SINOLINK SECURITIES·2025-07-28 09:27Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for future performance with expected price increases of over 15% in the next 6-12 months [4][20]. Core Insights - The chairman of the company, Li Ning, has significantly increased his stake, acquiring approximately 51.79 million shares for about 809 million HKD, raising his ownership from 10.57% to 13.08%, marking the largest increase since 2006, reflecting strong confidence in the company's future [2][14]. - The partnership with the Chinese Olympic Committee (COC) for the 2025-2028 period is expected to enhance the company's core product lines, providing professional equipment for major international events, which is anticipated to drive significant growth in key categories such as basketball and running [2][15]. - The company is optimizing its channel strategy by closing underperforming stores, resulting in a net reduction of 18 stores in the past year, which has improved overall store efficiency [3]. - A multi-faceted brand marketing strategy has been implemented, including collaborations with cultural institutions and sponsorship of major events, aimed at enhancing brand strength [3][16]. - The company is expected to increase its expenditure in 2025, which may pressure short-term profit margins but is projected to yield positive results in the medium to long term [3][16]. Financial Projections - The company is forecasted to achieve net profits of 2.43 billion, 2.83 billion, and 3.13 billion RMB for the years 2025, 2026, and 2027 respectively, with a corresponding price-to-earnings (P/E) ratio of 15, 13, and 12 times [4][20]. - Revenue is projected to grow from 27.6 billion RMB in 2023 to 33.9 billion RMB by 2027, with a compound annual growth rate (CAGR) of approximately 7.68% [9][20].