Yamato: LI NING (02331) recovery momentum is advancing, reiterating "buy" rating.

Daiwa research report states that LI NING (02331) 's operating data in the last quarter of last year exceeded market concerns, slightly surpassing last year's revenue guidance; the net profit margin is expected to approach 10%, and the performance is expected to turn around this year, accompanied by an increase in brand popularity, the launch of new products and stores, based on a forecast of 18 times the 2026 P/E ratio, reiterating the target price of 24 Hong Kong dollars and a "buy" rating. Daiwa pointed out that during the analyst conference call, LI NING management indicated that revenue in 2025 may slightly exceed the previous year's same period, while the net profit margin will reach a "strong high single-digit" (close to 10%). These statements roughly align with Daiwa's forecast and should prompt the market consensus to make minor adjustments to the forecasts. Daiwa believes that LI NING's recovery momentum is progressing and reiterates it as the preferred target as a Chinese sportswear brand.