Jingu Finance News | Soochow Securities reported that Li Ning (02331) 24Q3 business data showed that Li Ning (excluding Young) retail sales across all channels saw a year-on-year decline in the middle single digits, with offline/e-commerce channel sales respectively experiencing a decrease in the high single digits/growth in the middle single digits year-on-year. Offline channels saw company-operated/wholesale declines in the middle single digits/high single digits year-on-year, respectively.
The bank pointed out that based on the improving sales trend since October, the company maintains a low single-digit year-on-year revenue growth guidance for the full year. 2) Profit margin: The deepening discounts in the second half of the year have affected the gross margin, combined with a 1.6 percentage point year-on-year increase in gross margin in the first half of the year, the full-year gross margin is expected to improve year-on-year. The company continues to drive cost reduction and efficiency improvement, expecting the full-year advertising and promotional expense ratio to be controlled within 10%, company-operated store closures driving rental and labor savings, while with the improvement of management efficiency and operational efficiency, the full-year net income margin is expected to maintain a low double-digit level.
The bank stated that in 24Q3, affected by the weakening macro consumption environment, the company faced pressure on sales, increased inventory pressure, and deepened discounts. Based on the improving sales trend month-on-month since October, the bank expects sales in Q4 to improve month-on-month, and inventory pressure to ease. The company has established a joint venture to develop international business, with a 29% stake, the current international business volume is small, and the financial impact on the company is minimal. Maintaining forecasted net income attributable to the parent company for 24-26 at 3.13/3.56/3.91 billion yuan, corresponding to PEs of 12/11/10X, maintaining a "buy" rating.
