Jin Wu Financial News | According to the CITIC Construction Investment Research Report, Li Ning (02331)'s revenue growth slowed in 2023, mainly due to slow recovery in passenger flow, increased e-commerce competition, and the company's control of franchisee shipments in the second half of the year under channel trading; due to the increase in sales expenses mentioned by impairment measures, net profit returned to mother was under pressure in '23. The running and fitness categories performed well with improved product strength and continuous improvement of the matrix, while the basketball category was weak; at the end of '23, there were 7,668 stores/ +0.9%. Channel inventory turnover fell to 3.6 months at the end of '23.
Looking ahead, it is expected that 24Q1 is still in a slow recovery stage. The company will continue to strengthen the advantages of the running category, increase the development of new categories such as outdoor, and enhance coverage of the declining market. 24H2 is expected to grow at an accelerated pace under a low base.
The bank estimates that in 2024-2026, the company's revenue will be 292.2, 317.7, and 34.68 billion yuan, up 5.9%, 8.7%, and 9.2% year on year; achieving net profit of 34.2, 38.1, and 4.21 billion yuan, up 7.4%, 11.3%, and 10.5% year on year; corresponding to the latest valuation P/E will be 14.7x, 13.2x, and 12.0x, maintaining a “buy” rating.