Company margin guidance implies 2H18 margin to see faster expansion；
Consensus expectations on margins already at high end of guidance ；
We see need for investment in brand as key risk to margin trajectory .
Earnings and target price revision
Minor change in FY18 earnings but lifted FY19 earnings by 3.5%. TP lowered slightly to HK$8.5/sh vs HK$ 8.6/sh previously due to FX assumption change
12-month price target: HK$8.50 based on a PER methodology.
Catalyst: 3QFY18 operating data, 2HFY18 results, M&A, potential dividend announcement
Action and recommendation
Maintain Neutral. Li Ning is trading at 21x FY19 PER.