The Zhitong Finance App learned that Lyon released a research report stating that it will maintain Li Ning's (02331) “outperform the market” rating and the target price of HK$20. The bank believes that Li Ning's potential special dividend in 2026, as well as the Li Ning brand (adult business and young)'s third-quarter retail sales were flat year over year and performed better than expected, all of which are expected to provide some support for the stock price.

The bank pointed out that Li Ning's year-on-year performance was superior to the core brands of his peers, partly due to a significantly lower comparison base. Among them, Li Ning Young continued to be the highlight, and retail sales increased by double digits year over year. In terms of inventory, the company's inventory remained stable year over year, and the company aims to reduce inventory to a level equivalent to 4 to 4.5 months of sales by the end of 2026. Since September, the company's discount margin has narrowed year over year, and management expects this trend to continue in the fourth quarter. Lyon remains unchanged in Li Ning's 2026 performance guide. It is expected that sales will increase by a low number of units year-on-year for the whole year, and the net profit margin will be between medium and high units. The bank believes that the current valuation already reflects this year's profit pressure, and a potential special dividend could be a short-term catalyst.

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