved a revenue of 14.345 billion yuan in H1 2024, representing a year-on-year growth of 2.3%, while the net profit attributable to shareholders was 1.952 billion yuan, down 8.0% year-on-year [1][2] - The company focuses on solidifying its foundation and pragmatic development, leading to stable revenue growth driven by e-commerce and direct sales channels [1][3] - The report highlights the improvement in retail discounts, which contributed to an increase in gross margin to 50.4%, up 1.6 percentage points year-on-year [2] Summary by Sections Financial Performance - In H1 2024, the company reported a revenue of 14.345 billion yuan, with a year-on-year increase of 2.3% [1] - The net profit attributable to shareholders was 1.952 billion yuan, reflecting a decline of 8.0% year-on-year [1] - The gross margin improved to 50.4%, an increase of 1.6 percentage points, mainly due to higher margins in e-commerce and direct sales channels [2] Revenue Breakdown - Revenue from footwear, apparel, accessories, and equipment in H1 2024 was 7.844 billion yuan, 5.375 billion yuan, 1.126 billion yuan, respectively, with year-on-year growth rates of 4.4%, -4.7%, and 30.3% [1] - The retail sales of running and fitness categories performed well, while basketball category sales declined due to controlled shipments [1] Channel Performance - Direct sales revenue grew by 2.7% year-on-year, with 1,495 direct stores, a net decrease of 3 stores [1] - E-commerce revenue increased by 11.4% year-on-year, with double-digit growth in retail sales [1][2] - Wholesale revenue decreased by 2.0% year-on-year as the company managed the shipment rhythm to ensure healthy inventory levels [1] Future Outlook - The company expects revenue for 2024-2026 to be 28.601 billion yuan, 31.055 billion yuan, and 33.418 billion yuan, with year-on-year growth rates of 3.6%, 8.6%, and 7.6% respectively [3] - Net profit forecasts for the same period are 3.314 billion yuan, 3.687 billion yuan, and 3.966 billion yuan, with growth rates of 4.0%, 11.3%, and 7.6% respectively [3]

Investment Rating - The report maintains a "Hold" rating for Li Ning (2331.HK) [12][27]. Core Views - The company has faced pressure on retail sales, discounts, channel inventory, and profit margins since the second half of last year. Concerns remain about the weakening brand strength compared to peers, despite a low valuation [12][23]. - The management has lowered the 2024 full-year performance guidance to low single-digit revenue growth and a low double-digit net profit margin, emphasizing a focus on stability rather than aggressive expansion [12][24]. - The report indicates that the retail environment remains challenging, with offline sales continuing to decline and the need for potential discounting to stimulate sales, which may pressure gross margins [12][23]. Financial Performance Summary - For 1H24, revenue grew by 2.3% year-on-year, primarily driven by significant growth in badminton wholesale revenue. Excluding this channel, revenue is expected to decline low single digits [12][23]. - Gross margin expanded by 1.6 percentage points year-on-year, attributed to improvements in retail discounts in e-commerce and direct sales channels. However, the sustainability of this improvement is uncertain given the weak sales environment [12][23]. - Channel inventory increased by mid-single digits year-on-year, with a rising inventory-to-sales ratio, indicating a deterioration in inventory age structure [12][23]. - The company’s overall wholesale revenue declined by 3% year-on-year in 1H24, with a more significant drop in wholesale revenue excluding the professional channel [12][23]. Target Price Adjustment - The target price has been lowered to HKD 14.5, based on an 11x forward P/E for the next 12 months, reflecting the ongoing pressure on short-term performance and the need for more evidence to support a more optimistic price outlook [12][24].

Investment Rating - The investment rating for the company is "Buy" (maintained) [2][30]. Core Insights - In H1 2024, the company achieved revenue of HKD 14.345 billion, a year-on-year increase of 2.3%, while the net profit attributable to shareholders was HKD 1.952 billion, a decrease of 8.0%. The interim dividend payout ratio increased from 45% in H1 2023 to 50% in H1 2024 [9][30]. - The company is focusing on enhancing its cash management capabilities and expanding its product offerings and channel development to address multi-tiered market demands, particularly in the running category, which is expected to continue its high growth [30]. Revenue Summary - Revenue by category in H1 2024: Shoes, Apparel, and Accessories generated HKD 7.844 billion, HKD 5.375 billion, and HKD 1.126 billion, reflecting year-on-year changes of +4.4%, -4.7%, and +30.3% respectively [10]. - Revenue by channel in H1 2024: Wholesale, Retail, E-commerce, and Overseas generated HKD 6.590 billion, HKD 3.503 billion, HKD 4.004 billion, and HKD 0.250 billion, with year-on-year changes of -2.0%, +2.7%, +11.4%, and -14.39% respectively [10]. Profitability Summary - The gross profit margin for H1 2024 was 50.4%, an increase of 1.6 percentage points, primarily due to improvements in channel mix and e-commerce gross margins [24]. - Operating profit for H1 2024 was HKD 2.402 billion, with an operating profit margin of 16.7%, down 1.0 percentage points year-on-year [25]. Store and Channel Development - As of H1 2024, the company operated 7,677 stores, a 3.1% increase year-on-year, with 6,239 core brand stores and 1,438 Li Ning Young stores [21]. - The average store area increased to 245 square meters, with an average monthly store efficiency of HKD 310,000 [21]. Cash Flow and Financial Health - The company reported a net cash position of HKD 17.581 billion, a decrease of 2.2% from the end of 2023, with operating cash flow of HKD 2.730 billion, an increase of 40.6% [29].

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Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has demonstrated stable operations with notable performance in the e-commerce channel. For the first half of 2024, the company achieved total revenue of 14.345 billion RMB, a year-on-year increase of 2.3%, while the net profit attributable to shareholders was 1.952 billion RMB, a decrease of 8.0% compared to the previous year [3][4] - The overall gross margin improved to 50.44%, an increase of 1.66 percentage points year-on-year, driven by enhancements in the gross margins of both direct sales and e-commerce channels [4] - The company is focusing on optimizing its store structure and enhancing high-quality and emerging market channels, with a total of 7,677 sales points as of mid-2024, an increase of 229 from the previous year [4] Financial Performance Summary - For the first half of 2024, the revenue breakdown by category is as follows: footwear at 7.844 billion RMB (up 4.4% year-on-year), apparel at 5.375 billion RMB (down 4.7%), and equipment and accessories at 1.126 billion RMB (up 30.3%) [4] - Revenue by channel shows: franchised distributors at 6.590 billion RMB (down 2.0%), direct sales at 3.502 billion RMB (up 2.7%), e-commerce at 4.004 billion RMB (up 11.4%), and international markets at 248 million RMB (down 14.4%) [4] - The company’s operating cash inflow increased by 40.6% to 2.73 billion RMB, indicating healthy operational efficiency [4] Earnings Forecast and Valuation - The company’s revenue is projected to reach 28.531 billion RMB in 2024, with a growth rate of 3%, and net profit is expected to be 3.252 billion RMB, reflecting a 2% increase [6][7] - The price-to-earnings (P/E) ratio is estimated at 10, 8, and 7 for the years 2024, 2025, and 2026 respectively, indicating a favorable valuation outlook [6][7]

上 市 公 司 纺织服饰 2024 年 08 月 17 日 李宁 (02331) 公 司 点 评 / 公 司 点 评 报告原因：有业绩公布需要点评 | --- | --- | |------------------------|---------------------| | 市场数据： | 2024 年 08 月 16 日 | | 收盘价（港币） | 13.10 | | 恒生中国企业指数 | 6161.9 | | 52 周最高/最低（港币） | 40.65/12.88 | | H 股市值（亿港币） | 338.57 | | 流通 H 股（百万股） | 2,584.48 | | 汇率（人民币/港币） | 1.0911 | 一年内股价与基准指数对比走势： -66% -16% 34% HSCEI 李宁 资料来源：Bloomberg 证券分析师 王立平 A0230511040052 wanglp@swsresearch.com 刘佩 A0230523070002 liupei@swsresearch.com 研究支持 刘佩 A0230523070002 liupei@swsresearch.com 联系人 刘佩 ( ...