Daiwa raised the target price of LI NING to 20 yuan and upgraded the rating to "Hold."

Daiwa published a research report stating that Li Ning (02331.HK) had a net profit margin slightly better than the bank's expectations in the first half of the year, and concerns about the management's downward guidance did not materialize. The bank also observed stable early signs in Li Ning's core brand; however, due to the uncertainty of the group's continued profitability, it only upgraded Li Ning's rating from "underperform" to "hold," raising the target price from HKD 14 to HKD 20, and increasing the earnings per share estimates for 2025 to 2027 by 10% to 13%.

The bank stated that Li Ning still reaffirms its guidance for a high single-digit percentage net profit margin for the full year. However, due to a slowdown in retail momentum in July and August, coupled with a persistently weak macro environment, the company's management remains cautious about the second half of the year