Li Ning Company (2331) H1 2024 earnings summary

Executive summary

• Revenue increased by 2.3% year-over-year to RMB 14.345 billion for the six months ended 30 June 2024, with gross profit margin rising 1.6 percentage points to 50.4%.

• Net profit attributable to equity holders was RMB 1.952 billion, down 8% year-over-year, with a net profit margin of 13.6%.

• EBITDA margin was 24.0%, and net operating cash inflow increased by 40.6% to RMB 2.73 billion.

• Interim dividend of RMB 37.75 cents per share declared, representing a 50% payout ratio.

• Retail and offline sell-through was low single-digit, with new product sell-through at mid single-digit; inventory turnover and aging structure remained healthy.

Financial highlights

• Gross profit reached RMB 7.236 billion, up 5.8% year-over-year; operating profit declined 3% to RMB 2.402 billion.

• Basic EPS was RMB 75.8 cents, down 6% year-over-year; profit attributable to equity holders fell 8% year-over-year.

• Operating profit margin was 16.7% (down 1.0 percentage point year-over-year); EBITDA margin at 24.0%.

• Cash and cash equivalents stood at RMB 6.147 billion as of 30 June 2024; net cash position at RMB 17.581 billion.

• No outstanding borrowings; debt-to-equity ratio at 37.2%; banking facilities of RMB 8.74 billion available.

Outlook and guidance

• Full-year revenue growth target adjusted to low single digit due to cautious market outlook.

• Focus remains on core strategy: "Single Brand, Multi-categories, Diversified Channels," with emphasis on product innovation and expansion in women’s, outdoor, youth, and overseas markets.

• Expense planning and control to be more rigorous in the second half; expects stable and enduring growth by leveraging innovation and operational efficiency.