LI NING(02331) 华兴证券·2024-04-29 03:32Investment Rating - The report maintains a "Buy" rating for Li Ning with a target price of HK19.90 [1][2][3]. Core Insights - The report projects a revenue growth of 5.2% year-on-year for 2024, reaching RMB 29.03 billion, and a net profit growth of 5.1% to RMB 3.35 billion, maintaining a net profit margin of 11.5% [3][4]. - The company is focusing on growth drivers such as running shoes and basketball products, with plans to expand its product lines and optimize store configurations in lower-tier cities [3][4]. - The report slightly adjusts the target price down by 0.5% but maintains the earnings forecasts for 2024-2026, with expected revenue growth rates of 5.2%, 6.0%, and 5.8% respectively [4][6]. Summary by Sections Financial Projections - Revenue for 2024 is projected at RMB 29,033 million, with a gross profit margin of 49.6% [5][6]. - The net profit for 2024 is expected to be RMB 3,349 million, with an EPS of RMB 1.30 [5][6]. - The report anticipates a stable management expense ratio of 4.6% and an increase in sales expense ratio to 33.3% [6]. Market Position and Strategy - Li Ning plans to launch new products in the running and basketball categories, targeting both high-end and value segments to capture market share [3][4]. - The company aims to open 75 new stores in 2024, focusing on lower-tier cities while closing underperforming stores in higher-tier cities [3][4]. Valuation Metrics - The report maintains a P/E ratio of 17x for 2025, with a slight adjustment in net profit forecasts for 2024-2026 [4][6]. - The projected net profit for 2025 and 2026 is RMB 3,673 million and RMB 4,023 million respectively, with corresponding EPS of RMB 1.42 and RMB 1.56 [5][6].