Bank of Communications International has released a research report upgrading its target price for LI NING (02331) by 22.1% from HK$19.5 to HK$23.8 and raising its rating to "Buy." The institution believes the company's strategic focus is gradually shifting from inventory reduction and expense control to improving store efficiency and enhancing profitability, presenting an attractive valuation. The bank anticipates the company's revenue will increase by approximately 7% year-on-year in 2026, with gross profit margin expected to stabilize. The year 2026 is significant for sports, and with the company's Olympic marketing investments and the launch of high-end product lines such as the Glory Gold Label, the brand's professional image and sales of core product categories are expected to improve. The institution has raised its revenue forecasts for 2026-2027 by 5-6% and increased its net profit projections by 2-5% to 3.06 billion/3.55 billion yuan. In 2025, LI NING's revenue grew 3.2% year-on-year to 29.6 billion yuan, with attributable net profit reaching 2.94 billion yuan, both exceeding the bank's previous forecasts. The net profit margin was 9.9%. Refined cost control measures led to improved operational efficiency, driving the operating profit margin up by 0.4 percentage points year-on-year to 13.2%. The bank views the improvement in operating profit margin as a significant positive signal, indicating that the company is proactively enhancing efficiency amid slowing revenue growth, with initial signs of an operational turnaround. Management has provided guidance for high single-digit revenue growth and the maintenance of a high single-digit net profit margin in 2026, which the bank considers optimistic.