Li Ning (2331): Retail headwinds in 2Q, in-line; sustained investments for long-term growth; maintain OW

Research evidence excerpt

Li Ning (2331): Retail headwinds in 2Q, in-line; sustained investments for long-term growth; maintain OW

Asia Pacific Equity Research

16 July 2026

Overweight

Li Ning (2331) 2331.HK, 2331 HK

Price (15 Jul 26): HK$15.12

Retail headwinds in 2Q, in-line; sustained

investments for long-term growth; maintain OW Price Target (Dec-26): HK$23.00

Li Ning reported 2Q operational updates with retail sell-through facing China

headwinds (down LSD if excl. kids and flat incl. kids), in-line with our Consumer

expectations (see report). This was mainly due to weaker-than-expected AC Qian Yao

traffic amid a lukewarm retail environment and unfavorable weather. (86-21) 6106 6277

Inventory level remained robust at c.4 months (vs. c.5 months as of 1Q) qian.q.yao@jpmorgan.com

with a healthy inventory age profile, despite deepened discounts SAC Registration Number: S1730521050001

(offline/online by MSD/LSD; overall at mid-30s off). Despite Carson Fan

headwinds lingering in early July, management maintained its full (86-21) 6106-6294

rong.fan@jpmorgan.com

year guidance (sales +HSD, HSD NPM), given multiple catalysts to SAC Registration Number: S1730522070002

boost the retail trend in 2H (such as the launch of the new cushioned J.P. Morgan Securities (China) Company Limited

running shoe collection, the debut of the Loong store and the Asian

Games-related campaigns) and initiatives to uphold margins (such as Style Exposure

supply-chain optimization, closing underperforming stores, efficiency

enhancement, etc.). Meanwhile, management reaffirmed its

commitment to long-term strategic investments, including R&D (such

as the newly launched BOOM Arc technology) and brand equity (such

as the partnership with Curry and sponsorship of elite athletes and top-

tier sports events).