Analyst

Steve

Equity Bottom-Up

<ul>
<li>According to public news today afternoon during trading hours, the founder and biggest shareholder of <a href="https://www.smartkarma.com/entities/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning (2331 HK)</a>, Mr. Li Ning, is mulling privatizing the public company. </li>
<li>Mr. Li Ning has shown the opposite intention over the last few years, with several major sell-down of stake.</li>
<li>The company is trading at 16x 2024 PE, with visibility being quite low.  </li>
</ul>


According to public news today afternoon during trading hours, the founder and biggest shareholder of Li Ning (2331 HK), Mr. Li Ning, is mulling privatizing the public company. 
Mr. Li Ning has shown the opposite intention over the last few years, with several major sell-down of stake.
The company is trading at 16x 2024 PE, with visibility being quite low.  


Li Ning (2331 HK):  Update On The Name Given Potential Privatization News

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>In the short run, we are still quite cautious about Li Ning in 2H24E, because of: 1) risks of greater retail discounts or promotion, 2) risks of trade fair orders adjustments, 3) unfavorable channel mix and operating deleverage and 4) relatively fixed opex.</li><li>However, from the long run prospective, we can still see the value in Li Ning, esp. when we consider its ex-cash FY24E P/E, which is only at 5-6x (excluding the net cash of RMB 17.6bn, in fact, we can also adjust for its RMB2.0-3.0bn worth of property investment in HK &amp; SH).</li><li>Maintain BUY but trim our TP to HK$ 16.18, based on 12x FY24E P/E (cut from 15x, to factor in the industry de-rating). It is trading at 10x FY24E P/E.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

In the short run, we are still quite cautious about Li Ning in 2H24E, because of: 1) risks of greater retail discounts or promotion, 2) risks of trade fair orders adjustments, 3) unfavorable channel mix and operating deleverage and 4) relatively fixed opex.However, from the long run prospective, we can still see the value in Li Ning, esp. when we consider its ex-cash FY24E P/E, which is only at 5-6x (excluding the net cash of RMB 17.6bn, in fact, we can also adjust for its RMB2.0-3.0bn worth of property investment in HK &amp; SH).Maintain BUY but trim our TP to HK$ 16.18, based on 12x FY24E P/E (cut from 15x, to factor in the industry de-rating). It is trading at 10x FY24E P/E.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Li Ning (2331 HK) - We See Long-Term Value but Short-Term Risks

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>Giant Biogene was listed in Hong Kong IPO in 2022. It has done well since and is now trading 45% above its IPO price, but its still cheap.</li>
<li>GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.</li>
<li>In this note, we will talk about the company’s past performance and future prospects.</li>
</ul>


Giant Biogene was listed in Hong Kong IPO in 2022. It has done well since and is now trading 45% above its IPO price, but its still cheap.
GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
In this note, we will talk about the company’s past performance and future prospects.


2024 High Conviction - Giant Biogene - Growth Rate Keeps Moving Higher

<ul><li>Li Ning may not be our top pick in the sportswear sector.</li><li>But thanks to potential sequential acceleration in sales growth and decent margin improvement (better discounts and operating leverage), we are still positive on Li Ning and maintain BUY with TP of HK$ 22.17, based on 15x FY24E P/E.</li><li>The 2024 outlook is constructive, as we see some upsides on sales growth and margins.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Li Ning may not be our top pick in the sportswear sector.But thanks to potential sequential acceleration in sales growth and decent margin improvement (better discounts and operating leverage), we are still positive on Li Ning and maintain BUY with TP of HK$ 22.17, based on 15x FY24E P/E.The 2024 outlook is constructive, as we see some upsides on sales growth and margins.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Li Ning (2331 HK) - Healthy Outlook After a Beat in Retail Discounts

<ul><li>We do find Li Ning’s FY23 results and FY24E guidance are inline, even though the views from the market are quite mixed.</li><li>Anyhow, we do appreciate management’s efforts to fix the bugsell and the branding power issues, as well as resetting investors’ expectation with a prudent guidance.</li><li>With all the progress mentioned below, we believe Li Ning could improve overtime and turn around. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We do find Li Ning’s FY23 results and FY24E guidance are inline, even though the views from the market are quite mixed.Anyhow, we do appreciate management’s efforts to fix the bugsell and the branding power issues, as well as resetting investors’ expectation with a prudent guidance.With all the progress mentioned below, we believe Li Ning could improve overtime and turn around. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Li Ning (2331 HK) - Expectations Reset with Positive Initiatives

China

Li Ning Company Limited researches, designs, manufactures, distributes, and retails sports footwear, apparel and accessories for sport and leisure use.

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Li Ning (2331 HK)

Li Ning (2331 HK): Update On The Name Given Potential Privatization News

Share price on a downward momentum, likely due to bearish feedback from certain distributors on recent trends. I believe the company's target of...

Steve

Li Ning (2331 HK) - We See Long-Term Value but Short-Term Risks

Maintain BUY but trim our TP to HK$ 16.18, based on 12x FY24E P/E (cut from 15x, to factor in the industry de-rating). It is trading at 10x FY24E P/E.

CMB International

2024 High Conviction - Giant Biogene - Growth Rate Keeps Moving Higher

Giant Biogene was listed in Hong Kong IPO in 2022. It has done well since and is now trading 45% above its IPO price, but its still cheap.

Sumeet Singh

Li Ning (2331 HK) - Healthy Outlook After a Beat in Retail Discounts

We also see some room for margin improvements, because the retail discounts is healthily improving (esp. in direct retail and e-commerce segment)

CMB International

Li Ning (2331 HK) - Expectations Reset with Positive Initiatives

We do find Li Ning’s FY23 results and FY24E guidance are inline, even though the views from the market are quite mixed. Anyhow, we do appreciate...

CMB International

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