Xiaomo released a research report, reiterating$Li Ning Co. Ltd. (02331.HK) $The "overweight" rating raised the net profit forecast for the 2022-24 fiscal year by 1% to 2%, and raised the target price from HK $88 to HK $94. The company's net profit rose 12% year-on-year in the first half of the year, driven by a 22% year-on-year increase in sales, but sales growth was partially offset by a contraction in gross profit margin due to strong discounts, cost inflation and channel mix. Maintain the sales growth guidance of 23% for this year, and guide that the net profit margin may reach a high double-digit rate (about 16%, 19%).

The bank pointed out that during the period from July to August 10, Li Ning Co. Ltd. 's retail sales increased by about 13 per cent year-on-year and showed a continuous improvement trend, with discounts narrowing compared with the second quarter; and due to the influence of a high base, retail sales fell by a high number of units in the second quarter; channel inventory levels remained at a healthy level of 3.6 months, compared with 3.1 months in the first half of last year. The bank maintains confidence in Li Ning Co. Ltd. 's long-term structural growth, believing that the further release of brand value is difficult for other brands to emulate and continues to improve efficiency and business expansion.