Cinda Securities has issued a research report forecasting that LI NING (02331) will achieve operating revenues of RMB 32.566 billion, RMB 35.116 billion, and RMB 37.585 billion for the years 2026 to 2028, representing year-on-year growth of 10%, 8%, and 7%, respectively. The projected attributable net profit for the same period is RMB 3.224 billion, RMB 3.607 billion, and RMB 4.047 billion, corresponding to growth rates of 10%, 12%, and 12%. These figures imply price-to-earnings ratios of 12.78x, 11.42x, and 10.18x. The firm maintains its "Buy" rating on the stock.

The primary rationale from the report is outlined as follows: On June 2nd, the Li Ning brand officially announced a long-term partnership with American basketball star Stephen Curry and his brand, Curry Brand. Under the agreement, Curry Brand will be fully integrated into the Li Ning ecosystem, with collaboration spanning basketball footwear and apparel, athleisure wear, and golf product lines. Having previously secured endorsements from NBA stars like Dwyane Wade, Jimmy Butler, and Yang Hansen, this new partnership signifies the company's establishment of a more comprehensive international basketball endorsement matrix.

Strategic Significance: Elevating the Basketball Matrix and Brand Power

In 2025, the basketball category accounted for approximately 17% of Li Ning's retail sales, a period seen as one of adjustment. The integration of Curry Brand is expected to aid Li Ning's expansion across multiple dimensions. From a brand perspective, Stephen Curry, as one of the most globally influential basketball players, brings strong appeal that will enhance Li Ning's worldwide recognition. On the product front, Curry Brand will complement Li Ning's existing lines such as Way of Wade and the Butler series, creating a more diversified and robust product matrix. Furthermore, the inclusion of categories like golf in this collaboration is anticipated to unlock new avenues for growth.

Optimistic Outlook for the Second Quarter and Beyond

Recent data indicates a 0.2% year-on-year growth in total retail sales for April. Looking ahead to June and the second half of the year, the brokerage anticipates a gradual improvement in operational performance. Firstly, the full rollout of summer products alongside rising temperatures, coupled with promotional events like the 618 shopping festival and the Dragon Boat Festival, is expected to boost sales of footwear and apparel. Secondly, the company's inventory-to-sales ratio remains within a manageable range, and targeted promotional activities should support healthy inventory trends. Thirdly, Li Ning's current focus on expanding its product matrix, particularly in the Glory Gold Label and outdoor categories, is believed to have good product acceptance and represents a strong potential growth driver.

Long-Term Thesis: Olympic Tailwinds and Professional Focus

Li Ning is positioned at the start of a new growth cycle, driven by three key forces: professional sports leadership, recovering brand momentum, and synergy between channels and supply chain. Since resuming its role as an official partner of the Chinese Olympic Committee in 2025, the brand's momentum has been on an upward trajectory. The partnership with Curry synergizes with Olympic resources. Together, Curry Brand, Way of Wade, and the Butler series form a more powerful international star matrix. Amplified by exposure during the Olympic cycle, this is set to significantly enhance Li Ning's international brand presence.

Key Risk Factors

Potential risks include a slower-than-expected recovery in consumer demand, intensifying industry competition, and uncertainties surrounding the return on investment for Olympic marketing initiatives.