CICC has issued a research report reiterating its outlook for LI NING (ASX: 02331). The brokerage notes that the company's recent signing with a star athlete is still in its early stages, with related cost planning yet to be clarified. Consequently, it maintains its earnings per share (EPS) forecasts for 2026 and 2027 at RMB 1.19 and RMB 1.31, respectively.
At the current share price, this implies a price-to-earnings (P/E) ratio of approximately 14 times for 2026 and 12 times for 2027. CICC has decided to maintain its 'Outperform' rating on the stock alongside an unchanged target price of HK$27.50.
This target corresponds to a 20x P/E multiple based on 2026 earnings, suggesting a potential upside of approximately 46% from the current trading level. The core rationale from CICC is outlined below.
Recent Corporate Developments
On June 2nd, the company announced a long-term partnership with American basketball star Stephen Curry and the Curry Brand. This collaboration is founded on brand co-creation to develop a multi-category range of professional sports equipment.
Partnership Aims to Boost Basketball Sales and Global Profile
Stephen Curry is a globally recognized top-tier athlete, a four-time NBA champion, two-time regular season MVP, and an Olympic gold medalist. His dedication to sportsmanship and social responsibility, particularly towards youth, aligns well with the LI NING brand ethos.
The brokerage draws a parallel to LI NING's 2012 signing of Dwyane Wade, which helped establish its position in the top tier of China's basketball footwear market through flagship products featuring the 'Boom' technology. The subsequent trickle-down of this technology and expansion of the product portfolio fueled growth in the basketball category.
It is estimated that the 'Way of Wade' and 'Fang Wu' series now contribute over half of the company's basketball category sales. While the basketball apparel and footwear market has faced pressure in recent years due to industry cycles, LI NING's year-on-year decline in basketball sales for the first quarter of 2026 has already narrowed.
CICC anticipates that the partnership with Stephen Curry is likely to improve the company's basketball category sales performance. Furthermore, collaborating with a global intellectual property (IP) like Curry's brand is expected to enhance LI NING's consumer recognition in international markets and support the expansion of its global distribution channels.
Diversifying Sports Collaborations to Drive Multi-Category Growth
In the 2025 retail sales breakdown, running, sports lifestyle, basketball, comprehensive training, and other categories accounted for 31%, 28%, 17%, 16%, and 8%, respectively. Driven by core IPs, the sports lifestyle category resumed growth in the first quarter of 2026, and full-year performance is expected to remain positive.
According to LI NING's official social media, the collaboration with Curry will span basketball, golf, and the sports lifestyle domain, which is poised to drive growth across multiple product categories.
Healthy Inventory Levels and New Product Launches
The company maintains a healthy inventory level, with an all-channel inventory-to-sales ratio of 5x at the end of the first quarter of 2026, remaining stable year-on-year.
LI NING continues to iterate new products across categories. The running category will expand the application of the 'Super Boom Capsule' technology platform and launch more cushioned running shoes. The sports lifestyle category will enrich its women's product matrix and extend the 'Glory Gold Label' range for spring and summer to cover commuting and travel scenarios.
These new product introductions are expected to support sustained and healthy growth in retail sales.
Key Risks to Consider
Potential risks include a retail environment that falls short of expectations, intensifying industry competition, and the partnership's progress not meeting anticipated timelines.