KAIYUAN SECURITIES·2024-08-18 15:06Investment Rating - The investment rating for the company is "Buy" (maintained) [2][30]. Core Insights - In H1 2024, the company achieved revenue of HKD 14.345 billion, a year-on-year increase of 2.3%, while the net profit attributable to shareholders was HKD 1.952 billion, a decrease of 8.0%. The interim dividend payout ratio increased from 45% in H1 2023 to 50% in H1 2024 [9][30]. - The company is focusing on enhancing its cash management capabilities and expanding its product offerings and channel development to address multi-tiered market demands, particularly in the running category, which is expected to continue its high growth [30]. Revenue Summary - Revenue by category in H1 2024: Shoes, Apparel, and Accessories generated HKD 7.844 billion, HKD 5.375 billion, and HKD 1.126 billion, reflecting year-on-year changes of +4.4%, -4.7%, and +30.3% respectively [10]. - Revenue by channel in H1 2024: Wholesale, Retail, E-commerce, and Overseas generated HKD 6.590 billion, HKD 3.503 billion, HKD 4.004 billion, and HKD 0.250 billion, with year-on-year changes of -2.0%, +2.7%, +11.4%, and -14.39% respectively [10]. Profitability Summary - The gross profit margin for H1 2024 was 50.4%, an increase of 1.6 percentage points, primarily due to improvements in channel mix and e-commerce gross margins [24]. - Operating profit for H1 2024 was HKD 2.402 billion, with an operating profit margin of 16.7%, down 1.0 percentage points year-on-year [25]. Store and Channel Development - As of H1 2024, the company operated 7,677 stores, a 3.1% increase year-on-year, with 6,239 core brand stores and 1,438 Li Ning Young stores [21]. - The average store area increased to 245 square meters, with an average monthly store efficiency of HKD 310,000 [21]. Cash Flow and Financial Health - The company reported a net cash position of HKD 17.581 billion, a decrease of 2.2% from the end of 2023, with operating cash flow of HKD 2.730 billion, an increase of 40.6% [29].