Investment summary
Li Ning announced the company’s interim results as of June 30, 2021. During the period,
revenue increased by 65% Yoy to CNY 10.20 billion, overall GPM increased by 6.4 ppts to
55.9%, and net profit attributable to the parent recorded CNY 1.96 billion, a Yoy increase 187%,
mainly due to the company’s increased operating leverage, OPM increased by 10.4 ppts to
24.9%. The overall performance is better than the profit alert announcement. The company’s
operating performance continues to improve, and the cash cycle is further shortened by 17
days to 13 days.
OPM improved significantly, and profit in 1H was better than expected
From the perspective of retail sell-through growth, the company’s overall sell-through
(including online and offline) in 1H recorded a low-nineties growth, while offline channels
recorded a high-eighties growth. The company’s direct operating sell-through recorded an
88.5% growth, and the wholesale channel sell-through recorded a high-eighties. By category,
the company’s core category retail sell-through increased by 92% in total. Among the core
categories, sports fashion/running/basketball category sell-through increased by
116%/87%/80% Yoy respectively. During the period, the company’s revenue recorded CNY
10.20 billion, a Yoy increase of 65%, mainly due to the recovery of demand after the epidemic
and the Xinjiang cotton incident to stimulate sales growth. Net profit increased by 187% Yoy
to CNY 1.962 billion, mainly due to the company’s significant Yoy increase in OPM by 10.4ppts
to 24.9%; under operating leverage, NPM increased by 8.1 ppts to 19.2%.