Li Ning rises over 50%, Daiwa: Brand popularity is rapidly increasing

LI NING (02331.HK) is currently trading at HKD 19.26, up 5.3%, with a turnover of 22.8912 million shares, involving HKD 436 million.

Daiwa's report indicates that although LI NING's stock price has outperformed its peers since its recent low (up 5.1%, compared to Anta (02020.HK) down 6.7% and the Hang Seng Index down 2.1%), the firm observes that there are still widespread doubts in the market regarding its operational turnaround, mainly due to concerns about its sales performance remaining weak in the third and fourth quarters of 2025. However, the firm has noted several signs of a significant rebound in brand popularity over the past few weeks, which has strengthened Daiwa's confidence in the brand achieving a turnaround in 2026. The buy rating on LI NING is reiterated, with a target price maintained at HKD 24. After raising marketing expenditure estimates, the firm has lowered its earnings per share forecasts for LI NING for 2025 to 2027 by 1% to 2%, to HKD 1.031, HKD 1.201, and HKD 1.362, respectively. LI NING remains the firm's top pick in the sports brand sector.

Since late November, Daiwa believes that LI NING's brand popularity has significantly increased due to intensive new product launches and increased brand exposure. The firm believes LI NING benefited from spontaneous media attention on November 21, when global basketball star Stephen Curry wore LI NING's new JB4 basketball shoes just a week after ending his contract with Under Armour (UA). Notably, this is the first time Curry has worn non-UA shoes in a game in 13 years. According to Moojing data, the decline in e-commerce sales of LI NING basketball shoes has significantly narrowed since the third quarter of 2025.

On November 27, LI NING launched the next generation of two core running shoe series (Rouge Rabbit 9 and Feidian 6) at the Shanghai Sports Expo. LI NING sells over 10 million pairs annually from its three core running shoe series (including Super Light). The firm has noticed a significant increase in followers on LI NING's official Xiaohongshu account a few days after the new product launch.

On November 26, LI NING officially took over as the official sponsor of the Chinese national fencing team from Kappa. On November 29, LI NING opened its first independent outdoor equipment store in Beijing (named "Counterflow"), aligning with Daiwa's previous upgrade report speculations. The firm believes that progress in the outdoor category could become an upside risk source for market consensus expectations.

On December 11, LI NING launched the Yushuai 20 series (worn by NBA Portland Trail Blazers player Yang Hansen). On December 14, after becoming the official sponsor of the Chinese Olympic Committee (COC), LI NING officially launched a new Olympic product series "Glory Gold" and opened a new store in Beijing themed "Dragon's Glory." Daiwa believes that LI NING's collaboration with the Chinese Olympic Committee will play a key role in enhancing brand appeal