Li Ning Company (2331) AI Stock Analysis

• Market Cap: HK$52.79B
• Dividend Yield: 3.83%
• Average Volume (3M): 15.81M
• Price to Earnings (P/E): 17.5
• Beta (1Y): 1.23
• Revenue Growth: 4.12%
• EPS Growth: -7.17%
• Country: HK
• Employees: 5,022
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Leisure
• EPS (TTM): 0.75
• Shares Outstanding: 2,584,813,700
• 10 Day Avg. Volume: 14,017,045
• 30 Day Avg. Volume: 15,805,178
• PEG Ratio: -2.71
• Price to Book (P/B): 1.53
• Price to Sales (P/S): 1.39
• P/FCF Ratio: 10.58
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$23.51
• Price Target Upside: 15.01% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: HK$23.00 ▲(12.52% Upside)

Li Ning Company's strong financial performance and reasonable valuation are key strengths, supported by a solid earnings call. However, technical indicators suggest potential short-term weakness, and challenges in certain product categories could impact future growth.

Positive Factors

Strong balance sheet and low leverage

Very low financial leverage and a high equity ratio provide durable financial flexibility. This capital structure supports sustained investment in product development, marketing and strategic partnerships, and helps the company absorb macro shocks without jeopardizing operations.

Robust cash generation and FCF growth

Strong cash conversion and a large increase in free cash flow underpin the company's ability to fund capex, channel investment and a consistent dividend (50% payout proposed). Durable cash flow reduces refinancing risk and enables disciplined reinvestment in growth.

Product mix strength: footwear and accessories growth

Outperformance in footwear and accessories reflects a favorable shift toward higher-demand, often higher-margin categories. Sustained strength here, including professional running shoe volumes, supports long-term revenue resilience and reduces dependence on weaker apparel segments.

Negative Factors

Apparel revenue decline

A drop in apparel sales signals structural weakness in a core category, risking slower overall growth if not reversed. Apparel underperformance can impair brand breadth, reduce cross-sell opportunities, and require ongoing investment to regain market share over the medium term.

Compression in gross and net margins

Margin erosion from intensified promotions and channel adjustments threatens durable profitability. If structural, these pressures can force higher marketing spend or price competition, reducing free cash flow and limiting funds available for product investment and brand building.

Declining direct retail and store optimization

Shrinking direct retail and significant POS closures indicate weaker offline demand and a shift to wholesale. This may reduce control over customer experience and long-term brand equity, and create reliance on third-party channels that can pressure margins and long-run customer loyalty.

Li Ning Company Business Overview & Revenue Model

Company Description

Li Ning Company Limited engages in the research and development, design, manufacture, marketing, distribution, and retail of sporting goods in the People's Republic of China. The company offers sporting goods, including footwear, apparel, equipment, and accessories for professional and leisure purposes primarily under the LI-NING brand. It also develops, manufactures, markets, distributes, and/or sells outdoor sports products under the AIGLE brand; table tennis under the Double Happiness brand name; fashionable fitness products for dance and yoga under the Danskin brand; and badminton under the Kason brand name. As of December 31, 2021, the company operated 7,137 conventional stores, flagship stores, China LI-NING stores, factory outlets, and multi-brand stores under the LI-NING brand. Li Ning Company Limited was founded in 1990 and is headquartered in Beijing, the People's Republic of China.

How the Company Makes Money

Li Ning generates revenue through multiple streams, primarily from the sale of its branded sportswear and footwear. The company operates retail stores, e-commerce platforms, and wholesale distribution channels, allowing it to reach a broad customer base. Key revenue streams include direct sales from its retail outlets, online sales through its own website and third-party platforms, and bulk sales to distributors and retailers. Additionally, Li Ning has secured significant partnerships, including collaborations with international sports organizations and endorsements from high-profile athletes, which enhance brand visibility and drive sales. The company's marketing strategies, focusing on innovation and alignment with popular sports trends, also contribute to its earnings.

Li Ning Company Financial Statement Overview

Summary

Li Ning Company shows strong financial health with robust revenue growth, high profitability, and a solid balance sheet. Effective cost management and strong cash flow generation enhance its financial position, despite slight declines in net income.

Income Statement

Li Ning Company demonstrated strong revenue growth, with a 3.9% increase in the latest year. The gross profit margin remained robust at 49.4%, and the net profit margin was healthy at 10.5%. However, there was a slight decline in net income compared to the previous year. EBIT and EBITDA margins were strong, reflecting effective cost management.

Balance Sheet

The company maintains a solid balance sheet with a low debt-to-equity ratio of 0.07, indicating low financial leverage. The equity ratio of 73.1% reflects a strong capital structure. Return on equity stood at 11.5%, demonstrating effective use of equity capital.

Cash Flow

Li Ning's cash flow position is strong, with a 31.1% increase in free cash flow. The operating cash flow to net income ratio is 1.75, showing strong cash generation relative to earnings. The free cash flow to net income ratio is 1.25, indicating efficient cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	29.15B	28.68B	27.60B	25.80B	22.57B	14.46B
Gross Profit	14.34B	14.16B	13.35B	12.48B	11.97B	7.09B
EBITDA	6.22B	6.12B	6.31B	6.97B	6.53B	3.31B
Net Income	2.80B	3.01B	3.19B	4.06B	4.01B	1.70B
Balance Sheet
Total Assets	36.78B	35.71B	34.21B	33.65B	30.27B	14.59B
Cash, Cash Equivalents and Short-Term Investments	17.05B	15.76B	8.94B	8.03B	15.15B	7.19B
Total Debt	1.78B	1.94B	2.54B	2.14B	1.32B	1.05B
Total Liabilities	9.61B	9.60B	9.80B	9.31B	9.17B	5.90B
Stockholders Equity	27.17B	26.10B	24.41B	24.33B	21.10B	8.69B
Cash Flow
Free Cash Flow	3.52B	3.76B	2.87B	2.08B	5.50B	2.02B
Operating Cash Flow	4.95B	5.27B	4.69B	3.91B	6.53B	2.76B
Investing Cash Flow	3.14B	-839.62M	-2.45B	-9.48B	-6.54B	-991.55M
Financing Cash Flow	-2.33B	-2.32B	-4.22B	-1.89B	7.60B	-513.49M

Li Ning Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 20.44
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2331, the sentiment is Positive. The current price of 20.44 is above the 20-day moving average (MA) of 20.20, above the 50-day MA of 18.87, and above the 200-day MA of 17.04, indicating a bullish trend. The MACD of 0.53 indicates Positive momentum. The RSI at 55.61 is Neutral, neither overbought nor oversold. The STOCH value of 38.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:2331.

Li Ning Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2331	76 Outperform	HK$52.79B	17.45	10.53%	3.83%	4.12%	-7.17%
2020	68 Neutral	$217.21B	13.58	25.06%	3.10%	13.55%	13.30%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Li Ning Company Corporate Events

Li Ning Invests RMB1.9 Billion in Low-Risk Structured Deposits

Li Ning Company Limited has deployed a total of RMB1.9 billion of surplus cash into low-risk structured deposit products through several wholly owned subsidiaries between 18 and 26 January 2026. The funds were placed with major Chinese banks, including China Guangfa Bank, Bank of China and China Merchants Bank, in multiple tranches ranging from RMB200 million to RMB700 million, with product tenors of about five to six months and expected annual returns between 0.60% and 3.00%. As these wealth management subscriptions occurred within a 12‑month period, they are aggregated under Hong Kong listing rules and classified as a discloseable transaction, triggering reporting and announcement requirements; the move underscores the company’s effort to enhance returns on idle cash while maintaining a conservative risk profile, with implications for shareholders in terms of liquidity management and interest income.

The most recent analyst rating on (HK:2331) stock is a Buy with a HK$23.50 price target. To see the full list of analyst forecasts on Li Ning Company stock, see the HK:2331 Stock Forecast page.

Li Ning Posts Slight Q4 Sell-Through Decline as Youth Stores Expand

Li Ning Company Limited reported a modest softening in its core retail performance for the fourth quarter of 2025, with overall retail sell-through at LI-NING branded points of sale (excluding LI-NING YOUNG) declining by a low single digit year-on-year. Offline channels saw a mid-single-digit drop, as direct retail slipped by a low single digit and wholesale franchised outlets by a mid single digit, while e-commerce sales were flat, reflecting a challenging consumption environment and a mixed channel performance. The group continued to fine-tune its physical footprint, ending 2025 with 6,091 LI-NING points of sale in China, a slight net reduction driven by closures in direct retail that were partially offset by growth in wholesale outlets, while its LI-NING YOUNG network expanded to 1,518 stores, underscoring the brand’s focus on the youth segment. The company emphasized that the figures are based on unaudited operational data and may not fully reflect its overall revenue or financial performance, signaling to investors the need for caution ahead of formal financial disclosures.

The most recent analyst rating on (HK:2331) stock is a Buy with a HK$23.20 price target. To see the full list of analyst forecasts on Li Ning Company stock, see the HK:2331 Stock Forecast page.

Li Ning Sets 2026 Caps for Connected Transactions Under Restricted Share Scheme

Li Ning Company has set new annual caps for 2026 under its Restricted Share (RS) Scheme, which is used to purchase company shares from the open market to satisfy the vesting of restricted shares granted to employees and other selected participants. For the period from 1 January to 31 December 2026, the board has approved a Number Annual Cap of 15 million shares and a Referable Amount Annual Cap of HK$300 million, with the effective limit being whichever is lower in value. Because the RS Scheme trustee is deemed an associate of the company’s connected persons, these purchases constitute continuing connected transactions under Hong Kong listing rules, triggering reporting, announcement and annual review obligations but remaining exempt from independent shareholder approval as all relevant percentage ratios are below 5%. The caps were set with reference to past grants, scheme limits, share price performance and anticipated future grants, and the company maintains governance safeguards requiring independent non-executive director approval for any restricted share grants to directors or administration committee members.

The most recent analyst rating on (HK:2331) stock is a Buy with a HK$19.50 price target. To see the full list of analyst forecasts on Li Ning Company stock, see the HK:2331 Stock Forecast page.