Li Ning (2331.HK): Expect investor pessimism to abate; Open a ST positive view

Research evidence excerpt

Li Ning (2331.HK): Expect investor pessimism to abate; Open a ST positive view

Li Ning (2331.HK)

14 July 2026 Citi Research

Open a short-term positive view on Li Ning — Since Citi’s preview on Li Ning’s 2Q retail sales on July 1 (see note: Li Ning -

2Q26 retail sales preview; sequentially more challenges for 26E topline guidance), we have observed market’s substantially

lowered expectation on Li Ning’s 2H26E outlook (incl a possible cut of mgmt’s 26E topline guidance), per our investor

communication. On the positive side, we have seen investors’ recent sector rotation to seek value in China consumer

discretionary space (incl YUMC). We expect incrementally positive sentiments on China sportswear stocks (whose share

prices have largely reflected weakened China retail environment since June), esp after the government’s approval of new pro-

consumption policy (see Citi’s July 13 note: China Consumer - Implication of newly approved “15th Five-Year Plan to Boost

Consumption” ). Li Ning is among Citi’s preferred 10 big-cap China consumer stocks with attractive valuation (see detailed

discussion in Citi’s July 2 sector note). We also see neutral to positive implications from Nike's 4QFY26 narratives on Li Ning

(see Citi's July 1 note: China Sportswear - Nike's 4QFY26 narratives: Positive for Topsports, neutral to positive for Anta and Li

Ning). Lastly, with a manageable GPM and a YoY rise in A&P/sales ratio, we expect mgmt to maintain its 26E full-year NPM

guidance at HSD (with a wide range of 6.5–9.4%, in our understanding). Fundamentally, we continue to relatively prefer Anta

(Buy) to Li Ning (Buy) in China sportswear sector (see Citi’s Jun 22 note: China Sportswear: Takeaways from Citi Consumer

Corp Day; Updated sector pecking order).