LI NING(02331) 华创证券·2024-08-19 10:41Investment Rating - The investment rating for the company is "Strong Buy" with a target price of HKD 20.43, while the current price is HKD 13.10 [1]. Core Views - The company's performance in the first half of 2024 met expectations, with revenue of HKD 14.35 billion, a year-on-year increase of 2.3%, and a net profit of HKD 1.95 billion, down 8.0% year-on-year. The earnings per share (EPS) is HKD 0.76, and the proposed interim cash dividend is HKD 0.378 per share, with a payout ratio of 50% [1]. - The adult apparel business faced challenges, while the children's apparel segment showed steady growth. The overall retail sales for adult products saw a low single-digit decline, with online direct sales increasing by 10-20% and offline sales declining in low single digits [1]. - The running category remains highly popular, with the company continuing to enhance its product matrix. Revenue from footwear, apparel, and equipment increased by 4.4%, decreased by 4.7%, and increased by 30.3% respectively [1]. - The company is actively adjusting its store structure, focusing on high-tier cities and enhancing operational efficiency through new retail channels [1]. - Gross margin improved by 1.6 percentage points to 50.4%, driven by discount improvements and channel structure optimization. The net profit margin increased by 1.5 percentage points to 13.6% [1]. Financial Summary - For the fiscal years 2024 to 2026, the expected net profits are HKD 3.227 billion, HKD 3.521 billion, and HKD 3.766 billion respectively, with corresponding price-to-earnings (P/E) ratios of 10x, 9x, and 8x [2]. - The total revenue for 2024 is projected to be HKD 28.355 billion, with a year-on-year growth rate of 2.4% [2]. - The company’s total assets are expected to reach HKD 37.968 billion by 2024, with a debt-to-asset ratio of 27.2% [6].