Daihe: LI NING (02331) saw a slight recovery in retail in August and maintains an "Outperform" rating.

Daiwa published a research report stating that it maintains a outperform rating for LI NING (02331) with a target price of HKD 15.1. According to channel surveys, the companys retail sales in August this year are estimated to have slightly turned positive, mainly benefiting from improved weather and KOL live-streaming promotions. However, after excluding weather and live-streaming factors, demand remains weak. The bank believes that even a slight month-on-month improvement could drive stock performance. Looking ahead to September, Daiwa expects performance to further improve month-on-month, driven by the Mid-Autumn Festival holiday and Stephen Curry's promotional events in China. Daiwa projects that sales and profit growth related to Curry's products will not become significant until 2028. Due to the strategic cooperation with Curry and sponsorship of other sports events, the bank has raised its forecast for advertising expenditure in the second half of the year by RMB 600 million. Considering that the contract with Curry only took effect on June 2, the bank estimates that advertising spending in the second half may be higher than previously expected. Regarding Viva Goods recent increase in LI NING shares, Daiwa believes that Viva's previous acquisitions were effective in boosting the stock price in the short term, and this latest increase further demonstrates its long-term confidence in LI NING.