Core Viewpoint - Li Ning's performance in H1 2025 exceeded market expectations, with revenue growth driven by wholesale channels and professional products, despite challenges in certain categories [1][2] Financial Performance - In H1 2025, Li Ning achieved revenue of 14.82 billion yuan, a year-on-year increase of 3.3%, and a net profit attributable to shareholders of 1.74 billion yuan, a decrease of 11.0% [1] - The company plans to distribute an interim dividend of 870 million yuan, with a payout ratio of 50% [1] Channel Performance - Revenue from direct sales, wholesale, and e-commerce channels in H1 2025 was 3.38 billion yuan (-3%), 6.88 billion yuan (+4%), and 4.30 billion yuan (+7%) respectively, aligning with overall sales growth [1] - The running and training categories saw significant growth, each increasing by 15% year-on-year, while basketball and lifestyle categories continued to decline, with decreases of 20% and 7% respectively [1] Operational Metrics - Gross margin in H1 2025 was 50.0%, a slight decrease of 0.4 percentage points year-on-year, attributed to deeper discounts and a slight increase in e-commerce sales proportion [1] - Operating profit margin (OPM) was 16.5%, a decrease of 0.2 percentage points year-on-year, but still above market expectations [1] - Advertising and marketing expenses increased by 0.3 percentage points to 9.0% of revenue, with higher spending anticipated in H2 2025 [1] Product and Inventory Management - The inventory turnover ratio remained stable at approximately 4 months, with new products accounting for 82% of sales, a slight decrease of 1 percentage point year-on-year [2] - Professional products contributed over 60% to revenue, with improved discount rates and a sell-through rate maintained between 70%-80% [2] Future Outlook - The company is expected to achieve net profits of 2.59 billion yuan, 2.77 billion yuan, and 2.99 billion yuan for the years 2025-2027, with corresponding price-to-earnings ratios of 17, 16, and 15 times [2] - Increased brand promotion efforts are anticipated to seek growth amidst intensifying competition, with potential recovery in the basketball category due to new product launches [2]