[I-bank focus]Jefferies raises Li Ning (02331) to HK$5.2

   Jefferies Research raised its target price for Li Ning Co. Ltd. (02331) to HK$5.2 from HK$4.2, and maintained its "hold" rating.
  The research house expects Li Ning's earnings to continue to recover in the near term due to store network expansion and cost-cutting, but remains cautious on its medium-term strategy.
  Jefferies believes the reduction in advertising and promotion expenses will help to ease margin pressure in the near term, but could hurt its competitiveness in the medium term as
competitors have started to increase their A&P budget.
  It also believes Li Ning's strength lies in functional products, which are well perceived by consumers. However, its recent strategy highlights leisure brands, which could take time to gain recognition. 
  Jefferies nudged up its 2017 revenue by 0.8% to RMB9bn (+12.3% yoy), driven mainly by the average of high single-digit growth in the wholesale and retail channels and 40% growth in e-commerce. It expects GP margin to expand by 0.7ppt yoy to 47% in 2017, versus the previous forecast of 47%, due to the clearing of old inventory and channel mix change from wholesale to retail and e-commerce.