J.P. Morgan lifted its target price for Li Ning (02331) to HK$31 from HK$26 and maintained its "overweight" rating.
The research house said Li Ning printed a positive set of results for 3Q, with acceleration in both retail sell-through and SSSG. The performance is slightly above JPM's
expectations.
It said Li Ning's September performance accelerated versus July/August, while Anta (02020) and Xtep (01368) brands recorded a soft September on unfavorable weather. What is more encouraging is that discount/inventory levels both improved.
JPM believes brand equity was the key driver of its strong set of results, where the "Li Ning" brand is now being well-recognized as a sportswear player with a fashionable concept mix of Chinese symbolism and sports. Li Ning's efforts to improve products, channel efficiency, and supply chain should support margin expansion in the next three years.
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