Li Ning share price crashed 83%

Lifetime Membership Warren Buffet famously quoted: price is what you pay, value is what you get. In this context, investors must be wondering if the current Li Ning share price trading level represents value.

From a peak of HK$105 in September 2021, Li Ning share price crashed by a whopping 83% to reach HK$17.50 recently. The devastating meltdown of Li Ning share price certainly caused plenty of heart pains to its investors. Should they keep the faith or run for their lives? This must be a dilemma faced by many Li Ning investors given that rumors emerged in March 2024 that the founder of the Group was considering privatizing Li Ning. What?! At current Li Ning share price levels?

For the uninitiated, Li Ning is the Nike version of China. Founded in 1990 by former Olympic gymnast, Li Ning, the Group is a Chinese sports brand, operating professional and leisure footwear, apparel, equipment and accessories. Under the core strategy of “Single Brand, Multi Categories and Diversified Channels”, the Group has established an extensive retail distribution network and supply chain management in China.

The faltering Li Ning share price is not unique to just Li Ning as the overall China stock market suffers an explosive bubble burst after peaking in 2021. Many China stocks were not spared from the carnage as more than US$5 billion had reportedly been wiped off from China stock market, resulting in numerous investors being burnt by the unfolding meltdown. And obviously, Li Ning share price was not been spared from the rout. Three years down the road, many investors are still wondering if the China stock market will finally shake off the blues to see light at end of tunnel.

Till today, Li Ning share price remains one of the most volatile stocks in HKEX as the sharp decline in the counter has not been linear. For sure, the past few years have been a wild roller-coaster ride for investors as Li Ning share price gyrated up and down, in tandem with the macro-economic conditions, anti-monopoly measures by the Chinese government and the Group’s financial performances. Against this backdrop, an SG Wealth Builder Lifetime Member has written in to seek my insights on this stock.

Year-to-date, Li Ning share price declined 11%. At one point of time, Li Ning share price even reached a 5-year low of HK$15.10 in March 2024. Investors who have not been monitoring Li Ning share price closely may have thought that the falling share price reflected some kind of serious financial troubles for the Group, which is absolutely not the case. In fact, the past five years of financial performances have been nothing short of fantastic, with net profits surging 100% from RMB1.5 billion in FY2019 to RMB3 billion in FY2013. In addition to this, the Group has no outstanding borrowings. So the high interest rates climate has no impact on the Group.

Based on the solid financial performances in recent years, investors must be confounded by the awful trend of Li Ning share price. It just doesn’t make sense at all. In this article, I will do a deep dive and share my insights on Li Ning share price.Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in Li Ning before. Whether Li Ning share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

Why Li Ning share price got bombed out

In August 2023, Li Ning share price plunged after [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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