JPMorgan's research report expects that Li Ning (02331.HK) will see a year-on-year profit decline of 10% in the first half of this year. Among them, sales will increase by 1%; gross margin will increase by 0.8 percentage points; sales and administrative expenses will increase by 1.8 percentage points.

It is expected that Li Ning's retail sales in the second quarter of this year will remain stable to a low single-digit growth, and the offline business will also be inferior to the online business, reflecting that Li Ning's market share has declined relative to its peers.

JPMorgan stated that under the background of macroeconomic and industry challenges, a single brand strategy will face more uncertainty compared to a multi-brand portfolio strategy. Based on Li Ning's weak retail sales performance in the second quarter of this year and the challenges of macro uncertainty, the bank lowered Li Ning's target price from RMB 14 to RMB 13.8 and maintained a 'Shareholding' rating. (js/cy)

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