GOLDEN SUN SECURITIES·2024-04-25 02:02Investment Rating - The report maintains a "Buy" rating for Li Ning [4] Core Views - The company's Q1 2024 performance is stable, with adult revenue showing low single-digit year-on-year growth, while same-store sales declined in the mid-single digits. The company opened 8 new adult stores, bringing the total to 6,214 [1][2] - The children's segment is expected to outperform adults, with revenue growth projected in the single digits for Q1 2024. The total number of children's stores is 1,405, with a net decrease of 23 stores compared to the end of 2023 [2] - The company is focusing on optimizing channel efficiency and adjusting its store structure, with expectations for net store openings in lower-tier cities while closing underperforming stores in higher-tier cities [2] Summary by Sections Financial Performance - For 2024, the company expects revenue growth in the mid-single digits, with a stable profit margin. The projected revenues for 2024-2026 are 34.21 billion, 38.57 billion, and 43.50 billion respectively, with a PE ratio of 12 times for 2024 [2][3] - The revenue for 2023 was 27.60 billion, showing a growth rate of 7% year-on-year, while the net profit was 3.19 billion, reflecting a decline of 21.6% [3][8] Operational Insights - The company reported a healthy inventory turnover ratio of over 4, indicating effective inventory management. Discounts in both online and offline channels are showing improvement [2] - The adult segment's e-commerce sales grew by 20%-30% in the low range, benefiting from a lower base due to a shift in customer traffic back to offline stores [1][2] Market Position - Li Ning's total market capitalization is approximately 45.23 billion HKD, with a total share count of 2.58 billion shares [4] - The company is strategically enhancing its product mix and operational capabilities to improve the efficiency of high-quality stores [2]