A disappointing second quarter: Li Ning‘s weakened 2Q26 sales momentum creates uncertainty over full-year target achievement

Research evidence excerpt

A disappointing second quarter: Li Ning‘s weakened 2Q26 sales momentum creates uncertainty over full-year target achievement

Global Markets Research

Li Ning 2331.HK 2331 HK 15 July 2026

EQUITY: CONSUMER RELATED

A disappointing second quarter RatingRemains Neutral

Li Ning's weakened 2Q26 sales momentum creates Target price

Reduced from HKD 16.00uncertainty over full-year target achievement HKD 23.40

Closing price

2Q26 sales lost momentum meaningfully 15 July 2026 HKD 15.12

Li Ning reported its 2Q26 operating data (15 July): quarterly retail sales (excluding LI-NING

YOUNG) declined by low-single-digit% (LSD%) y-y, with the offline and online channels registering Implied upside +5.8%

LSD% and mid-single-digit% (MSD%) y-y sales declines, respectively; including sales of LI-NING

YOUNG, the company reported largely flat y-y sales growth for 2Q26. Meanwhile, the company Market Cap (USD mn) 5,085.2

offered deeper discounts (of MSD and LSD percentage points y-y across its offline and online ADT (USD mn) 46.7

channels, respectively) in the past quarter. While we believe Li Ning's loss of sales momentum in

2Q26 has already been priced into its weak share price performance over the past two months Relative performance chart

(partially driven by unfavorable weather conditions impacting sportswear sector sales), the

company's actual 2Q26 operating dataset still appears disappointing to us, as it offers limited signs

of stabilization/improvement, in our view. While the company retains its full-year sales and margin

targets, we believe the likelihood of Li Ning missing its FY26 sales target has increased following its

lackluster 2Q26 sales performance. We thus reduce our full-year sales/earnings estimates by

3%/5% and cut target price to HKD16.0 (from HKD23.4). Maintain Neutral.