Li Ning Co Ltd

02331: XHKG (HKG)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	HK$21.00	Fbvnkz	Pbtfdbtns

Li Ning: Valuation Cut by 7%; Shares Attractive as Market Has Discounted Worst-Case Scenario

Ivan Su

Jul 9, 2024

We lower Li Ning’s fair value estimate to HKD 35.00 from HKD 37.50 as the Chinese sportswear market is showing more signs of polarization in spending. Consequently, we reduced our 2024-26 earnings forecasts by 5%-7%. Li Ning's pricing strategy places it above more budget-friendly options like Anta, Xtep, and 361, but below Nike. We expect this middle-market positioning continues to impact Li Ning's sales as consumer preferences shift toward more distinct value and luxury segments.

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