LI NING(02331) 申万宏源·2024-10-24 01:12Investment Rating - The report maintains an "Outperform" rating for the company, indicating a positive outlook compared to the market [2]. Core Insights - The company's Q3 2024 sales performance met expectations, with a slight decline in overall retail sales, while e-commerce channels showed growth [2]. - The company has established a joint venture to expand its overseas market presence, with a total investment of HKD 58 million, which is expected to have minimal short-term financial impact but aims for long-term growth [2]. - The company continues to focus on its core sports segment, with strong brand recognition and product development capabilities, projecting net profits of RMB 31 billion, 33 billion, and 36 billion for 2024-2026 [2][3]. Summary by Sections Market Data - Closing price: HKD 16.06 - Market capitalization: HKD 415.07 billion - 52-week high/low: HKD 31.65/12.56 [1]. Sales Performance - Q3 2024 retail sales (excluding Li Ning YOUNG) saw a mid-single-digit decline year-on-year, with offline channels experiencing a higher decline compared to e-commerce, which grew in the mid-single digits [2]. - The company reported a healthy inventory level with a stock-to-sales ratio of approximately 5 months, slightly above the previous year [2]. Financial Projections - Revenue projections for FY2024E to FY2026E are RMB 27.75 billion, RMB 29.20 billion, and RMB 30.98 billion, respectively, with corresponding net profits of RMB 30.96 billion, RMB 33.34 billion, and RMB 35.56 billion [3][6]. - The gross margin is expected to remain stable around 49.5% to 49.6% over the next few years [3]. Operational Adjustments - The company is optimizing its offline store network, with a net increase of 42 stores in the first three quarters of 2024, while planning to open over 100 stores in lower-tier cities [2]. - The company is also focusing on enhancing its product offerings, particularly in the running shoe category, which has shown strong growth [2].