GOLDEN SUN SECURITIES·2026-01-21 10:25Investment Rating - The report maintains a "Buy" rating for Li Ning [6] Core Insights - The signing of the Chinese Olympic Committee in the first half of 2025 marks the beginning of a new product and marketing cycle for Li Ning, with expectations for improved performance and stock price recovery in the medium to long term [1][14] - The company has faced pressure on its fundamentals due to fluctuations in the consumer environment, with a reported revenue of 14.8 billion yuan and a net profit of 1.7 billion yuan in the first half of 2025, reflecting a year-on-year change of +3.3% and -11% respectively [1][15] - The sportswear market is expected to grow, with the Chinese sports apparel market projected to reach 260.2 billion yuan by 2024, and a CAGR of 9% from 2025 to 2029 [2] Company Overview - Li Ning's short-term operations are experiencing fluctuations, but the fundamentals are expected to improve. The company has seen a decline in revenue and net profit since 2022, with a forecasted revenue of 28.7 billion yuan and a net profit of 3 billion yuan for 2024 [15] - The revenue structure is primarily wholesale, with 46% from wholesale, 23% from direct sales, and 29% from e-commerce as of the first half of 2025 [15] Industry Trends - The demand for sports footwear and apparel among residents is resilient, with increasing participation in sports leading to a diversified and professionalized market [2] - The report highlights the importance of the Olympic cycle in enhancing brand strength and increasing sponsorship in niche categories [2] Competitive Positioning - Li Ning is focusing on product optimization and enhancing brand strength during the Olympic cycle, with a significant increase in sponsorship for running and basketball categories [3] - The company is also expanding its outdoor product offerings and enhancing the diversity of its store inventory to drive revenue growth [3] Financial Forecast and Investment Recommendations - The forecast for net profit from 2025 to 2027 is 2.742 billion yuan, 2.901 billion yuan, and 3.302 billion yuan respectively, with growth rates of -9%, +5.8%, and +13.8% [4] - The current market capitalization corresponds to a PE ratio of 17 times for 2026, indicating potential for valuation improvement as the company's marketing strategies and product optimizations take effect [4]