2024-04-25 02:02Investment Rating - The report maintains a "Buy" rating for Li Ning with a target price of HKD 28.3 [2][4]. Core Insights - Li Ning's Q1 2024 performance aligns with market expectations, with overall retail sales showing low single-digit growth year-on-year, driven by a strong e-commerce segment that grew by 20-30% [1][2]. - The company is expected to return to stable growth as inventory levels normalize, and it plans to launch marketing activities in conjunction with the upcoming Paris Olympics to enhance brand visibility [2]. Summary by Sections Financial Performance - For 2024, the expected EPS is projected at HKD 1.30, with forecasts of HKD 1.45 and HKD 1.59 for 2025 and 2026 respectively [2][3]. - Revenue is forecasted to grow from RMB 27,598 million in 2023 to RMB 29,257 million in 2024, reflecting a growth rate of 6.0% [3][9]. - The net profit attributable to shareholders (excluding non-recurring items) is expected to recover from RMB 3,046 million in 2023 to RMB 3,372 million in 2024, marking a growth of 10.7% [3][9]. Channel Performance - E-commerce channels outperformed expectations, with significant growth across various platforms, including over 100% growth on the Dewu platform and more than 20% on Douyin [1][2]. - Offline channels experienced a low single-digit decline, with direct sales showing mid-single-digit growth while wholesale channels faced a mid-single-digit decline [1][2]. Inventory and Discounts - The inventory turnover for offline channels is reported at 4-4.5 months, with 80% of inventory being new products, indicating a healthy inventory status [1][2]. - Retail discounts have improved year-on-year, with an overall discount rate of approximately 60% [1][2]. Store Count and Sales - As of the end of Q1, the total number of sales points decreased by 26 to 6,214, with retail points increasing by 1 to 1,499 and wholesale points decreasing by 27 to 4,715 [1][2]. - Same-store sales showed a low single-digit decline across offline channels, while e-commerce channels recorded a growth of 20-30% [1][2].