LI NING(2331.HK)1Q24:STILL HEALING FROM WOUNDS
LI NING(2331.HK)1Q24:STILL HEALING FROM WOUNDS
Li Ning's 1Q24 retail sell-through was up by low-single digit YoY, largely in line with market expectations. The figures were relatively weaker than its peers, reflecting pressure from both weak retail market and its internal reforms. We reiterate our view that it could take some time for Li Ning to fix its own issues, such as its control on wholesalers and product offerings. While we expect Li Ning's retail sales should turn better in subsequent quarters, we do not expect the turning point to be around the corner. Maintain HOLD.
李寧24年第一季度的零售銷售額同比增長了較低的個位數，基本符合市場預期。這些數字相對弱於同行，這反映了疲軟的零售市場及其內部改革的壓力。我們重申我們的觀點，即李寧可能需要一些時間來解決自己的問題，例如對批發商和產品供應的控制。儘管我們預計李寧的零售銷售將在接下來的幾個季度中好轉，但我們預計轉折點不會到來。保持 HOLD。
Key Factors for Rating
評級的關鍵因素
1Q24 retail sales not so strong but has been expected. 1Q24 retail sell- through was up by low-S.D. as offline sales were facing headwinds due to the high base in 1Q23 after China reopened. By channel, sell-through of direct retail (+ve mid S.D.) performed better than wholesale (-ve mid S.D.). However, it was driven by directly-operated outlets. Excluding these, the performance of direct retail was similar to wholesale, reflecting LN is still in the process of clearing inventory. On the bright side, e-commerce achieved a low-20s growth in 1Q24, as some customer traffic returned to online.
24年第一季度零售銷售不那麼強勁，但出乎意料。由於中國重新開放後23年第一季度基數較高，線下銷售面臨阻力，24年第一季度零售銷售額下降了低點。按渠道劃分，直接零售（+ve mid S.D.）的銷售表現要好於批發（-ve mid S.D.）。但是，它是由直營商店推動的。不包括這些，直接零售的表現與批發類似，反映出LN仍在清算庫存中。好的一面是，隨着一些客戶流量恢復到線上，電子商務在24年第一季度實現了20年代的低增長。
Improvement in operating metrics but still a long way to fix. LN's 1Q24 retail discount has seen some YoY improvement, reaching 30-35% off (1Q23: c.35% off), while channel inventory-to-sales ratio is around 4x. However, such discount level is still steeper than major peers, reflecting the needs to keep discount low for smooth sell-through.
運營指標有所改善，但仍有很長的路要走。LN的24年第一季度的零售折扣同比有所改善，達到30-35％的折扣（23年第一季度：約35％的折扣），而渠道庫存與銷售的比率約爲4倍。但是，這樣的折扣水平仍然比主要同行高，這反映出需要將折扣保持在較低水平以實現順利銷售。
Still staying cautious on full year outlook. While mgt. expected 2H24 may turn better in terms of YoY growth (due to a low base), they reiterated that they still target full year revenue to be up mid S.D., with low-teens NPM. We believe this is unlikely a lowball guidance, as weak 1Q24 operating data reflects that LN is facing headwinds, and its own internal issues are not yet fully fixed. For example, its direct retail still faces pressure, and LN expects there would be more closure of directly-operated stores in 2024. Hence, we believe it could take months for LN to settle its legacy issues, and the company would prefer to stay prudent in 2024 before positioning itself for faster growth.
對全年前景仍保持謹慎態度。儘管管理層預計下半年同比增長可能會好轉（由於基數較低），但他們重申，他們的目標仍然是全年收入在南達州中期增長，NPM保持在低水平。我們認爲這不太可能是低調的指導，因爲疲軟的24年第一季度運營數據反映了LN面臨不利因素，其自身的內部問題尚未完全解決。例如，其直營零售仍然面臨壓力，LN預計2024年將有更多直營門店關閉。因此，我們認爲，LN可能需要幾個月的時間才能解決其遺留問題，在爲更快的增長做好準備之前，該公司更願意在2024年保持謹慎。
Valuation
估價
Maintain HOLD as we believe the weak fundamentals of Li Ning could take time to improve, and this could weigh on the potential of its re-rating.
維持持有，因爲我們認爲李寧疲軟的基本面可能需要一段時間才能改善，這可能會打壓其重新評級的可能性。
We revise down our TP of HK$20.90, based on 15x 2024E P/E (previous: 16x). We believe Li Ning may trade at a lower multiple after the release of weak 1Q24 figures which reflect deteriorating same-store sales and a large gap with its major peers.
根據2024年市盈率的15倍（先前爲16倍），我們將目標股價下調了20.90港元。我們認爲，在公佈疲軟的24年第一季度數據後，李寧的交易倍數可能會降低，這反映了同店銷售的惡化以及與主要同行的巨大差距。
譯文內容由第三人軟體翻譯。