Introduction to this report:
The “2024 Li Ning Science and Technology Show” debuted three industry-leading innovations (Superstar 3, Dragon Sparrow, and Rainproof Dual Permeable Nanotechnology); 2024 is a sports year, and we look forward to the launch of new products and the implementation of marketing initiatives to drive the company's turnover growth.
Summary:
Investment advice: The company has scarce professional sports genes and is industry-leading in product strength. Considering that 2024 is a major sports year, and the company has released multiple technology platforms and new products, the annual sales performance is worth looking forward to. We maintain the 2024-2026 net profit forecast of 33.8/37.5/4.14 billion yuan. The PE corresponding to the current stock price is 15/13/12X, respectively, giving it an “increase in wealth” rating.
Event: On May 29, the company held the 2024 Science and Technology Show with the theme of “In My Name, Science and Technology Li Ning” to reveal six unique innovative technologies in depth, and unveiled the three industry-leading innovations (Superstar 3, Dragon Sparrow, and Rainproof Double Permeable Nanotechnology).
The new product Stunning Picture 3. Dragon Finch has been fully upgraded to create an unprecedented experience, and sales performance is worth looking forward to. 1) Amazing Picture 3: Expected to be released soon. The three major upgrades create a more resilient, labor-saving, and more stable running experience, namely: ① Super Carbon: The double-layer carbon plate has been greatly lengthened, and the surface layer of the lower carbon plate has been upgraded to a polymer material, which increases the toughness of the carbon plate by 48%; ② Super Sole: The hollow structure of the midsole has been greatly improved, and energy storage increased by 96%; ③ Super Bomb: Li Ning? + The double-layer carbon plate creates a super structure, and the rebound performance is increased by 38%. 2) Dragon Sparrow: Positioned as high-end, it is the lightest marathon racing shoe in the industry (size 8.5 weighs less than 89g). It incorporates the structural characteristics of sprinters into the design of marathon shoes, has a new structure, and uses a new super? Technology (As an ultra-lightweight midsole material technology, the density can exceed 0.07g/m? , compared to? Technology density reduced by 30-50%).
2024 is a big year of sports, and we look forward to new product sales and implementation of marketing initiatives to drive revenue growth. The Paris Olympics are about to open in July. Starting in Q2, the company will launch Olympic sales and release new products one after another.
1) Product side: Gamma Generation will go on sale on April 13, Yu Shuai Ultra will go on sale on April 27, and Wade's Way 11 will go on sale on May 18. The market feedback is positive, and we look forward to future new product sales. 2) Marketing side: Under the leadership of the new CMO Mr. Wang, the company has made many efforts to integrate marketing resources, plan and build a brand, and sort out brand personnel. H2 will use the Olympics to carry out a series of themed activities.
Considering the base figure (2023Q2/3/4 turnover growth in double/medium single/low double), the new pace of store opening and product sales, it is expected that H2 turnover and the same store growth rate will be superior to H1.
Risk warning: New product sales fall short of expectations; industry competition intensifies; terminal consumption falls short of expectations, etc.