Investment Rating - The investment rating for the company is Neutral [3][12]. Core Insights - The company is expected to maintain stable revenue and gross margin performance in 2025, with a target price set at HKD 16.25, indicating a potential upside of 11.9% from the current closing price of HKD 14.52 [2][8]. - The company achieved a revenue of RMB 28.68 billion in 2024, reflecting a year-on-year growth of 3.9%, primarily driven by a 7% increase in footwear sales [8][14]. - The gross margin improved by 1 percentage point to 49.4%, attributed to better discount management in e-commerce channels and enhanced efficiency in direct sales channels [8][14]. - The management announced a dividend of RMB 0.5848 per share, increasing the payout ratio to 50% [8][14]. Financial Overview - Revenue projections for the company are as follows: RMB 29.08 billion in 2025, RMB 30.81 billion in 2026, and RMB 32.86 billion in 2027, with corresponding year-on-year growth rates of 1.4%, 5.9%, and 6.6% respectively [5][14]. - Net profit is expected to decline slightly to RMB 2.97 billion in 2025, with a net profit margin of 10.2% [5][14]. - The company plans to optimize its product mix and maintain or slightly improve gross margins despite external uncertainties [8][14]. Performance Metrics - The company’s earnings per share (EPS) are projected to be RMB 1.15 in 2025, with a price-to-earnings (P/E) ratio of 11.9 [5][14]. - The dividend yield is expected to be around 4.2% in 2025, increasing to 5.5% by 2027 [5][14]. - The company’s cash and cash equivalents are projected to grow from RMB 5.44 billion in 2023 to RMB 10.65 billion in 2027 [14][15].

Investment Rating - The investment rating for the company is Neutral with a target price of HKD 16.25, indicating a potential upside of 11.9% from the current closing price of HKD 14.52 [2][7]. Core Insights - The company is expected to maintain stable revenue and gross margin performance in 2025, with a projected revenue of RMB 29,080 million, reflecting a year-on-year growth of 1.4% [3][6]. - The management anticipates that the gross margin will remain stable or slightly improve, supported by product mix optimization and operational cost management [7][8]. - The running category has shown significant growth, with retail sales increasing by 25% and total sales of the three core IPs exceeding 10.6 million pairs [7][8]. Financial Overview - Revenue for 2024 is projected at RMB 28,676 million, a 3.9% increase from 2023, with footwear sales contributing RMB 14,300 million, up 7% [6][8]. - The net profit for 2024 is expected to be RMB 3,013 million, with a net profit margin of 10.5% [6][8]. - The company plans to maintain a dividend payout ratio of 50%, increasing the dividend per share to RMB 0.5848 [7][8]. Operational Performance - The company has successfully optimized its channels, closing 83 inefficient stores while increasing the number of Li Ning YOUNG stores by 40 [7][8]. - E-commerce revenue has increased, now accounting for 31% of total revenue, highlighting its role as a key growth driver [7][8]. - The company aims to strengthen its leading position in the running category while nurturing emerging categories such as outdoor and tennis [7][8]. Financial Projections - The projected financials for the next few years include: - Revenue: RMB 29,080 million in 2025, RMB 30,809 million in 2026, and RMB 32,855 million in 2027 [6][13]. - Net profit: RMB 2,971 million in 2025, RMB 3,375 million in 2026, and RMB 3,871 million in 2027 [6][13]. - The company’s gross margin is expected to be 49.5% in 2025, with a slight increase to 50% by 2027 [14].