20231027-招银国际-李宁-02331.HK-Value_is_distressed_but_end_demand_is_key_9页_1mb

报告摘要

CMB International Global Markets | Equity Research | Company Update | 27 Oct 2023

Analyst Recommendation: Maintain BUY rating due to distressed valuation (14x FY24E P/E), despite caution on end-demand. Target price cut to HK$32.93 (37.5% downside from current price).
Valuation Overview: Current P/E 14x (FY24E estimate), target price HK$32.93. Valuation is considered cheap relative to 5-year average P/E of 28x.
Key Concerns: Concerned about declining brand popularity, high retail discounts for inventory clearance, weak macro environment, and sluggish sales growth. 3Q23 retail sales growth fell to MSD, missing estimates.
Management Actions: Adjusted down FY23E sales guidance to below 10% growth (from mid-teens) and cut NP margin expectation. Launched de-stocking initiatives, including aggressive discounts and inventory reduction.
Earnings Projections: Revised FY23E/24E/25E net profit forecasts down by 11%/19%/18% due to lower trade fair orders, higher discounts, and slow sales. Expected sales growth of 10% for FY24E, 9% NP growth.
Inventory Position: Inventory-to-sales ratio surged to 5 months in 3Q23, attributing to weak demand; blended retail discounts similar to prior year but offline channels still weak.
Other Highlights: Compared peer stocks like Anta Sports and Xtep Intl; financial metrics show declining OP margin from 22.8% to 15.8%; net debt-to-equity at 0.4x. FLIPSY