Citi: Maintains Li Ning's (2331.HK) buy rating with a target price of HK$103.4

Citi issued a report and recently communicated with the management of Li Ning (2331.hk) that it is reasonable for the company to give guidance on sales revenue growth of about 20 to 23% (low-20s) in 2022, and the company also detailed that the proceeds of the recent rights issue will be mainly used to invest in its own business expansion, rather than merger and acquisition activities.

The bank pointed out that Li Ning is firm in its sports fashion strategy, and the company's long-term growth through "Li Ning 1990" or long-term mergers and acquisitions is expected to alleviate the business pressure brought about by the fila business of an industry anta in the future. The bank maintained Li Ning's "buy" rating and target price of HK$103.4, and was bullish on Taobo, but gave Anta a "sell" rating.

Citi quoted Li Ning's management as saying that the profit margins of the company's wholesale and retail businesses have room to improve, so that the net profit margin can be maintained at a level of 16% to 19% (high-teens) in 2022.

This article originated from Grand Gateway