Ge Long Hui·2026-01-17 06:27Core Viewpoint - Li Ning reported a low single-digit decline in overall platform revenue for Q4 2025, excluding Li Ning YOUNG, with offline channels experiencing a mid single-digit decline and e-commerce channels remaining flat. The company maintains a "buy" rating with a target price of HKD 24 based on a 20x PE for 2026 [1][2]. Group 1: Revenue Performance - Overall platform revenue (excluding Li Ning YOUNG) recorded a low single-digit decline year-on-year in Q4 2025, with offline channels (including retail and wholesale) showing a mid single-digit decline [1]. - Retail channels experienced a low single-digit decline, while wholesale channels saw a mid single-digit decline, although retail performance was better than initial expectations due to increased clearance and promotional efforts in the second half of the year [1]. - E-commerce channels remained flat, with notable growth in specific platforms such as Douyin (double-digit growth), JD.com (single-digit growth), and Vipshop (key channel for inventory clearance) [1]. Group 2: Product and Inventory Management - In terms of product categories, running shoes recorded a mid single-digit growth, while sports lifestyle and basketball categories experienced negative growth; outdoor products performed well [1]. - The inventory-to-sales ratio for Q4 was maintained at a healthy level of 4-5, but discounts deepened slightly year-on-year and quarter-on-quarter, currently slightly above the mid-60% range, primarily due to the need for increased discounts to clear inventory in a warm winter [1]. - The company plans to improve revenue performance through product adjustments and optimizations [1]. Group 3: Store Expansion and New Store Formats - As of December 31, the number of Li Ning stores (excluding Li Ning YOUNG) was 6,091, a net decrease of 41 stores from Q3, with a net decrease of 26 stores year-to-date; direct retail stores saw a net decrease of 59 stores, while wholesale stores increased by 33 [1]. - The number of children's clothing stores increased by 38 from Q3, totaling 1,518 stores, with a year-to-date net increase of 50 stores, aligning with the company's planning [1]. - The newly launched "Dragon Store" format has been well-received by consumers, targeting a demographic that values quality and social status, and the company plans to continue expanding this store format and enriching its product line [1].