The recent trend of Hong Kong stocks has been volatile at the 17200 level. Some sectors have performed well, while some stocks are brewing an upward trend. Li Ning (02331.HK) is one of them. Li Ning announced its full-year results for 2023 last week. Revenue increased 7.0% from last year to 27.6 billion yuan, which is basically in line with the growth rate of total retail sales of consumer goods. Operating cash flow was strong, rising 19.8% year-on-year to RMB 4.688 billion, demonstrating the company’s strong ability to resist risks. Despite the intensified competitive environment, gross profit margin remained flat year-on-year and overall performance was relatively stable.
Although short-term profits are under pressure, we can see that Li Ning has a clear strategy for long-term development. Li Ning has adhered to the direction of “single brand, multi-category, multi-channel” for many years, focusing on core categories such as running, basketball, badminton, fitness and sports life. These five core categories all recorded positive growth in omni-channel sales last year, running smoothly throughout the year. The sales growth rate is 40%, and the fitness growth rate is 25%. At the single brand level, Li Ning’s large-volume omni-channel sales growth rate in 2023 is better than the main brand of Anta (2020.HK), and has not underperformed its opponents.
In order to build the brand in the long term, Li Ning also focuses on product research and development. Li Ning has increased its R&D investment year after year, and the growth rate of R&D expenses is higher than the growth rate of revenue. According to statistics, in the past ten years, Li Ning’s single-brand R&D investment totaled more than 3 billion. R&D investment has achieved remarkable results, and Li-Ning’s professional products continue to help athletes achieve excellent performance on the field. In 2023, Li Ning’s Feidian series has helped elite athletes at home and abroad achieve a total of 103 championships and 194 stage appearances. In February 2024, “Feidian 3 Ultra” helped athletes finish the Seville Marathon with a time of 2:03:47, setting a record for the fastest marathon speed in Chinese running shoes. Li Ning’s latest “carbon core” system has also received international professional recognition. This technology breaks the conventional shoe midsole design and introduces an innovative “full palm” and balanced plate integrated molding process. This progress not only improves shock absorption and rebound It also enhances the propulsion during exercise and greatly improves the actual performance on the field. It won the German iF Design Award at the beginning of this year.
Li-Ning also continues to expand brand recognition and influence through strategic layout of top professional sports. Since the 2012-2013 season, Li-Ning has worked hand in hand with the CBA for 12 seasons and has become the equipment of choice for more than 1,160 professional players. At the same time, Li-Ning continues to cooperate with well-known NBA stars such as Dwyane Wade, Jimmy Butler, and CJ McCollum to consolidate the strength and image of professional sports.
It is believed that through long-term investment and construction of products and brands, Li Ning will usher in high-quality growth in the medium to long term. In terms of trend, Li Ning’s stock price has been supported by buying orders at a low level and is expected to gradually rebound. Investors may wish to buy at low prices.
2024-03-25 00:16:14
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