Li Ning (HKG:2331) jumps 7.5% this week, though earnings growth is still tracking behind five-year shareholder returns

Simply Wall St.01-26

The last three months have been tough on Li Ning Company Limited (HKG:2331) shareholders, who have seen the share price decline a rather worrying 31%. On the bright side the returns have been quite...

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On the bright side the returns have been quite...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/consumer-durables/hkg-2331/li-ning-shares/news/li-ning-hkg2331-jumps-75-this-week-though-earnings-growth-is\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Li Ning (HKG:2331) jumps 7.5% this week, though earnings growth is still tracking behind five-year shareholder returns</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nLi Ning (HKG:2331) jumps 7.5% this week, though earnings growth is still tracking behind five-year shareholder returns\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-01-26 07:43 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/hk/consumer-durables/hkg-2331/li-ning-shares/news/li-ning-hkg2331-jumps-75-this-week-though-earnings-growth-is><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The last three months have been tough on Li Ning Company Limited (HKG:2331) shareholders, who have seen the share price decline a rather worrying 31%.    On the bright side the returns have been quite...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/consumer-durables/hkg-2331/li-ning-shares/news/li-ning-hkg2331-jumps-75-this-week-though-earnings-growth-is\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"02331","symbol_name":"李宁","start_time":0,"source_url":"https://simplywall.st/stocks/hk/consumer-durables/hkg-2331/li-ning-shares/news/li-ning-hkg2331-jumps-75-this-week-though-earnings-growth-is","article_id":"2406705372","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/4131000-choice2-main-header/1585186733037"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2406705372","pubTimestamp":1706226191,"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"The last three months have been tough on Li Ning Company Limited ( HKG:2331 ) shareholders, who have seen the share...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"02331":"李宁"},"translate_title":"李宁（HKG：2331）本周股价上涨7.5%，尽管盈利增长仍落后于五年股东回报","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"02331":1},"content_text":"The last three months have been tough on Li Ning Company Limited (HKG:2331) shareholders, who have seen the share price decline a rather worrying 31%.    On the bright side the returns have been quite good over the last half decade.  Its return of 79% has certainly bested the market return!    Unfortunately not all shareholders will have held it for the long term, so spare a thought for those caught in the 78% decline over the last twelve months.      The past week has proven to be lucrative for Li Ning investors, so let's see if fundamentals drove the company's five-year performance.   See our latest analysis for Li Ning   There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance.  One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.   Over half a decade, Li Ning managed to grow its earnings per share at 44% a year.   This EPS growth is higher than the 12% average annual increase in the share price.  So one could conclude that the broader market has become more cautious towards the stock.   This cautious sentiment is reflected in its (fairly low) P/E ratio of 10.23.    The image below shows how EPS has tracked over time (if you click on the image you can see greater detail). SEHK:2331 Earnings Per Share Growth January 25th 2024 It is of course excellent to see how Li Ning has grown profits over the years, but the future is more important for shareholders.  You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.  What About Dividends? When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs.  Arguably, the TSR gives a more comprehensive picture of the return generated by a stock.  In the case of Li Ning, it has a TSR of 88% for the last 5 years. That exceeds its share price return that we previously mentioned.  This is largely a result of its dividend payments!  A Different Perspective We regret to report that Li Ning shareholders are down 78% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 19%.  However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity.     On the bright side, long term shareholders have made money, with a gain of 13% per year over half a decade.  It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend.        While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important.   Consider for instance, the ever-present spectre of investment risk.   We've identified 2 warning signs  with Li Ning , and understanding them should be part of your investment process.    We will like Li Ning better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong exchanges.Valuation is complex, but we're helping make it simple.Find out whether Li Ning is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2406705372"}