Jin Wu Financial News | According to the Nomura Research Report, Li Ning (02331)'s operating data for the first quarter of 2024 showed that sales were in line with expectations, but same-store sales growth (SSSG) data was disappointing. The bank believes that the total retail sales volume of the Li Ning brand (excluding children's clothing) increased by a lower number of units compared to the same period compared to the same period, which is basically in line with market expectations. Same-store sales (SSS) saw a mid-single digit drop year over year, which is a bit disappointing.
According to the bank, Li Ning's retail and wholesale channel same-store sales recorded lower single-digit and mid-double-digit declines, respectively, over the same period last year. Meanwhile, as of the first quarter, the inventory sales ratio level was slightly better than the same period last year. There was also a single-digit year-on-year improvement in discount levels during the period. Nomura believes that after the low base effect becomes apparent, Li Ning's sales in the second half of the year may gradually regain some momentum.
The bank lowered the company's target price by 8.4% from HK$33.2 to HK$30.4, giving it a “buy” rating.