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<Research>CCBI Cuts LI NING (02331.HK) TP to $13.9, Weak 1H Earnings Expected
Recommend 14 Positive 6 Negative 10 |
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CCBI has released a report expecting that LI NING (02331.HK)'s 1H results will be dragged down by weak sales, with a 2% growth in its 1H revenue, but a 11% YoY decline in its net profit, due to the company's 2Q sales weakened by soft consumption in China, unfavorable weather in June, and competition. CCBI predicted the company's 2Q retail sell-through to grow by a low-single-digit YoY, keeping with the pace of growth in 1Q. Same-store sales are likely to remain negative. The broker's assumptions implied that LI NING may lose more market share than its major peers in 2Q24. The broker expected the company's 1H GPM to rise 0.2 ppts to 49%, while OPM will fall 2.4 ppts to 15.2%. CCBI lowered its FY24 and FY25 earnings forecasts for LI NING by 5% each, reflecting lower-than-expected sales in 2Q and more prudent margin assumptions. Concurrently, it reduced its FY24F P/E target multiple to 10x from 12x to reflect the company's slower earnings growth. The broker cut the TP of the company to $13.9 from $18 and maintained a Neutral rating on it. AAStocks Financial News |
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