SEHK:2331

Stock Analysis Report

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Market Cap

HK$226.6b

Last Updated

2021/07/22 15:48 UTC

Data Sources

Company Financials +

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. More Details


Snowflake Analysis

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

Stable Share Price: 2331 is not significantly more volatile than the rest of Hong Kong stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: 2331's weekly volatility (7%) has been stable over the past year.


Market Performance


7 Day Return

-3.4%

2331

-2.6%

HK Luxury

-1.2%

HK Market


1 Year Return

258.4%

2331

121.4%

HK Luxury

14.4%

HK Market

Return vs Industry: 2331 exceeded the Hong Kong Luxury industry which returned 119% over the past year.

Return vs Market: 2331 exceeded the Hong Kong Market which returned 10% over the past year.


Shareholder returns

2331IndustryMarket
7 Day-3.4%-2.6%-1.2%
30 Day10.3%-3.4%-4.3%
90 Day44.2%17.0%-6.4%
1 Year259.6%258.4%124.4%121.4%18.5%14.4%
3 Year921.7%904.4%113.3%97.7%10.0%-2.2%
5 Year2,145.8%2,107.7%234.6%182.5%45.8%20.0%

Long-Term 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 compared to its fair value and its price relative to the market?

109.86x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 2331 (HK$91.4) is trading above our estimate of fair value (HK$62.8)

Significantly Below Fair Value: 2331 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 2331 is poor value based on its PE Ratio (109.9x) compared to the Hong Kong Luxury industry average (12.1x).

PE vs Market: 2331 is poor value based on its PE Ratio (109.9x) compared to the Hong Kong market (10.8x).


Price to Earnings Growth Ratio

PEG Ratio: 2331 is poor value based on its PEG Ratio (4x)


Price to Book Ratio

PB vs Industry: 2331 is overvalued based on its PB Ratio (21.7x) compared to the HK Luxury industry average (0.8x).


Future Growth

How is Li Ning forecast to perform in the next 1 to 3 years based on estimates from 31 analysts?

27.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2331's forecast earnings growth (27.5% per year) is above the savings rate (1.5%).

Earnings vs Market: 2331's earnings (27.5% per year) are forecast to grow faster than the Hong Kong market (18.9% per year).

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

Revenue vs Market: 2331's revenue (18.1% per year) is forecast to grow faster than the Hong Kong market (12.7% per year).

High Growth Revenue: 2331's revenue (18.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 2331's Return on Equity is forecast to be high in 3 years time (29.7%)


Past Performance

How has Li Ning performed over the past 5 years?

47.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2331 has high quality earnings.

Growing Profit Margin: 2331's current net profit margins (11.7%) are higher than last year (10.8%).


Past Earnings Growth Analysis

Earnings Trend: 2331 has become profitable over the past 5 years, growing earnings by 47.1% per year.

Accelerating Growth: 2331's earnings growth over the past year (13.3%) is below its 5-year average (47.1% per year).

Earnings vs Industry: 2331 earnings growth over the past year (13.3%) exceeded the Luxury industry -23.9%.


Return on Equity

High ROE: 2331's Return on Equity (19.5%) is considered low.


Financial Health

How is Li Ning's financial position?


Financial Position Analysis

Short Term Liabilities: 2331's short term assets (CN¥9.8B) exceed its short term liabilities (CN¥5.0B).

Long Term Liabilities: 2331's short term assets (CN¥9.8B) exceed its long term liabilities (CN¥889.4M).


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 37.5%.

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


Dividend

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

0.27%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 2331's dividend (0.27%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.01%).

High Dividend: 2331's dividend (0.27%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.33%).


Stability and Growth of Payments

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 the Hong Kong market.


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

How experienced are the management team and are they aligned to shareholders interests?

3.1yrs

Average management tenure


CEO

Ning Li (58 yo)

1.83yrs

Tenure

CN¥49,625,000

Compensation

Mr. Ning Li serves as Joint Chief Executive Officer of Li Ning Company Limited since September 02, 2019. Mr. Li serves as Chairman of the Board at Trinity Acquisition Corp. He is the Founder of Li Ning Com...


CEO Compensation Analysis

Compensation vs Market: Ning's total compensation ($USD7.67M) is above average for companies of similar size in the Hong Kong market ($USD1.04M).

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


Leadership Team

Experienced Management: 2331's management team is considered experienced (3.1 years average tenure).


Board Members

Experienced Board: 2331's board of directors are seasoned and experienced ( 17.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: 2331 insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

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: 1990
  • Industry: Apparel, Accessories and Luxury Goods
  • Sector: Consumer Durables
  • Market Cap: HK$226.650b
  • Shares outstanding: 2.48b
  • 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


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 Analysis2021/07/22 15:48
End of Day Share Price2021/07/22 00:00
Earnings2020/12/31
Annual Earnings2020/12/31


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.