LI NING(02331) 招银国际·2024-10-28 02:38Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HK15.88 [3][6][18]. Core Insights - The company has reiterated its FY24E targets, but the report expresses caution due to weak demand and inventory buildup. However, gradual improvement is anticipated for FY25E [1][6]. - Retail sales in Q3 2024 showed a slight improvement compared to expectations, with e-commerce growth outpacing offline channels. The report highlights the importance of the upcoming Double 11 shopping festival for sales performance [1][6]. - The management's focus on cost-saving measures and efficiency improvements is noted, but concerns remain regarding operating profit margins due to increased retail discounts and fixed operational costs [1][6]. Summary by Sections Revenue Overview - The company reported revenues of RMB 28,162 million for FY24E, with a projected growth of 2% [2][7]. - Revenue growth is expected to improve to 7.2% in FY25E and 8.4% in FY26E [11][14]. Profitability Metrics - The net profit for FY24E is projected at RMB 3,103 million, with a net profit margin of 11% [7][12]. - The report anticipates a gradual increase in net profit to RMB 3,466 million in FY25E and RMB 3,895 million in FY26E [7][12]. Valuation Metrics - The company is currently trading at a P/E ratio of 11x for FY25E, which is considered attractive compared to the target P/E of 13x [6][16]. - The expected dividend yield for FY25E is 4% [6][16]. Inventory and Sales Dynamics - The inventory turnover ratio is approximately 5 months, indicating a slight increase from the previous quarter [1][6]. - Retail discounts have widened in offline channels, while e-commerce discounts have shown improvement [1][6]. Market Position and Strategy - The company has formed a joint venture to expand its brand presence in the Belt and Road regions, with significant investments planned [6][11]. - The management remains committed to achieving sales growth targets despite current market challenges [1][6].