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> 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

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>1H23 result was a slight miss, but the inventory level, retail sales growth and FY23E guidance update were all better than expected.</li><li>Given the weakened demand, risks of higher retail discounts, potential operating deleverage, we had revied down our forecasts.</li><li>However, since current valuation is not demanding and some negatives were kind of priced in already, we are still rating it BUY.</li></ul><p><em>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.</em></p>

1H23 result was a slight miss, but the inventory level, retail sales growth and FY23E guidance update were all better than expected.Given the weakened demand, risks of higher retail discounts, potential operating deleverage, we had revied down our forecasts.However, since current valuation is not demanding and some negatives were kind of priced in already, we are still rating it BUY.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) – Reiterated Guidance but We Remained Cautious

<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

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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/giant-biogene-holding-co-ltd" target="_blank" data-smartkarma-citation="entities:35950:1" rel="noopener">Giant Biogene (2367 HK)</a> aims to raise up to US$205m via a top-up placement.</li>
<li>We have followed the company since listing and its recent performance has been great. Although it doesn’t seem to need the cash.</li>
<li>In this note, we will run the deal through our ECM framework and talk about the recent updates.</li>
</ul>



Giant Biogene (2367 HK) aims to raise up to US$205m via a top-up placement.
We have followed the company since listing and its recent performance has been great. Although it doesn’t seem to need the cash.
In this note, we will run the deal through our ECM framework and talk about the recent updates.


Giant Biogene Placement - Has Been Doing Well but Doesn’t Need the Cash

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): 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) – Reiterated Guidance but We Remained Cautious

1H23 result was a slight miss, but the inventory level, retail sales growth and FY23E guidance update were all better than expected.

CMB International

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

Giant Biogene Placement - Has Been Doing Well but Doesn’t Need the Cash

Giant Biogene (2367 HK) aims to raise up to US$205m via a top-up placement. In this note, we talk about the deal dynamics and run the deal through...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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) – Reiterated Guidance but We Remained Cautious

1H23 result was a slight miss, but the inventory level, retail sales growth and FY23E guidance update were all better than expected.

CMB International

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

Giant Biogene Placement - Has Been Doing Well but Doesn’t Need the Cash

Giant Biogene (2367 HK) aims to raise up to US$205m via a top-up placement. In this note, we talk about the deal dynamics and run the deal through...

Sumeet Singh

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...