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]

Investment Rating - The investment rating for the company is "Buy" and is maintained [6]. Core Views - The company reported a revenue of 14.82 billion yuan for H1 2025, representing a year-on-year increase of 3.3%, while the net profit attributable to shareholders was 1.74 billion yuan, down 11.0% year-on-year, slightly exceeding expectations. The company plans to distribute an interim dividend of 870 million yuan, with a payout ratio of 50% [2][4]. Summary by Sections Performance Overview - In H1 2025, the company's revenue reached 14.82 billion yuan, with a year-on-year growth of 3.3%. The net profit attributable to shareholders was 1.74 billion yuan, reflecting a year-on-year decline of 11.0%. The performance was slightly better than expected, and the company intends to distribute an interim dividend of 870 million yuan, maintaining a dividend payout ratio of 50% [2][4]. Channel Performance - Revenue from direct sales, wholesale, and e-commerce channels in H1 2025 was 3.38 billion yuan, 6.88 billion yuan, and 4.30 billion yuan, respectively, with year-on-year changes of -3%, +4%, and +7%. The running and training categories were the main drivers of revenue growth, while basketball and lifestyle categories continued to decline [6]. Operational Metrics - The overall operating profit margin (OPM) was 16.5%, slightly down by 0.2 percentage points year-on-year, but better than market expectations. The gross margin decreased by 0.4 percentage points to 50.0%. The company increased its advertising and marketing expenses, which accounted for 9.0% of revenue, up 0.3 percentage points year-on-year [6]. 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, 2026, and 2027, respectively. The current price corresponds to price-to-earnings (P/E) ratios of 17, 16, and 15 times for the respective years [8].

Core Viewpoint - The company's 1H25 performance met expectations, with a revenue increase of 3% to 14.8 billion RMB and a net profit decrease of 11% to 1.74 billion RMB, alongside a mid-term dividend declaration of 0.3359 RMB per share, reflecting a payout ratio of approximately 50% [1][2]. Revenue and Product Performance - Revenue from running and training products continued to grow healthily, with running and training categories maintaining a 15% year-on-year growth, accounting for 34% and 16% of total sales respectively [1]. - Revenue from wholesale (excluding Li Ning YOUNG and international business) increased by 5% to 6.5 billion RMB, while direct sales revenue (excluding Li Ning YOUNG) decreased by 4% to 3.2 billion RMB, with a net closure of 19 stores [1][2]. - Online revenue grew by 7% to 4.3 billion RMB [1]. Profitability and Financial Metrics - The gross profit margin decreased by 0.4 percentage points to 50.0%, primarily due to changes in channel structure and increased promotions in direct sales [2]. - The operating profit margin fell by 0.3 percentage points to 16.5%, influenced by a decline in financial income and an increase in impairment losses [2]. - The net profit margin decreased by 1.9 percentage points to 11.7% [2]. Inventory and Receivables Management - Inventory remained at a relatively healthy state, with a low single-digit year-on-year growth and a healthy inventory turnover ratio maintained for four months [2]. - The proportion of new products within six months in the channel inventory was 82%, and accounts receivable turnover days remained at a favorable level of 14 days [2]. Future Outlook - The company expects revenue fluctuations in July and August but remains committed to long-term investments in marketing resources for the Olympics and enhancing multi-category product R&D [2]. - The company aims to improve multi-channel operational efficiency and maintains a positive long-term development outlook [2]. Earnings Forecast and Valuation - The earnings per share (EPS) forecast for 2025/26 remains unchanged at 0.92/1.07 RMB, with the current stock price corresponding to 18/15 times the 2025/26 price-to-earnings ratio [3]. - The target price has been raised by 9% to 22.68 HKD, reflecting a 25% upside potential from the current stock price [3].

Core Viewpoint - The company shows steady growth in its main brand and significant growth in the Saucony brand, with a positive long-term outlook driven by strategic initiatives and product expansion [1][2] Group 1: Main Brand Performance - In Q2 2025, the main brand's total revenue showed low single-digit year-on-year growth, maintaining a stable performance overall [1] - The e-commerce segment is expected to lead in growth, while the children's segment is anticipated to outperform the adult segment [1] - The running category continues to be a strong growth driver, with expectations of double-digit year-on-year growth in the first half of the year [1] Group 2: Saucony Brand Performance - Saucony's revenue grew over 20% year-on-year in Q2 2025, although the growth rate slowed compared to Q1 2025 [2] - The company is optimizing its channels and upgrading products, focusing on elite runners and professional product areas, which is expected to drive 30%-40% revenue growth for the year [2] - The expansion of new stores in lower-tier cities is expected to enhance store efficiency and contribute to revenue growth [2] Group 3: Financial Forecast and Valuation - The company maintains its net profit forecasts for 2025-2027 at 1.37 billion, 1.53 billion, and 1.71 billion yuan respectively [2] - The target price is set at 6.58 HKD, with a revised PE ratio of 12.2x for 2025, reflecting ongoing uncertainties in consumer recovery [2]

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of HKD 6.58 [1][2][9] Core Views - The company's main brand experienced low single-digit growth in Q2 2025, while the Saucony brand showed strong growth potential [6][8] - The company is focusing on accelerating its direct-to-consumer (DTC) strategy for its main brand and expanding the Saucony product matrix, which is expected to create a second growth curve [6][9] Financial Performance Summary - Revenue projections for the company are as follows: - 2024: RMB 13,577 million - 2025E: RMB 14,486 million (growth of 6.69%) - 2026E: RMB 15,789 million (growth of 9.00%) - 2027E: RMB 17,385 million (growth of 10.10%) [5] - Net profit attributable to the parent company is projected to be: - 2024: RMB 1,238 million - 2025E: RMB 1,372 million (growth of 10.82%) - 2026E: RMB 1,530 million (growth of 11.52%) - 2027E: RMB 1,711 million (growth of 11.81%) [5] - The company’s EPS is expected to increase from RMB 0.45 in 2025 to RMB 0.61 in 2027 [5] Operational Insights - In Q2 2025, the main brand's overall channel revenue showed low single-digit year-on-year growth, while the Saucony brand's revenue grew over 20% year-on-year [6][8] - The main brand's running category continues to be a significant growth driver, with expectations of double-digit growth in the first half of the year [7] - The company anticipates a healthy inventory turnover ratio of 4-4.5 months, maintaining a stable operational rhythm [7] Market Positioning - The Saucony brand is expected to achieve 30%-40% revenue growth for the year, driven by channel optimization and product upgrades [8] - The company is focusing on high-end brand positioning and expanding its product offerings to include lifestyle and leisure products [8]

Core Viewpoint - Company reported low single-digit growth in retail sales for the second quarter ending June 30, 2025, with a decline in offline channels and a significant increase in e-commerce sales [1][2][3] Retail Performance - As of June 30, 2025, retail sales points (excluding Li Ning YOUNG) totaled 6,099, a net increase of 11 from the previous quarter but a net decrease of 18 year-to-date, with retail business down by 19 and wholesale business up by 1 [1] - E-commerce virtual store business recorded a mid-single-digit growth, while offline channels saw a low single-digit decline [1][2] Sales and Discounts - The overall sales revenue for Li Ning in the second quarter showed low single-digit growth, with e-commerce performing better than offline sales [3] - Retail discounts increased, leading to pressure on margins, but the inventory-to-sales ratio improved to a four-month high [3][4] Marketing Strategy - Marketing efforts are focused on two main themes: NBA (with player Yang Hansheng) and the Olympics, with a significant increase in marketing expenses expected in the second half of the year [2][3] - The company aims to leverage the NBA and Olympic themes to enhance brand visibility and drive sales growth [3][4] Financial Outlook - The company maintains its profit forecast, expecting net profits of 2.51 billion, 2.83 billion, and 3.04 billion yuan for 2025-2027, reflecting year-on-year changes of -16.8%, +12.8%, and +7.6% respectively [2][4] - Target price is set between 17.9 and 19.2 HKD, corresponding to a 2025 PE ratio of 17.2-18.5x, with a rating of "outperform" [2][4]

Company Overview - The major shareholder, Everbright, announced an increase in its stake in Li Ning Company by acquiring 18.09 million shares for a total of HKD 275 million at an average price of HKD 15.20 per share [1] Business Performance - Li Ning's basketball business is under pressure, with retail sales expected to decline by 21% in 2024, accounting for 21% of the company's overall sales [1] - Despite the challenges, Li Ning continues to sponsor various basketball leagues and is focused on launching new products and technologies to maintain brand positioning [1] - The company signed a player who was selected 16th in the 2025 NBA Draft, marking the third Chinese player to be a first-round pick, which is expected to enhance brand visibility in the basketball sector [1] Strategic Initiatives - In the second quarter of 2025, Li Ning's brand is still facing pressure from a volatile market environment and intense competition, particularly in retail and discounting [2] - The company aims to innovate in core categories like running and basketball while increasing exposure and investment in sports like badminton and table tennis [2] - A contract with the Chinese Olympic Committee was completed at the end of April, which is anticipated to lead to more marketing events in the second half of 2025 [2] Shareholder Confidence - The major shareholder's increase in stake from January to June 2025 reflects confidence in Li Ning's "single brand, multiple categories, and multi-channel" core strategy [2] Financial Forecast - The earnings per share (EPS) forecast for 2025 and 2026 remains unchanged at CNY 0.92 and CNY 1.07, respectively, with the current stock price corresponding to 16 and 14 times the projected earnings for those years [2] - The target price is maintained at HKD 20.82, indicating a potential upside of 28% from the current stock price [2]

Core Viewpoint - Decathlon is undergoing a painful transformation period, considering selling a 30% stake in its Chinese business, valued at a minimum of $1 billion, amid challenges in its high-end market strategy and management instability [2][3]. Financial Performance - Decathlon's revenue from 2021 to 2023 was €138 billion, €154 billion, and €156 billion, with year-on-year growth rates of 21.3%, 11.7%, and 1.15% respectively. Net profits were €9.13 billion, €9.23 billion, and €9.31 billion, indicating a significant slowdown in revenue growth and stagnation in profits [3]. - For 2024, Decathlon reported a revenue increase of 5.2% to €162 billion ($175 billion), surpassing the 2023 growth rate of 4.4%. However, net profit fell to €7.87 billion, the lowest in four years, marking the first time it dropped below €9 billion [5]. Management Changes - In March 2022, Decathlon appointed Barbara Martin Coppola as global CEO to drive digital transformation and high-end market strategy. However, she was replaced by Javier López in March 2025, marking the shortest tenure among the last three CEOs [3][5][6]. Strategic Initiatives - Decathlon has shifted its store strategy, opening smaller flagship stores in major cities like Beijing and Shanghai, focusing on specialized and refined products, and introducing sports experience zones [4]. - The company has increased brand marketing efforts, sponsoring major events and teams to enhance its brand image, such as providing custom uniforms for 45,000 volunteers during the Paris Olympics [4]. Challenges in High-End Market - Despite efforts to penetrate the high-end market, Decathlon faces challenges with brand perception, as consumers still associate it with low-cost products. This perception complicates the acceptance of higher-priced items [6][7]. - The competitive landscape is intensifying, with Decathlon facing strong rivals in various high-end segments, which adds pressure to its business model [7]. - The company's dual focus on high-end stores and maintaining its traditional customer base may lead to resource dilution and brand confusion [7]. Potential Solutions - Selling a stake in the Chinese business could provide Decathlon with necessary capital and local insights to alleviate financial pressures and enhance its market strategy [7].