SEHK:2331

Stock Analysis Report

Executive Summary

Li Ning Company Limited engages in the research and development, design, manufacture, marketing, distribution, and retail of sporting goods in the People’s Republic of China.

Snowflake

Fundamentals

Flawless balance sheet with high growth potential.


Similar Companies

Share Price & News

How has Li Ning's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

10.0%

2331

3.1%

HK Luxury

2.2%

HK Market


1 Year Return

285.2%

2331

21.8%

HK Luxury

-1.3%

HK Market

Return vs Industry: 2331 exceeded the Hong Kong Luxury industry which returned 21.8% over the past year.

Return vs Market: 2331 exceeded the Hong Kong Market which returned -1.3% over the past year.


Share holder returns

2331IndustryMarket
7 Day10.0%3.1%2.2%
30 Day15.7%1.1%-2.9%
90 Day30.7%6.6%-5.8%
1 Year287.9%285.2%26.1%21.8%2.3%-1.3%
3 Year387.5%384.1%44.7%27.4%15.6%3.9%
5 Year550.8%546.3%41.9%14.3%20.1%0.06%

Price Volatility Vs. Market

How volatile is Li Ning's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Li Ning undervalued based on future cash flows and its price relative to the stock market?

45.39x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Undervalued: 2331 (HK$25.85) is trading above our estimate of fair value (HK$22.47)

Significantly Undervalued: 2331 is trading above our estimate of fair value.


Price Based on Earnings

PE vs Industry: 2331 is poor value based on its PE Ratio (45.4x) compared to the Luxury industry average (9.5x).

PE vs Market: 2331 is poor value based on its PE Ratio (45.4x) compared to the Hong Kong market (10.3x).


Price Based on Expected Growth

Low PEG Ratio: 2331 is poor value based on its PEG Ratio (2.3x)


Price Based on Value of Assets

PB vs Industry: 2331 is overvalued based on its PB Ratio (8.3x) compared to the HK Luxury industry average (0.9x).


Next Steps

Future Growth

How is Li Ning expected to perform in the next 1 to 3 years based on estimates from 24 analysts?

20.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: 2331's forecast earnings growth (20% per year) is above the savings rate (2%).

Earnings vs Market: 2331's earnings (20% per year) are forecast to grow faster than the Hong Kong market (11.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 2331's revenue (15.3% per year) is forecast to grow faster than the Hong Kong market (10.1% per year).

High Growth Revenue: 2331's revenue (15.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: 2331's Return on Equity is forecast to be high in 3 years time (25.9%)


Next Steps

Past Performance

How has Li Ning performed over the past 5 years?

72.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 2331 has become profitable over the past 5 years, growing earnings by 72% per year.

Accelerating Growth: 2331's earnings growth over the past year (108.8%) exceeds its 5-year average (72% per year).

Earnings vs Industry: 2331 earnings growth over the past year (108.8%) exceeded the Luxury industry -4.9%.


Return on Equity

High ROE: 2331's Return on Equity (19.2%) is considered low.


Return on Assets

ROA vs Industry: 2331 has a higher Return on Assets than the Luxury industry average last year.


Return on Capital Employed

ROCE Improving: 2331 has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Li Ning's financial position?


Financial Position Analysis

Short Term Liabilities: 2331's short term assets (CN¥7.4B) exceeds its short term liabilities (CN¥3.8B)

Long Term Liabilities: 2331's short term assets (7.4B) exceeds its long term liabilities (593.1M)


Debt to Equity History and Analysis

Debt Level: 2331 is debt free.

Reducing Debt: 2331 has no debt compared to 5 years ago when its debt to equity ratio was 48.9%.

Debt Coverage: 2331 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 2331 has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 2331 has a high level of physical assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if 2331's debt is covered by short term assets.


Next Steps

Dividend

What is Li Ning's current dividend yield, its reliability and sustainability?

1.07%

Expected Dividend Yield


Dividend Yield vs Market

company0.4%marketbottom25%2.3%markettop25%6.3%industryaverage6.2%forecastin3Years1.1%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: 2331's dividend (0.38%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.25%).

High Dividend: 2331's dividend (0.38%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.35%).

Stable Dividend: 2331 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are stable.

Growing Dividend: 2331 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: 2331 is not paying a notable dividend for .


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 2331's dividend in 3 years as they are not forecast to pay a notable one for the Hong Kong market.


Next Steps

Management

What is the CEO of Li Ning's salary, the management and board of directors tenure and is there insider trading?

3.3yrs

Average management tenure


CEO

Li Ning (56yo)

0.08yrs

Tenure

CN¥24,238,000

Compensation

Mr. Li Ning serves as joint Chief Executive Officer of Li Ning Company Limited from September 2, 2019. He is the Founder of Li Ning Company Limited and serves as its Executive Chairman and Head of Business ...


CEO Compensation Analysis

Compensation vs. Market: Li has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the Hong Kong market.

Compensation vs Earnings: Li's compensation has increased by more than 20% in the past year.


Management Age and Tenure

3.3yrs

Average Tenure

52yo

Average Age

Experienced Management: 2331's management team is considered experienced (3.3 years average tenure).


Board Age and Tenure

11.3yrs

Average Tenure

61yo

Average Age

Experienced Board: 2331's board of directors are seasoned and experienced ( 11.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

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Li Ning
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Role
Co-Chief Executive Officer
Founder
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Ownership Breakdown


Management Team

  • Li Ning (56yo)

    Founder

    • Tenure: 0.08yrs
    • Compensation: CN¥24.24m
  • Kar Tai

    Company Secretary

    • Tenure: 6.4yrs
  • Terence Tsang (57yo)

    Chief Financial Officer

    • Tenure: 6.5yrs
  • Qilin Li (32yo)

    Executive Director

    • Tenure: 1.8yrs
    • Compensation: CN¥2.23m
  • Takeshi Kosaka (48yo)

    Joint CEO & Executive Director

    • Tenure: 0.08yrs

Board Members

  • Louis Koo (63yo)

    Independent Non-Executive Director

    • Tenure: 15.3yrs
    • Compensation: CN¥270.00k
  • Ya Wang (63yo)

    Independent Non Executive Director

    • Tenure: 15.3yrs
    • Compensation: CN¥270.00k
  • Li Ning (56yo)

    Founder

    • Tenure: 0.08yrs
    • Compensation: CN¥24.24m
  • Bunny Chan (61yo)

    Independent Non Executive Director

    • Tenure: 15.3yrs
    • Compensation: CN¥250.00k
  • Samuel Su (66yo)

    Independent Non-Executive Director

    • Tenure: 7.3yrs
    • Compensation: CN¥270.00k
  • Qilin Li (32yo)

    Executive Director

    • Tenure: 1.8yrs
    • Compensation: CN¥2.23m
  • Takeshi Kosaka (48yo)

    Joint CEO & Executive Director

    • Tenure: 0.08yrs

Company Information

Li Ning Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Li Ning Company Limited
  • Ticker: 2331
  • Exchange: SEHK
  • Founded: 2004
  • Industry: Apparel, Accessories and Luxury Goods
  • Sector: Consumer Durables
  • Market Cap: HK$59.077b
  • Shares outstanding: 2.31b
  • Website: https://www.lining.com

Number of Employees


Location

  • Li Ning Company Limited
  • Opto-Mechatronics Industrial Park
  • No. 8 Xing Guang 5th Street
  • Beijing
  • 101111
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LNLBDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2004
2331SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJun 2004
LNNG.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 2004
2331SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJun 2004
2331SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJun 2004
LNNG.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDOct 2008

Biography

Li Ning Company Limited engages in the research and development, design, manufacture, marketing, distribution, and retail of sporting goods in the People’s Republic of China. The company offers sporting go ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 12:31
End of Day Share Price2019/10/14 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

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