Ge Long Hui A P P·2025-12-29 05:44Core Viewpoint - Starting in 2024, Li Ning will actively reduce the scale of its direct-operated stores and control store area, leading to a recovery in direct operating profit margin from approximately 10% in 2023 to mid-teens by the first half of 2025 [1] Group 1: Store Strategy - The company plans to reduce the number of direct-operated stores while maintaining a stable wholesale channel and a slight increase in franchise stores, indicating a gradual recovery in dealer confidence [1] - By the end of 2025, the company will launch "Dragon Stores" and outdoor specialty stores that incorporate Olympic elements, aiming for precise market segmentation through store type differentiation [1] Group 2: Financial Outlook - If brand momentum improves, existing store efficiency and discount rates are expected to enhance operational leverage, potentially driving a new round of channel expansion [1] - The company is viewed as a leading domestic sports brand with an upward operational reversal expectation, long-term profit growth potential, and ample cash reserves [1] Group 3: Valuation - The report maintains a reasonable valuation range for the company at HKD 21.2 to 22.3, corresponding to a price-to-earnings ratio of approximately 19 to 20 times for 2026, and retains an "outperform" rating [1]