UBS raises Li Ning's target price to 20.5 yuan, short-term sales still under pressure, rating "Neutral"

UBS published a research report stating that Li Ning (02331.HK) achieved net profit in the first half of the year in line with expectations, and management maintains its guidance for flat year-on-year revenue and high single-digit growth in net profit margin for the full year. Based on recent sales pressure and marketing expenses, the expected compound annual growth rate of earnings per share from 2025 to 2027 is 16%.

The bank raised its earnings per share forecast for Li Ning by 1% for next year while maintaining a conservative stance. However, leading up to the 2028 Olympics, brand investment is expected to boost sales, raising the company's net profit forecast for 2027 to 2028 by 12% to 24%, with the target price increased from HKD 15.7 to HKD 20.5, maintaining a "Neutral" rating