Bank of America Securities: Upgrades LI NING (02331) rating to "buy" with a target price of 25 Hong Kong dollars, expecting profit to recover and grow.

Bank of America Securities released a research report stating that LI NING (02331) performance in 2025 exceeded expectations, with management guiding that income and net profit margin in 2026 will both be in the high single digits, better than expected. They have upgraded LI NING's rating from "neutral" to "buy" and raised the target price from HK$20.2 to HK$25. The report indicates that LI NING's growth has accelerated, with stable growth in the running shoe business, basketball business trending steady, leisure business accelerating again, and increased contributions from the badminton and outdoor business. Although discount and promotional expenses may pressure profit margins, reductions in direct operating expenses, lower effective tax rates, and decreased impairment expenses can provide relief. The bank expects profitability to have bottomed out in 2025 and to recover to high single-digit growth in 2026.