LI NING(02331) 东方证券·2024-08-19 06:03Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 22.83 based on a 17x valuation for 2024 [4][8]. Core Insights - The company reported a revenue of CNY 14.35 billion for the first half of 2024, a year-on-year increase of 2.3%, while the net profit attributable to shareholders was CNY 1.95 billion, a decline of 8% year-on-year [1]. - The retail sales showed a slight decline, with the e-commerce channel performing well, while the distribution channel managed shipment pace due to the overall consumption environment [1]. - Gross margin improved by 1.7 percentage points to 50.4%, attributed to better discount management on new products and an increase in the proportion of revenue from direct-to-consumer channels [1]. - Operating cash flow was strong, with net cash inflow from operating activities reaching CNY 2.73 billion, a 40.6% increase year-on-year [1]. - The company is focusing on stable growth and profitability quality in the face of a challenging retail environment, with expectations for low single-digit revenue growth for the year [1]. Financial Summary - Revenue projections for 2024-2026 are CNY 28.57 billion, CNY 31.33 billion, and CNY 34.44 billion, respectively, with year-on-year growth rates of 3.5%, 9.7%, and 9.9% [3]. - Earnings per share (EPS) estimates for 2024, 2025, and 2026 are CNY 1.24, CNY 1.47, and CNY 1.69, respectively [2][3]. - The net profit margin is projected to be around 11.2% for 2024, improving to 12.2% and 12.7% in the following years [3].