Li Ning's Earnings Likely to be Pressured by Branding Investments
Dow Jones
Aug 24
0322 GMT - Li Ning's earnings are likely to be pressured by its branding investments in the short term, Nomura analysts say in a research note. The Chinese sportswear company's operating margin is expected to face continuing pressure due to its Stephen Curry partnership and national teams' sponsorship. However, Li Ning's efforts to keep investing in its brand and products may not generate reasonable returns, the analysts caution. They cite lukewarm consumer sentiment and competitive sector dynamics. Nomura cuts the stock's target price to 13.80 Hong Kong dollars from HK$16.00. Shares are 5.3% lower at HK$13.49.
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