Broker Name: China Galaxy International Securities (CGSI)
Date of Report: March 20, 2026
Excerpt from CGSI report.
Report Summary
- Li Ning’s FY25 revenue reached RMB 29.60bn (+3.2% YoY), slightly exceeding expectations, with solid growth in running and training categories, but net profit down 2.6% YoY due to a higher tax rate. The company’s operating profit margin improved thanks to better expense control.
- Wholesale and e-commerce channels outperformed, while direct-to-customer (DTC) revenues declined as underperforming stores were closed, and inventory remained healthy.
- Management targets high single-digit revenue growth for FY26, with gross profit margin expected to be stable or improve slightly, despite higher distribution expenses from Olympic sponsorships and a busy sports events calendar.
- CGSI upgraded the stock to “Add” with a higher DCF-based target price of HK\$26.2, citing improved operational efficiency and positive guidance for FY26. Risks include weaker demand, raw material prices, and rising expenses.
- Key financial metrics for FY26F: expected revenue RMB 31.7bn, net profit RMB 3.0bn, and net profit margin at high single-digit levels. The company plans to open new stores and expand premium and kidswear formats in FY26.
- CGSI’s EPS forecasts for FY26 and FY27 were raised by 12.2% and 10.4%, respectively, reflecting increased confidence in the company’s profitability and growth outlook.
Above is an excerpt from a report by CGSI. Clients of CGSI can be the first to access the full report from the CGSI website: https://www.chinastock.com.hk
