Guangfa Securities: Maintain Li Ning(02331) "Buy" rating with a fair value of HKD 24.84

Crypto Finance APP learns that GF Securities has issued a research report stating that Li Ning (02331) is expected to have attributable net profits of 2.593 billion, 2.851 billion, and 3.100 billion yuan in 2025-2027, respectively, representing YOY changes of -13.9%, +10.0%, and +8.7%; EPS are estimated at 1.00, 1.10, and 1.20 yuan per share. Based on comparable company valuations and considering the company’s positive changes in channels, marketing, and products since 2025, the company’s brand potential and performance are expected to continue improving. A 20x PE multiple is applied for 2026, with an exchange rate of CNY/HKD 10.8879, resulting in a fair value of HKD 24.84 per share. The “Buy” rating is maintained.

GF Securities’ main points are as follows:

Insisting on a leading domestic sportswear brand with a single brand and multiple categories

Li Ning was founded in 1990 by the gymnastics legend Li Ning and listed in 2004. It is a leading sports brand in China. The company adopts a development strategy of “single brand, multiple categories, multiple channels,” focusing on six core categories: running, basketball, comprehensive training, badminton, table tennis, and sports leisure, creating “Li Ning-style experience value” around product experience, sports experience, and purchase experience. According to financial reports, in 2024, the company achieved revenue/net profit of 28.676 billion/3.013 billion yuan, with core brand stores/children’s stores totaling 6,117/1,468 stores. By channel, the revenue share from distributors/own stores/franchise/other regions is 45.1%/24.0%/29.0%/1.9%; by category, footwear/clothing/equipment and accessories account for 49.9%/42.0%/8.1%.

The company leverages Olympic marketing to continuously innovate in products and channels, with potential for sustained brand momentum and performance growth

On the product side, through four major technological platforms, the company continuously enhances its professional technological attributes, creating IP blockbuster products and improving the product matrix in core categories. On the channel side, it actively explores new formats, launching outdoor stores and flagship stores, with promising growth potential for category stores. In marketing, the company adheres to a strategy of single brand, multiple categories, and multiple channels, increasing marketing investment through top-tier event sponsorships, celebrity endorsements, and Olympic marketing, which is expected to continuously enhance brand strength.