Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The data in this insight is collated from the "shareholding disclosure" link on the HKEx website</li>
<li>Often there is a corresponding HKEx announcement on the increase - or decrease - in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.</li>
<li>The key stocks mentioned in this regular insight is <strong><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></strong> and <strong><a href="https://www.smartkarma.com/entities/meitu-inc" target="_blank" data-smartkarma-citation="entities:23573:1" rel="noopener">Meitu Inc (1357 HK)</a></strong>.</li>
</ul>


The data in this insight is collated from the "shareholding disclosure" link on the HKEx website
Often there is a corresponding HKEx announcement on the increase - or decrease - in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
The key stocks mentioned in this regular insight is Li Ning (2331 HK) and Meitu Inc (1357 HK).


HK CEO & Director Dealings (29 Dec 2023): Li Ning, Meitu

Analyst

Steve Zhou, CFA

Equity Bottom-Up

<ul>
<li>
<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> announced yesterday that the company has acquired a HK office project, the Harbour East, from Henderson Land, for a total consideration of HKD2.2bn. </li>
<li>The acquisition is quite unexpected given that Li Ning has had a clean corporate governance track record.</li>
<li>The company now trades at 11x foward PE, assuming no growth in 2023 and 2024 earnings.  It is now a value stock, though the visibility is very low. </li>
</ul>



Li Ning (2331 HK) announced yesterday that the company has acquired a HK office project, the Harbour East, from Henderson Land, for a total consideration of HKD2.2bn. 
The acquisition is quite unexpected given that Li Ning has had a clean corporate governance track record.
The company now trades at 11x foward PE, assuming no growth in 2023 and 2024 earnings.  It is now a value stock, though the visibility is very low. 


Li Ning (2331 HK):  Buying A HKD2.2bn Office Building - Now A Corporate Governance Discount?

<ul>
<li>
<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> is trading down 18% today due to a bad 3Q23 operational date. </li>
<li>Retail sales grew by only mid-single-digit yoy, while same-store-sales recorded a mid-single-digit decline yoy. </li>
<li>Given the operational update, FY23 earnings should be revised down, to likely flat or low-single-digit growth.</li>
</ul>



Li Ning (2331 HK) is trading down 18% today due to a bad 3Q23 operational date. 
Retail sales grew by only mid-single-digit yoy, while same-store-sales recorded a mid-single-digit decline yoy. 
Given the operational update, FY23 earnings should be revised down, to likely flat or low-single-digit growth.


Li Ning (2331 HK):  Bearish Thesis Playing Out

<ul>
<li>Since my bearish insight on August 11 (<a href="https://www.smartkarma.com/insights/li-ning-2331-hk-low-quality-earnings-beat" target="_blank" data-smartkarma-citation="insights:110159" rel="noopener">Li Ning (2331 HK):  Low Quality Earnings Beat</a>), Li Ning's share price has declined by 27% in less than 2 months.</li>
<li>Anta's share price on the other hand has been flat during the same time frame (<a href="https://www.smartkarma.com/insights/anta-sports-2020-hk-most-resilient-in-industry-down-cycles" target="_blank" data-smartkarma-citation="insights:111097" rel="noopener">Anta Sports (2020 HK):  Most Resilient In Industry Down-Cycles</a>).</li>
<li>In this insight, we look at if there are now any positive catalysts on the name, given the steep share price decline.</li>
</ul>


Since my bearish insight on August 11 (Li Ning (2331 HK):  Low Quality Earnings Beat), Li Ning's share price has declined by 27% in less than 2 months.
Anta's share price on the other hand has been flat during the same time frame (Anta Sports (2020 HK):  Most Resilient In Industry Down-Cycles).
In this insight, we look at if there are now any positive catalysts on the name, given the steep share price decline.


Li Ning (2331 HK):  No Positive Catalysts In Sight

<ul>
<li>
<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> reported today a headline beat on 1H23 results, with sales up 13% yoy and net profit down 3% yoy.</li>
<li>Both numbers are around 5% better than the already low market expectations. </li>
<li>However, a closer look at the results shows that the quality of the beat is low. </li>
</ul>



Li Ning (2331 HK) reported today a headline beat on 1H23 results, with sales up 13% yoy and net profit down 3% yoy.
Both numbers are around 5% better than the already low market expectations. 
However, a closer look at the results shows that the quality of the beat is low. 


Li Ning (2331 HK):  Low Quality Earnings Beat

China

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

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Li Ning (2331 HK)

HK CEO & Director Dealings (29 Dec 2023): Li Ning, Meitu

The data in this insight is collated from the "shareholding disclosure" link on the HKEx website. These insights also flag those companies where...

David Blennerhassett

Li Ning (2331 HK): Buying A HKD2.2bn Office Building - Now A Corporate Governance Discount?

Li Ning has made an unexpected acquisition of a HK office project for HKD2.2bn, raising questions about its corporate governance. The company now...

Steve Zhou, CFA

Li Ning (2331 HK): Bearish Thesis Playing Out

Li Ning (2331 HK) stock dropped 18% after disappointing 3Q23 operational results, with retail sales growing only mid-single-digit YoY and same...

Steve Zhou, CFA

Li Ning (2331 HK): No Positive Catalysts In Sight

The share price of Li Ning has declined by 27% in less than 2 months, while Anta's share price has remained flat. We look at if there are any...

Steve Zhou, CFA

Li Ning (2331 HK): Low Quality Earnings Beat

Li Ning reported 1H23 results with a head-line beat on both sales and net profit, though a closer look indicates a low-quality beat.

Steve Zhou, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HK CEO & Director Dealings (29 Dec 2023): Li Ning, Meitu

The data in this insight is collated from the "shareholding disclosure" link on the HKEx website. These insights also flag those companies where...

David Blennerhassett

Li Ning (2331 HK): Buying A HKD2.2bn Office Building - Now A Corporate Governance Discount?

Li Ning has made an unexpected acquisition of a HK office project for HKD2.2bn, raising questions about its corporate governance. The company now...

Steve Zhou, CFA

Li Ning (2331 HK): Bearish Thesis Playing Out

​Li Ning (2331 HK) stock dropped 18% after disappointing 3Q23 operational results, with retail sales growing only mid-single-digit YoY and same...

Steve Zhou, CFA

Li Ning (2331 HK): No Positive Catalysts In Sight

​The share price of Li Ning has declined by 27% in less than 2 months, while Anta's share price has remained flat. We look at if there are any...

Steve Zhou, CFA

Li Ning (2331 HK): Low Quality Earnings Beat

Li Ning reported 1H23 results with a head-line beat on both sales and net profit, though a closer look indicates a low-quality beat.

Steve Zhou, CFA

Li Ning (2331 HK) stock dropped 18% after disappointing 3Q23 operational results, with retail sales growing only mid-single-digit YoY and same...

The share price of Li Ning has declined by 27% in less than 2 months, while Anta's share price has remained flat. We look at if there are any...