Shanxi Securities·2024-08-19 04:30Investment Rating - The report maintains a "Buy-A" rating for Li Ning (02331.HK) [1][3] Core Views - The company achieved a revenue of 14.345 billion yuan in H1 2024, representing a year-on-year growth of 2.3%, while the net profit attributable to shareholders was 1.952 billion yuan, a decline of 8.0% year-on-year [1][3] - The company focuses on solidifying its foundation and pragmatic development, leading to stable revenue growth driven by e-commerce and direct sales channels [1][3] - The report highlights the improvement in retail discounts, which contributed to a gross margin increase to 50.4%, up 1.6 percentage points year-on-year [2][3] Summary by Sections Financial Performance - In H1 2024, the company reported a gross margin of 50.4%, a year-on-year increase of 1.6 percentage points, primarily due to improved margins in e-commerce and direct sales channels [2] - The sales expense ratio increased to 30.2%, up 2.0 percentage points year-on-year, with advertising and marketing expenses rising to 8.7% [2] - The operating profit margin decreased by 1.0 percentage points to 16.7%, and the net profit margin fell by 1.5 percentage points to 13.6% [2] Revenue Breakdown - Revenue from footwear, apparel, accessories, and equipment in H1 2024 was 7.844 billion, 5.375 billion, 1.126 billion, and 0.5 billion yuan respectively, with year-on-year growth rates of 4.4%, -4.7%, and 30.3% [1] - The retail sales from running, fitness, basketball, and sports lifestyle categories accounted for 30%, 14%, 22%, and 33% respectively, with year-on-year growth rates of 25%, 7%, -20%, and -7% [1] Channel Performance - Direct sales revenue grew by 2.7% year-on-year, with 1,495 direct stores, a net decrease of 3 stores compared to the beginning of the year [1] - E-commerce revenue increased by 11.4% year-on-year, with double-digit growth in retail sales and improved customer traffic [1][2] - Wholesale revenue declined by 2.0% year-on-year as the company managed the delivery rhythm to ensure healthy inventory levels [1] Future Outlook - The company expects revenue for 2024-2026 to be 28.601 billion, 31.055 billion, and 33.418 billion yuan, with year-on-year growth rates of 3.6%, 8.6%, and 7.6% respectively [3] - Net profit forecasts for the same period are 3.314 billion, 3.687 billion, and 3.966 billion yuan, with growth rates of 4.0%, 11.3%, and 7.6% respectively [3]