Key Takeaways:
- Li Ning shares fell 5.8% to HKD17.31 on Curry partnership cost concerns
- Goldman Sachs maintained Buy with HKD26.7 TP but flagged near-term margin pressure
- Revenue from the Curry deal won't materialize for 15 to 18 months, GS said
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Li Ning slides 5.8% as Curry deal costs raise investor concerns
Li Ning (02331.HK) slid 5.8% to HKD17.31 after announcing a long-term strategic partnership with basketball star Stephen Curry, as investors weighed upfront costs against potential brand benefits.
"The partnership will generate profound benefits to Li Ning's brand strength over the medium to long term, but additional expenses in the short term may weigh on the margin recovery path," Goldman Sachs analysts said in a research report. The broker maintained its Buy rating with a 12-month price target of HKD26.7, implying 54% upside from the current level.
The stock touched an intraday low of HKD17.09, with turnover of HKD284 million on 16.2 million shares. Short selling accounted for 38.4% of trading volume, or HKD327 million. The decline extended a near-3% drop on June 2, reflecting investor debate over the investment's impact on near-term profit.
Li Ning will take full responsibility for product development, channel expansion and global positioning of Curry's personal brand, with product lines expanding from basketball and golf into lifestyle and training categories. Goldman Sachs cautioned that building a comprehensive product matrix typically takes 15 to 18 months, meaning no marked revenue contribution this year. Contract amortization costs and research and development expenses tied to Curry will begin in 2026, though the broker expects advertising and promotion costs to account for 12% of sales that year — a manageable impact.
The Chinese sportswear maker's domestic basketball business has been under pressure, with first-quarter 2026 revenue declining year-over-year and the drop widening in the second quarter, according to Goldman Sachs. China's basketball market has remained structurally sluggish since the start of the year, which may limit revenue growth potential even as the Curry partnership opens new avenues for global expansion.
The partnership marks a milestone for Li Ning as it seeks to leverage Curry's international influence to capture a new generation of young consumers and expand beyond China. The company, founded by Olympic gymnast Li Ning, competes with global giants Nike and Adidas as well as domestic rival Anta Sports in the world's second-largest sportswear market.
The decline puts Li Ning shares near their lowest levels of the year, testing support as investors weigh upfront costs against long-term brand value. The company's next catalyst will be its interim results, where investors will look for signs of stabilization in the domestic basketball segment and updates on the Curry product pipeline.
This article is for informational purposes only and does not constitute investment advice.
[1] LI NING Slides 5%+; G Sachs: Partnership with Stephen Curry to Strengthen Brand Power, Financial Impact This Yr Manageable[2] Steph Curry reveals what helped him decide on Li-Ning partnership[3] Warriors All-Star Steph Curry’s Li-Ning contract details are jaw-dropping[4] Top NBA athletes signed to Li-Ning after Stephen Curry’s deal[5] Stephen Curry signs with Li-Ning as the rising Chinese brand threatens U.S. footwear heavyweights
