BOC guest viewpoint verification: Li Ning (2331) call warrant 22219 out-of-money range narrowed from 16.7% to 4.8%, Niki's forward-looking deployment confirmed

$LI NING (02331.HK)$ BOC guest viewpoint verification: Li Ning (2331) call warrant 22219 out-of-money range narrowed from 16.7% to 4.8%, Niki's forward-looking deployment confirmed

Li Ning (02331.HK) has recently shown a strong upward trend in its share price, closing at HKD 22.3 on February 26, with a gain of 0.72%. The 10-day moving average is at HKD 22.02, the 30-day moving average at HKD 21.07, and the 60-day moving average at HKD 19.71. Multiple moving averages show a bullish alignment, with the 10-day line crossing above both the 30-day and 60-day lines, reflecting a clear strengthening in technical trends. In terms of technical indicators, the RSI is at 67, indicating buyers are dominant; Williams %R and Stochastic Oscillators signal 'neutral', CCI indicates 'buy', ROC and MACD signals both issue 'buy' signals. Overall technical indicator summary signals 'neutral' but with stronger bias, suggesting multiple indicators predict continued upward momentum. This article will combine the latest technical data, market news, and the January 20th [BOC Guest] viewpoint to provide investors with an in-depth analysis of Li Ning's short-term trends and explain in detail how to use warrants and bull/bear certificates to capture potential opportunities while reviewing recent product performance.

From a technical perspective, Li Ning is currently in a consolidation phase after a strong breakout. Regarding support and resistance levels, based on the latest technical data, Li Ning’s short-term primary support level is at HKD 21.2, which was the low during the mid-February stock consolidation period and is close to the 10-day moving average, providing some support. If this position is breached, the next key support level would be around HKD 20.1, where the 30-day moving average lies, also marking the top of the initial rebound platform. On the resistance side, the stock price is currently challenging the short-term resistance at HKD 23.6, a high since Q4 2025. A successful breakthrough at this level would see the next resistance at HKD 24.4, the top of the dense trading zone since mid-2025.

Correlation analysis between column views and recent trends

January 20th [BOC Guest] Hang Seng Index, Xiaomi, SMIC, Pop Mart, Zijin Mining, Li Ning, Midea

Reviewing the January 20th [BOC Guest] session with BOC International director Niki, she highlighted domestic demand sectors as a continuous focus for the market. The policy directions for 2026, such as trade-ins and consumption subsidies, will remain key topics. She analyzed that given increasing export risks and rising costs, the market will shift more towards domestic demand, or the 'internal circulation' trend, benefiting well-known mainland consumer brands like Li Ning, Midea, and Mengniu, which investors should closely monitor.

Niki specifically recommended Li Ning’s warrant product – BOC call warrant 22219, with a strike price of HKD 23.33, expiring around mid-May this year, offering about 6x leverage. She pointed out that if Li Ning's stock price rises to around HKD 23, this product will transition from slightly out-of-the-money to in-the-money, amplifying the leverage effect significantly.

BOC Call Warrant 22219 $BILININ@EC2605B.C (22219.HK)$ Performance Review:

Since Niki recommended it on the program on January 20, Li Ning’s share price has risen from around 20 yuan to 22.26 yuan on February 26, with a cumulative increase of about 11.3%. During this period, the performance of 22219 is as follows:

- Underlying stock performance: The share price rose from 20 yuan to 22.26 yuan, an increase of 11.3%

- Warrant performance: According to product review data on February 20, when the underlying stock rose by 2.00% over two days, 22219 recorded an 8% increase, reflecting a leverage effect of approximately 4 times. Cumulatively calculated from January 20 to now, the theoretical increase of 22219 should be significantly higher than the underlying stock, with a preliminary estimated cumulative increase of about 30-35%.

- In-the-money/out-of-money changes: On January 20, the share price was about 20 yuan, and the exercise price was 23.33 yuan, meaning out-of-money by about 16.7%; on February 26, the share price was 22.26 yuan, narrowing the out-of-money level to about 4.8%. As Niki expected, the product is transitioning from slightly out-of-money to in-the-money, with leverage effects gradually increasing.

- Maturity date status: There are currently about two and a half months until the mid-May expiration, and time decay remains controllable, providing ample time for the share price to challenge the 23 yuan mark.

Niki's forward-looking judgment is gradually being realized. As the share price approaches the 23 yuan level, 22219 is indeed at a critical stage of transitioning from out-of-money to in-the-money. If the share price successfully breaks through the resistance level of 23.6 yuan, the product will officially enter the in-the-money state, with leveraged explosive power expected to further manifest.

Market News: UBS Group Upgrades Rating, Boosting Sentiment

On February 26, significant positive news hit the market. UBS Group issued a report stating that it had upgraded Li Ning’s investment rating from 'Neutral' to 'Buy'. It expects first-quarter sales growth this year to accelerate significantly quarter-over-quarter, shifting from a low single-digit decline to a mid-to-high single-digit increase, mainly driven by the continued strong performance of the Glory series, new outdoor categories, and badminton and running shoe products. The bank noted that the drag from Li Ning's basketball and lifestyle fashion businesses is diminishing, as their contribution ratio has been continuously declining in recent years. UBS raised its net profit forecasts for 2025 to 2027 by 4% to 7%, increasing the target price from 21.8 yuan to 28.6 yuan. KGI Asia also reported immediate news that Li Ning shares rose 3.7% to 22.96 yuan, with UBS raising the target price by 30% and upgrading the rating to Buy. On the same day, Jefferies published a research report expressing a more optimistic outlook on China's sportswear industry, assigning a target price of 48 yuan and a 'Buy' rating to Li Ning. This major bank report provides strong fundamental support for the share price, resonating with the positive technical trend.

For investors looking to capture short-term fluctuations, derivative warrants are an efficient tool. Their advantage lies in allowing participation in the underlying stock's movement with less capital, while also enabling investors to choose suitable products based on their judgment of future market movements and timing. Derivative warrants offer a variety of terms, allowing investors to know key details like the strike price and expiration date beforehand, which aids in risk management. When deploying these products, it is crucial to closely align the terms with the support and resistance levels of the underlying stock.

Reviewing the product mentioned in this column on February 20, its performance over the following two days demonstrated the high sensitivity of derivative warrants. During that time, Li Ning’s stock rose by 2.00% over two days, driving the Morgan Call Warrant (24048) $MSLININ@EC2605A.C (24048.HK)$and the BOCOM Call Warrant (22219) $BILININ@EC2605B.C (22219.HK)$to record increases of 9% and 8%, respectively, fully reflecting the leverage characteristics of derivatives.

Warrant Product Deployment Strategy

In the current market environment, investors can select from the following products based on their market outlook. If optimistic about Li Ning maintaining its support level and breaking through the resistance at HKD 23.6, they may consider deploying call warrants. The HSBC Call Warrant (22268) $HSLININ@EC2605A.C (22268.HK)$ offers 6.4x leverage with a strike price set at HKD 23.31, approximately 4.7% higher than the current price, close to the first resistance level of HKD 23.6. This slightly out-of-the-money warrant has relatively ideal leverage and implied volatility, making it suitable for capturing the underlying stock’s breakout above the resistance level. The BOCOM Call Warrant (22219) provides 6.3x leverage with a strike price of HKD 23.33, also near the resistance level, with relatively lower premium. This was explicitly recommended by Niki on the January 20 program, and by February 26, its cumulative increase had significantly outperformed the underlying stock, making it a good choice for investors who remain bullish on the stock challenging the HKD 23 mark. The UBS Call Warrant (22224) $UBLININ@EC2605B.C (22224.HK)$ provides 6.17x leverage with a strike price of HKD 23.33, a premium of 11.92%, and implied volatility of 49.5%, also being one of the favorable choices.

#LearnWarrantsAndBullBearCertificatesWithJenny# Key analysis of 'in-the-money' vs. 'out-of-the-money' in derivative warrants. In-the-money and out-of-the-money describe the relationship between the warrant’s strike price and the underlying stock’s current price. For call warrants, when the strike price is below the current stock price, it is 'in-the-money'; when the strike price is above the current price, it is 'out-of-the-money.' In-the-money warrants contain intrinsic value, are more sensitive to stock price changes, but have relatively lower leverage; out-of-the-money warrants lack intrinsic value, offer higher leverage, but come with greater risk. Taking the aforementioned BOCOM Call Warrant (22219) as an example, with a strike price of HKD 23.33 and the current stock price at HKD 22.26, it is in a 'slightly out-of-the-money' state. As Niki pointed out, if the stock price rises to around HKD 23, this product will transition from slightly out-of-the-money to in-the-money, unleashing stronger leverage. Since its recommendation on January 20, the out-of-the-money degree of 22219 has narrowed from 16.7% to 4.8%, gradually moving towards being in-the-money. Investors should closely monitor whether the stock price can break through the HKD 23 mark. When selecting derivative warrants, investors should choose products with appropriate out-of-the-money levels based on their expectations of future market gains.

In summary, supported by positive technical indicators, UBS Group's upgraded rating, and anticipated domestic demand policies, Li Ning’s short-term trend looks strong as the stock challenges the HKD 23.6 resistance level. Investors should keep a close eye on the support level at HKD 21.2 and the resistance at HKD 23.6. If the stock can hold above HKD 21.2 and successfully break through HKD 23.6, further upside potential could open up, warranting consideration of bullish positions. Conversely, if the stock fails to surpass HKD 23.6 and falls below HKD 21.2, there may be downside risks towards HKD 20.1. When choosing derivative warrants, investors must consider their risk tolerance, compare the product’s strike price with these key technical levels, and understand the settlement rules for standard warrants to formulate a balanced trading plan.

Interactive Question:

Regarding the BOCOM Call Warrant (22219), which was recommended by Niki on January 20 with a strike price of HKD 23.33, the current out-of-the-money degree has narrowed to 4.8%. Do you think the stock price can successfully break through HKD 23 before its expiration in mid-May?

A. Yes, with technical and news factors aligning, the target is likely achievable.

B. No, strong resistance at HK$23.6, consolidation will take time.

C. Depends on earnings and market sentiment; staying on the sidelines is advisable.

Feel free to leave a comment sharing your choice and opinion!

Reminder to everyone: Follow Jenny’s Hong Kong stock warrants updates for more professional market analysis and product insights.

#Li Ning #02331 #Hong Kong Stocks #Technical Analysis #Support and Resistance Levels #Warrants #Options #In-the-Money and Out-of-the-Money #Domestic Demand Stocks #Sports Goods

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