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Chinese sportswear company Li Ning slid as much as 5.5% in Hong Kong before closing 4.2% lower at HK$41.85 after several banks cut its target prices.
Li Ning has said that its interim net profit fell 3% year over year to 2.121 billion yuan and revenue for the period rose 13% from a year earlier.
BofA Securities cut forecast of Li Ning’s earnings per share in 2023-25 by 3% – 5% to 1.64 yuan/1.93 yuan/ 2.27 yuan. The target price on the stock was lowered from HK$61.3 to HK$57, with its rating reiterated at Buy.
Daiwa lowered the forecast of Li Ning’s earnings per share from 2023 to 2025 by 7% – 11% to reflect weaker-than-expected consumer sentiment and lower gross profit margin forecasts until now.
CCB International cut lowered its profit forecasts for Li Ning by 7% and 12% for fiscal year 2023 and 2024 to reflect higher operating expenses in the first half and weak online sales and gross margins. The target price was cut to HK$52.6 from HK$56.6.
However, Goldman Sachs slightly raised the target price from HK$57 to HK$58, with its rating kept at Buy, expecting Li Ning’s sales to grow by 15% and 17% on a year-on-year basis in 2023 and the second half of 2023, respectively.
