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].

Investment Rating - The report maintains a BUY rating for the company, indicating a potential return of over 15% over the next 12 months [2][6][17]. Core Views - The company has slightly exceeded retail sales growth expectations in 3Q24, but there are concerns regarding weak demand and inventory levels for FY24E. A gradual improvement into FY25E is anticipated [2][6]. - The management has reiterated a low-single-digit sales growth and low-teen net profit margin for FY24E, but the report adopts a more conservative stance, projecting only 2% sales growth and an 11% net profit margin [2][6]. - The company is focused on cost savings and efficiency improvements, including reductions in advertising and promotional expenses and store closures, but there are concerns about operating profit margins due to increased retail discounts and fixed operating expenses [2][6]. Financial Summary - Revenue is projected to grow from RMB 28,162 million in FY24E to RMB 30,195 million in FY25E, reflecting a growth rate of 7.2% [3][11]. - Net profit is expected to increase from RMB 3,103 million in FY24E to RMB 3,466 million in FY25E, with a net profit margin of 11.5% [3][11]. - The company’s earnings per share (EPS) is forecasted to rise from RMB 1.19 in FY24E to RMB 1.33 in FY25E [3][11]. Valuation Metrics - The target price for the company has been raised to HK$19.58, based on a 13x FY25E P/E ratio, while the current trading P/E is 11x [4][6]. - The report highlights a dividend yield of 4% for FY25E, which is considered attractive [2][6]. Market Performance - The company’s stock has shown a 23.3% upside potential from the current price of HK$15.88 to the target price [4]. - Recent retail sales trends indicate a mixed performance, with e-commerce growth being more resilient compared to offline sales [2][6].

Investment Rating - The report maintains a "Buy" rating for Li Ning with a target price of HK$19.30, indicating a potential upside of 25% from the current price of HK$15.50 [1]. Core Insights - The establishment of a joint venture is seen as beneficial for Li Ning, allowing the company to focus on the domestic market while leveraging external expertise for overseas expansion. The joint venture aims to achieve revenue of US$1 billion in its fourth year, reflecting the company's commitment to international growth [4][5]. - Li Ning's overseas business currently accounts for approximately 2% of total revenue, with expectations for significant growth through the joint venture [4]. - The financial projections indicate a modest revenue growth of 2.2% in 2024, with further increases of 3.9% and 3.6% in 2025 and 2026, respectively [5][6]. Financial Summary - Revenue projections for Li Ning are as follows: RMB 28.2 billion in 2024, RMB 29.3 billion in 2025, and RMB 30.4 billion in 2026, with corresponding net profits of RMB 3.08 billion, RMB 3.28 billion, and RMB 3.47 billion [6][7]. - The earnings per share (EPS) are projected to be RMB 1.19 for 2024, RMB 1.27 for 2025, and RMB 1.34 for 2026, with a price-to-earnings (P/E) ratio of 14 times for 2025 [1][6].

Investment Rating - The investment rating for the company is "Buy" with a target price set at 20% above the current price of 15.5 HKD [3][11]. Core Insights - The company is experiencing a decline in retail sales across offline channels, while e-commerce sales are showing growth. The total number of sales points has increased to 6,281, with a net addition of 42 points in the last quarter [2][3]. - A joint venture has been established to develop and operate the Li Ning brand outside mainland China, with a total capital of 200 million HKD. This move aims to enhance brand reputation and leverage cross-border resources [4]. - Supply chain integration has improved efficiency and product quality, with a focus on digital management and cost control strategies [5]. - Innovations in retail channels and logistics management are enhancing product turnover and distribution efficiency [6]. Summary by Sections Basic Data - Total shares outstanding: 2,584.48 million - Total market capitalization: 40,059.45 million HKD - Net asset value per share: 10.98 HKD - Debt-to-asset ratio: 27.10% - 1-year high/low price: 31.65/12.56 HKD [1]. Sales Performance - As of Q3 2024, retail sales (excluding Li Ning YOUNG) have decreased, with offline channels seeing a significant drop. E-commerce, however, has shown a positive trend [2][3]. Joint Venture Development - The joint venture aims to expand the Li Ning brand internationally, with significant cash contributions from various partners, ensuring a majority stake for Li Ning Group and its founder [4]. Supply Chain and Efficiency - The company has expanded its supply chain capacity, enhancing overall efficiency and product quality through strict supplier selection and digital management [5]. Retail and Logistics Innovations - The logistics management platform is improving, with new logistics centers set to enhance product flow and distribution efficiency [6].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 24.95 HKD based on a 19x valuation for 2024 [2][7]. Core Insights - The company reported a decline in revenue for Q3 2024, with overall sales for the Li Ning brand experiencing a mid-single-digit percentage decrease compared to the previous half-year. Offline channels saw a high single-digit decline, while e-commerce channels achieved mid-single-digit growth [1]. - As of September 30, 2024, the number of sales points in China reached 6,281, a net increase of 42 from the previous quarter. This includes a net decrease of 14 in retail and a net increase of 55 in wholesale [1]. - The establishment of a joint venture with Sequoia to expand into international markets is noted, with the company investing 5.8 million HKD for a 29% stake. The financial impact of this venture is expected to be limited, with a payment of 58 million HKD in Q4 [1]. - Despite the pressure on retail revenue, the company is expected to manage inventory effectively and maintain a low double-digit net profit margin for the year, supported by strict cost control [1]. Financial Forecast and Ratios - The earnings per share (EPS) estimates for 2024-2026 have been adjusted to 1.20, 1.37, and 1.54 CNY, down from previous estimates of 1.24, 1.47, and 1.69 CNY [2][7]. - The company’s projected revenue for 2024 is 25,803 million CNY, with a growth rate of 2.4%, followed by 7.6% and 8.6% in subsequent years [5]. - The gross margin is expected to improve slightly from 48.4% in 2023 to 49.2% in 2024, while the net margin is projected to decrease from 11.5% to 11.0% [5].