Morgan Stanley said Li Ning's Wednesday share decline was negatively linked to the stake sale by Haidilao's major shareholder, but it believes the market misread the shift because Viva has continued to increase its Li Ning holdings after the new trust rules rather than sell. According to Sina Finance, Li Ning's Hong Kong-listed shares were down 2.2% as of 9:51 a.m. UTC+8, extending Wednesday's decline after closing more than 6% lower that day.
Morgan Stanley analysts including Dustin Wei said China's offshore trust tax rules were updated on July 24 this year. The report also said that if the founder's liquidity needs were the issue, Viva using group cash and borrowing capacity to buy more Li Ning shares would appear counterintuitive. The company said fundamentals were weighed down by changeable weather in July, but it expects month-on-month improvement in August and sees 2026 profit margins potentially better than the market fears.