Core Viewpoint - The event "Li Ning Night" at the "China House" during the 2026 Milan Winter Olympics showcases the Li Ning brand's commitment to promoting Chinese sports culture and innovation in sports technology [1][5][19]. Group 1: Event Overview - The "China House" serves as a comprehensive service facility for the Chinese sports delegation, promoting Chinese sports spirit and traditional culture while facilitating international sports exchanges [5]. - The event featured notable attendees including IOC Executive Board member Li Lingwei, Chinese Olympic Committee officials, and sports champions, highlighting the significance of the occasion [1]. Group 2: Li Ning Brand Presentation - Li Ning, as an official partner of the Chinese Olympic Committee, presents five themes: "Chinese Glory," "Technology Sports," "Cultural Preservation," "Fashion Sports," and "Green Sports," to showcase China's advancements in sports technology and aesthetics [5]. - The design of the Li Ning exhibition draws inspiration from traditional Chinese architecture, symbolizing the brand's connection to cultural heritage and competitive spirit [6]. Group 3: Exhibition Highlights - The "Chinese Glory" section displays the evolution of the Chinese sports delegation's award outfits from past Winter Olympics, emphasizing Li Ning's 40-year partnership with Chinese sports [7]. - The "Technology Sports" area features cutting-edge technologies used in Li Ning's products, including advanced shoe technologies and materials that enhance performance [9][10]. Group 4: Cultural and Environmental Initiatives - The "Cultural Preservation" theme showcases collaborations with cultural institutions, integrating traditional craftsmanship into modern sportswear, thus promoting Chinese culture on an international stage [14]. - The "Green Sports" section highlights Li Ning's commitment to sustainability through innovative materials and eco-friendly production processes, aligning with global trends in environmental responsibility [16]. Group 5: Brand Commitment and Future Outlook - Li Ning's founder expressed gratitude towards the Chinese Olympic Committee for their support and emphasized the brand's ongoing commitment to contributing to the high-quality development of Chinese sports [23].

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of HKD 22.76 [1][10]. Core Insights - The company reported a slight year-on-year decline in overall retail sales for Q4 2025, but the decline has narrowed compared to previous months. The sales performance in October was boosted by the National Day and Mid-Autumn Festival, while November and December saw a weakening due to the consumer environment and warm winter [6][10]. - Management is confident in achieving revenue and profit margin guidance for 2025, expecting revenue to remain flat and profit margins to increase in the high single digits. The upcoming Olympic year in 2026 is anticipated to drive marketing investments and resource allocation, potentially leading to a turning point in sales [6][10]. - The company is actively managing inventory and risks in a complex retail environment, with a healthy inventory-to-sales ratio returning to a range of 4-5 months [9][10]. Financial Performance - Revenue projections for the company are as follows: - 2024: RMB 28,676 million - 2025E: RMB 28,946 million (up 0.94%) - 2026E: RMB 30,023 million (up 3.72%) - 2027E: RMB 31,825 million (up 6.00%) [5][10]. - Net profit attributable to the parent company is projected to be: - 2024: RMB 3,013 million - 2025E: RMB 2,696 million (down 10.52%) - 2026E: RMB 2,769 million (up 2.73%) - 2027E: RMB 3,171 million (up 14.50%) [5][10]. - The company’s EPS (Earnings Per Share) is expected to be: - 2024: RMB 1.17 - 2025E: RMB 1.04 - 2026E: RMB 1.07 - 2027E: RMB 1.23 [5][10]. Channel Performance - In Q4 2025, offline channels (including retail and wholesale) saw a year-on-year decline in sales, while online sales remained flat. The direct sales channel performed better than wholesale, largely due to contributions from outlet stores [7][10]. - The company continues to expand its store network, with a total of 6,091 stores (excluding Li Ning YOUNG) as of Q4 2025, and plans to open more specialty stores in various categories [8][10]. Discount and Inventory Management - Overall discounts in Q4 2025 deepened slightly year-on-year and quarter-on-quarter, with offline discounts averaging around 65% due to increased clearance efforts for winter apparel amid warm weather [9][10]. - The company has effectively managed inventory levels, with the inventory-to-sales ratio returning to a healthy range, indicating good inventory management practices [9][10].

Group 1 - The core viewpoint of the report is that with the new Olympic cycle beginning, Li Ning (02331) is gradually experimenting with new product lines and store formats, which is expected to enhance the brand's influence among consumers [1] - The company maintains its EPS forecast for 2025/26 at 0.92/1.07 HKD, with the current stock price corresponding to 18/16 times the 2025/26 earnings multiple; the target price has been raised by 4% to 23.61 HKD, indicating a 29% upside potential from the current stock price [1] - The report highlights the opening of Li Ning's first global "Dragon Store" in Beijing, which reinforces the company's positioning in the Olympic product matrix [2] Group 2 - The Dragon Store connects Li Ning's representative design symbols with traditional culture and emphasizes its role as the official partner of the Chinese Olympic Committee, showcasing the brand's culture and product professionalism through themes like "Award Moments," "Competition Moments," and "Life Moments" [3] - The newly launched "Honor Gold Label" series integrates professional sports technology with daily commuting needs, providing high-quality options for urban consumers and expanding Li Ning's product matrix beyond core sports functionality [4] - Li Ning has successfully iterated its core products, introducing new midsole technology "Super Capsule" and new versions of key running shoes "Flying Electric" and "Red Rabbit," while sponsored athletes frequently achieve podium finishes in major events, showcasing the brand's strength in the professional sports field [5]