Guotai Junan Securities: LI NING still faces pressure from marketing expenses in the short term, but operational efficiency is improving. Maintains "Outperform" rating

Guosen Securities research report states that Li Ning still faces pressure from marketing expenses in the short term, but operational efficiency is improving. It anticipates that mid-term sales growth will accelerate, driving a faster recovery in profitability. In the first half of 2025, the company achieved robust performance in a challenging operating environment, especially with good profit performance after excluding non-operating impacts. In the second half of the year, cooperation with the Chinese Olympic Committee and other resource investments will incur additional short-term costs, but will gradually transform into sales driving force in the future. We maintain our profit forecast, expecting the company's net profit attributable to the parent from 2025 to 2027 to be 2.51/2.83/3.04 billion yuan, with year-on-year changes of -16.6%/12.5%/7.7%. We are optimistic about the company's current healthy operational foundation and the potential for future marketing efforts to accelerate brand growth, raising the reasonable valuation to HKD 21.1-22.3, corresponding to a 2026 PE of 18-19x, and maintaining an "outperform the market" rating