Lining: Q4 Fundamentals Still Have Growth Resilience And Continue To Enjoy High Quality Racetrack Bonus.

In November 22nd, we organized a telephone conference with Li Ning Co to communicate with the company on the recent business situation, important business changes and the medium and long term strategic direction.

Guoxin point of view: in general, we believe that 1) we expect that the company's terminal sales will be good in the fourth quarter, and once again verify the strong growth of revenue, while the profitability will continue to improve and promote the rapid growth of performance. 2) the new joint chief executive has profound professional experience and Chinese background, has the ability to lead the company to a new level in the key retail operation and supply chain capabilities; 3) the company insists on professionalism, and will continue to develop high-quality products in the near future with the leading domestic functional technology, and vigorously invest in professional sports resources to continuously create a clear campaign brand image. In the long run, we believe that through the accumulation of the effects of business transformation and upgrading, we believe that not only has we achieved a comprehensive recovery in the past one or two years, but also we have gained a strong ability of continuous growth, and the upgrading of the two aspects of product functionality and fashion is in line with the internationally fully verified professional oriented development path, and also meets the needs of young consumers. Stronger retail operation capacity and flexible supply chain construction will continue to promote the improvement of business efficiency. On the whole, the company as a local leader in the field of sports shoes and clothing is expected to continue to enjoy dividends and realize the rise of domestic industry in the condition of high track level, good competition and basically stable conditions.

Maintain the company's 19-21 year EPS to 0.64/0.79/1.05 yuan / share (RMB), the current share price corresponds to PE36/29/22 times, and maintain the "buy" rating.