Citigroup raises Li Ning's target price to 20.6 yuan and lowers earnings forecasts for the next two years

Citi released a research report stating that it has updated its model for Li Ning (02331.HK) to reflect expectations for its outlook from 2026 to 2027. Although the revenue and net profit forecasts for Li Ning this year remain unchanged, it has adjusted its sales forecasts for the next two years by 4% and 3%, respectively, as it expects Li Ning's revenue to gradually recover in 2026 (rather than rapidly rebound in the first half of 2026); and it has lowered Li Ning's net profit forecasts for the next two years by 6% and 5%, respectively.

Based on the above profit adjustments, Citi expects Li Ning's revenue to grow by 0%, 4%, and 8% year-on-year from 2025 to 2027, with net profit growing by 18%, 11%, and 17%, respectively.

Citi also extended Li Ning's valuation benchmark to the 2026 price-to-earnings ratio, raising the target price from HKD 18.1 to HKD 20.6, based on a forecasted 17 times price-to-earnings ratio for 2026; maintaining a "Buy" rating