| Valuation method | Value, HK$ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 40.80 | 100 |
| Intrinsic value (DCF) | 10.98 | -46 |
| Graham-Dodd Method | 8.20 | -60 |
| Graham Formula | 15.30 | -25 |
Li Ning Company Limited is a leading Chinese sportswear manufacturer and retailer founded by Olympic gymnast Li Ning in 1990. Headquartered in Beijing, the company engages in comprehensive research, development, design, manufacturing, marketing, and distribution of sporting goods primarily under its flagship LI-NING brand. The company's product portfolio includes athletic footwear, apparel, equipment, and accessories catering to both professional athletes and leisure consumers. Li Ning operates a multi-brand strategy with AIGLE for outdoor sports, Double Happiness for table tennis, Danskin for dance and yoga fitness, and Kason for badminton products. With over 7,137 retail outlets across China as of 2021, the company has established one of the most extensive distribution networks in the Chinese sportswear market. As a domestic champion in China's rapidly growing athletic wear sector, Li Ning competes directly with international giants while leveraging strong national brand recognition and deep understanding of local consumer preferences.
Li Ning presents a compelling investment opportunity as a leading domestic sportswear brand in China's massive consumer market. The company demonstrates solid financial health with HKD 30.1 billion in net income, strong operating cash flow of HKD 5.3 billion, and a healthy cash position of HKD 7.5 billion against manageable debt of HKD 1.9 billion. The 0.736 HKD dividend per share provides income appeal. However, investors should monitor competitive pressures from both international giants and emerging domestic rivals, as well as potential consumer spending volatility in the cyclical leisure sector. The company's extensive retail network and multi-brand strategy provide diversification, but execution risks in maintaining growth across different sport categories remain. The relatively low beta of 0.937 suggests moderate volatility compared to the broader market.
Li Ning occupies a unique competitive position as one of China's leading domestic sportswear brands with strong national recognition and extensive retail presence. The company's competitive advantage stems from its founder's Olympic legacy, deep understanding of Chinese consumer preferences, and comprehensive vertical integration from design to retail. Li Ning's multi-brand strategy allows it to target different sport segments and price points, from premium AIGLE outdoor products to mass-market LI-NING athletic wear. The company's 7,137-store network provides significant distribution scale and market penetration that new entrants would struggle to replicate. However, Li Ning faces intense competition from global leaders Nike and Adidas, which have stronger international brand appeal and larger marketing budgets. The company also competes with Anta Sports, which has gained market share through acquisitions of international brands. Li Ning's focus on product innovation and design, particularly in basketball and running categories, has helped differentiate its offerings. The company's challenge lies in maintaining growth momentum while defending market share against both global giants and agile domestic competitors in China's highly competitive sportswear market.