Key Takeaways:
Bank of China International maintained its "Buy" rating on Li Ning Co. (02331.HK) after the sportswear giant reported a rebound in sales for the first quarter of 2026.
"Believing Li Ning will keep picking up, BOCI has kept a Buy rating on LI NING, with a target price of HKD23.9," the bank said in a research note.
The report highlighted that Li Ning's retail sell-through saw mid-single-digit year-over-year growth, a significant recovery from a decline in the fourth quarter of 2025. The new target price of HKD 23.9 suggests a 20.6% upside from the stock's recent trading level of around HKD 19.82.
Despite the positive analyst outlook, Li Ning's stock has faced pressure, with high short-selling interest. Investors will watch to see if the sales recovery can be sustained against broader market headwinds and translate into share price momentum.
The bank's affirmation comes as Li Ning's results were in line with expectations. The sales recovery marks a positive turn for the company after a challenging end to the previous fiscal year. However, the market reaction appeared disconnected from the analyst's optimism, with the stock trading down and a short-selling ratio of over 45% reported, indicating significant bearish sentiment among some market participants.
The maintained "Buy" rating suggests the bank sees the current share price as an attractive entry point, betting that the operational improvements will eventually outweigh the negative market sentiment. The next catalyst for the stock will likely be the release of its full half-year results, which will provide a clearer picture of margin performance and inventory levels.
This article is for informational purposes only and does not constitute investment advice.
