Credit Suisse lifted its target price for Li Ning (02331) to HK$31 from HK$26.3 and maintained its "outperform" rating.
The research house said Li Ning's 3Q operational data was a beat, with overall SSSG
accelerating to high-teens versus mid-teens in 2Q. Overall sell-through growth at +low 30s also accelerated from +low-20s.
Against domestic brands, Li Ning was the only brand that saw an accelerating growth
momentum. Credit Suisse believes the momentum was supported by ongoing traction in its "China Li-Ning" products.
Over medium term, Credit Suisse believes it will benefit from athlesiure trend and consumers increasing shift towards domestic brands. The research house estimated Li Ning to deliver a 42% earnings CAGR in 2019-21, the highest within the Chinese sportswear market. Credit Suisse lifted its earnings forecast by 6-9% in 2020-21 on higher revenue/margins assumptions.
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