Credit Suisse lowers the target price for LI NING to 48 yuan, expecting collaboration with the Chinese Olympic Committee to become a growth driver in the coming years

Credit Suisse released a research report indicating that Li Ning (02331.HK) has managed its initial sponsorship expenses for the Chinese Olympic Committee better than expected. Some investors had anticipated that related additional operating expenses this year would reach RMB 600 million to 700 million, believing that cooperation with the Chinese Olympic Committee could become an important growth driver for the group from 2025 to 2028.

Credit Suisse emphasized that the partnership with the Chinese Olympic Committee will bring substantial revenue and profit opportunities to Li Ning, helping to reconstruct the Li Ning brand's product portfolio. The firm also noted that Li Ning has been continuously increasing its dividend and repurchase scale in recent years, expecting breakthroughs in free cash flow and shareholder returns after the transformation. They maintained a "Buy" rating, but due to increased discounting since June, which may put pressure on gross margins, they have lowered their revenue forecasts for this and next year by 2% and 3%, respectively, and reduced their earnings per share forecasts by 7% and 6%. The target price has been lowered from 50 yuan to 48 yuan. Rating: "Buy."