Li Ning (2331): Industry softness weighed pressures in 2Q; long-term recovery trend intact; maintain OW

Research evidence excerpt

Li Ning (2331): Industry softness weighed pressures in 2Q; long-term recovery trend intact; maintain OW

Asia Pacific Equity Research

10 July 2026

Overweight

Li Ning (2331) 2331.HK, 2331 HK

Price (10 Jul 26): HK$14.67

Industry softness weighed pressures in 2Q; long-

▼ Price Target (Dec-26): HK$23.00

term recovery trend intact; maintain OW Prior (Dec-26): HK$25.60

We witnessed weaker retail sales in 2Q in both the overall retail market China

(Apr/May +0.2%/-0.6%, vs 1Q +2.4% per NBS) and sportswear (our Consumer

recent discussion with a China sportswear expert suggested the internal AC Qian Yao

completion rate at 80-85% in 2Q, vs 106% in Jan-Feb in the expert’s (86-21) 6106 6277

region). Li Ning was not immune (retail sales down MSD, vs solid qian.q.yao@jpmorgan.com

growth in 1Q, in the expert’s region; although this was partially due to SAC Registration Number: S1730521050001

a high base in 2Q25, per the expert). We cut our 26-28E earnings Carson Fan

estimates for Li Ning by 8-10% to factor in the sluggish retail (86-21) 6106-6294

rong.fan@jpmorgan.com

environment. However, we think Li Ning’s long-term recovery trend SAC Registration Number: S1730522070002

remains intact. The partnership with Curry (see report) should benefit J.P. Morgan Securities (China) Company Limited

Li Ning’s brand equity, product offerings and overseas expansion, in

our view. Our revised DCF-based Dec-26 PT of HK$23 implies a 12- Key Changes (FYE Dec)

month forward P/E of 17x. Maintain OW. Prev Cur Δ

Adj. EPS - 26E (Rmb) 1.22 1.09 -10.3%

• Pressures on 2Q amid sluggish retail environment. Our discussion Adj. EPS - 27E (Rmb) 1.34 1.21 -9.8%

with a China sportswear expert (a distributor in Eastern China) on 2 Style Exposure

July suggested Li Ning’s retail sales weakened in 2Q (down MSD, vs