LI NING(HK:02331) Guotai Junan Securities·2024-08-17 17:06Investment Rating - The report maintains a "Buy" rating for Li Ning (2331) [2] Core Views - H1 2024 performance exceeded expectations, with profits surpassing forecasts while revenue met expectations [3] - The company revised its full-year 2024 revenue guidance downward due to ongoing macroeconomic pressures [3] - Li Ning's operating quality remains healthy, with the running category performing exceptionally well [4] Financial Performance - H1 2024 revenue reached RMB 14.345 billion, a 2.3% year-on-year increase [4] - Net profit for H1 2024 was RMB 1.952 billion, an 8% year-on-year decrease [4] - Gross margin improved to 50.4%, up 1.6 percentage points year-on-year [4] - Net profit margin declined to 13.6%, down 1.5 percentage points year-on-year [4] - The company plans to pay an interim dividend of 37.75 cents per share, with a payout ratio of 50% [4] Business Operations - Running category sales increased 25% year-on-year in H1 2024, accounting for 30% of total sales [4] - Basketball category sales decreased 20% year-on-year in H1 2024, representing 22% of total sales [4] - Inventory turnover improved to 3.9 months, down from 4-4.5 months in Q1 2024 [4] - E-commerce gross margin increased by 0.9 percentage points, while direct-to-consumer gross margin rose by 0.5 percentage points [4] Market Performance - Current stock price: HKD 13.10 [5] - 52-week price range: HKD 13.10 - 40.75 [5] - Current market capitalization: HKD 33.857 billion [5] Financial Projections - 2024-2026 net profit forecasts adjusted to RMB 3.20/3.62/3.90 billion, down from previous estimates of RMB 3.38/3.75/4.14 billion [4] - Projected PE ratios for 2024-2026: 10/9/8 times [4] - Revenue growth guidance for 2024 revised from mid-single-digit to low-single-digit growth [4]