Guoxin Securities·2024-08-18 01:08Investment Rating - The report maintains an "Outperform the Market" rating for Li Ning [1][4][32]. Core Insights - The company achieved a revenue growth of 2.3% year-on-year to 14.35 billion yuan in the first half of 2024, despite a challenging consumer environment [1][7]. - Gross margin improved by 1.6 percentage points to 50.4%, driven by better discount management and changes in channel structure [1][7]. - The company plans to increase its interim dividend payout ratio to 50%, up from 45% in the previous year [1][7]. Revenue and Profitability - Revenue for the first half of 2024 was 14.35 billion yuan, with a net profit of 1.95 billion yuan, reflecting an 8% decline year-on-year [1][7]. - The operating profit margin decreased by 0.9 percentage points to 16.7%, while the net profit margin fell by 1.5 percentage points to 13.6% [1][7]. - The company expects revenue growth in 2024 to be in the low single digits, with net profit margin maintained in the low double digits [31][32]. Product Performance - The running category led growth with a 25% increase, with three core running shoe series selling over 5 million pairs [15][32]. - The basketball category saw a decline in both growth and market share, attributed to a slowdown in the overall basketball market [15][32]. - The sports lifestyle category's sales increased significantly, with the soft series achieving a nearly fourfold year-on-year growth [15][32]. Channel Performance - Revenue from the wholesale channel decreased by 2% to 6.59 billion yuan, while direct sales grew by 2.7% to 3.5 billion yuan [13][32]. - E-commerce revenue increased by 11.4% to 4 billion yuan, with a significant improvement in customer traffic and conversion rates [13][32]. - The overall inventory turnover ratio remained healthy, with a 3.9-month inventory turnover period [20][32]. Financial Forecasts - The company revised its profit forecasts for 2024-2026, expecting net profits of 3.15 billion, 3.55 billion, and 3.86 billion yuan respectively [32][33]. - The target price was adjusted to 17.9-19.2 HKD, down from 24.3-25.7 HKD, reflecting a price-to-earnings ratio of 13.5-14.5x for 2024 [32][34].