LI NING(02331) Huajing Securities·2024-10-24 06:39Investment Rating - The report maintains a "Buy" rating for Li Ning with a target price of HK$19.30, representing a potential upside of 26% from the current price of HK$15.28 [1][4]. Core Insights - The report indicates that Li Ning's 3Q24 operational performance met expectations, with projected revenue and net profit for 2024 expected to grow by 2.2% and decline by 3.3% respectively, reaching RMB 28.22 billion and RMB 3.08 billion [4][5]. - The report maintains earnings forecasts and the "Buy" rating, with a target price of HK$19.30, corresponding to a 14x P/E ratio for 2025 [4][5]. Summary by Sections Financial Performance - 3Q24 results showed a slight decline in overall revenue (excluding Li Ning Young), with online sales growing while offline sales faced a decline [4]. - The report forecasts a 0.2% increase in total revenue for 2024, driven by a strong performance in professional channels and a low base effect for the upcoming quarter [5]. - The projected revenue figures for 2024-2026 are RMB 28.22 billion, RMB 29.33 billion, and RMB 30.38 billion respectively, with net profits expected to be RMB 3.08 billion, RMB 3.28 billion, and RMB 3.47 billion [6][7]. Earnings Forecast - The report anticipates a slight decrease in gross margin for 2024, with an expected increase in sales and management expense ratios due to higher marketing expenditures and depreciation costs [5]. - The projected earnings per share (EPS) for 2024-2026 are RMB 1.19, RMB 1.27, and RMB 1.34 respectively [6][7]. Market Position - Li Ning's market strategy includes increasing retail discounts to attract customers, while online discounts have shown improvement [5]. - The report highlights the importance of maintaining a healthy inventory structure, with over 80% of products having a shelf life of less than six months [4].