2Q Preview: Retail Sales Likely to Fall

Research evidence excerpt

2Q Preview: Retail Sales Likely to Fall

Deutsche Bank

Research

Rating Company Date

Hold Li Ning 6 July 2026

Forecast Change

Asia

China

Reuters Bloomberg Exchange Ticker Price at 3 Jul 2026 (HKD) 15.30

2331.HK 2331 HK HSI 2331

Price target - 12mth (HKD) 18.50

Consumer

ADR ISIN 52-week range (HKD) 23.00 - 14.72

Textiles, Apparel & Luxury

LNNGY US52989T1025 HANG SENG INDEX 23,055

Goods

Valuation & Risks

Sammi Xu

Li Ning 2Q26 preview: retail sales growth likely to turn negative Research Analyst

Li Ning will release its 2Q26 operational update after market close on Jul 15th. We +852-2203-5415

forecast 2Q26 Li Ning retail sales to decline by a low-single-digit YoY, compared

to mid-single-digit growth in 1Q26, suggesting elevated sales pressure and a Key changes

slower-than-expected consumption recovery trend. The slower sales in 2Q26 is TP 20.10 to 18.50 ↓ -8.0%

broadly in line with softer China consumption trends and further affected by 31,352 to

Sales (FYE) ↓ -1.0%

unfavorable weather. Discounts have also widened in recent months to support 31,040

sales amid weak consumer spending. Thus, we think the latest 2Q26 sales trend Op prof margin

11.7 to 11.6 ↓ -0.7%

appears to be below both management’s earlier guidance and prior market (FYE)

expectations of a strong sales turnaround. 2,925.3 to

Net profit (FYE) ↓ -4.8%

2,784.6

DB model update: FY26 net profit 9% below consensus Source: Deutsche Bank

Li Ning previously guided for high-single-digit revenue growth, but we think the Price/price relative

sales target may come under pressure given the weak consumption backdrop. 30

Reflecting our updated 2Q26 retail sales assumptions, we now forecast 3%

revenue growth in 1H26 and slightly lower our 2026 revenue growth forecast to 20

4.9% YoY.

Jul '24 Jan '25 Jul '25 Jan '26 Jul '26