CICC: Maintaining Li Ning's (02331) “outperforming the industry” rating, the target price of the special dividend of HK$19.05 corresponds to a dividend rate of about 18.4%

The Zhitong Finance App learned that CICC released a research report stating that maintaining Li Ning's (02331) “outperforming the industry” rating and target price of HK$19.05, corresponding to price-earnings ratios of 2026 and 2027, respectively, is 19 times and 17 times, respectively. There is 29% room for growth compared to the current stock price. The company announced that the board of directors approved the declaration and payment of a special dividend of RMB 2.32 per share (corresponding to HK$2.71 per share), with a total dividend of approximately RMB 6 billion. The net date is November 18, and the payment date is December 1. The bank estimates that this special dividend corresponds to the current stock price with a dividend ratio of about 18.4%. The bank believes that this special dividend reflects the company's capital allocation idea of allocating surplus cash to shareholders on the basis of safeguarding strategic investment and working capital requirements.

CICC's main views are as follows:

A large special dividend of 6 billion yuan was implemented, corresponding to the current stock price dividend rate of about 18.4%

The current special dividend is RMB 2.32 per share, based on 2,585 billion common shares, and the total corresponding dividend is approximately RMB 6 billion. The bank estimates that the special dividend corresponds to the current stock price with a dividend ratio of about 18.4%.

The bank believes, on the one hand, that as of the first half of 2026, the company's net cash on book is about 19.4 billion yuan, and the annual operating cash flow can usually cover capital expenses and regular dividends for the year, and the financial situation is healthy and abundant.

On the other hand, the company's regular dividend rate is about 50%. This special dividend is an incremental return, reflecting the company's capital allocation idea of allocating surplus cash to shareholders on the basis of safeguarding strategic investment and working capital requirements.

Rational allocation of funds to continue to promote professional sports and brand building

The company previously stated at the results meeting that it has more clearly predicted the capital requirements for brand resources and strategic layout over the next 12 to 24 months, and plans to balance long-term investment, financial soundness, and shareholder returns.

In terms of brand resources, since 2025, the company has successively laid out resources such as cooperation with the Chinese Olympic Committee, cooperation with famous players, and marathons that will help strengthen the brand's professional sports awareness and international influence over a long period of time.

In terms of products, the company continues to invest in sports technology, sports science research and core category iteration, while expanding market segments such as outdoor, women's and children's clothing.

In terms of channels, dragon stores and specialty stores have been launched one after another, and financial support is still needed for store opening, product allocation, and early operation. The bank believes that sales contributions from relevant stores need to be gradually released.

Risk Alerts

Consumer love has declined; industry competition has intensified; and the retail environment has fallen short of expectations.