Li Ning Company Limited saw turnover jump 24.2% to RMB 1.37 billion ($171.0 mm) for the first half. Turnover of the LI-NING brand rose by 32.8% to RMB1.36 billion ($169.9 mm). Sales of Li-Ning branded footwear were said to have risen 49.9% during the first half. The growth in turnover was attributable to rapid expansion of sales network, development of new products, enhancement in supply chain management, distinguished brand positioning and improvement in sales efforts.
Profit attributable to equity holders reached RMB 129.9 million ($16.2 mm), representing an increase of 65.9% over that of the same period last year. Basic earnings per share increased to RMB 12.66 cents (1.58 cents).
Commenting on the Groups impressive interim results, Mr Li Ning, Chairman of the Group, said, “During the first half of 2006, the Group continued to focus on its business
development strategies to reinforce brand awareness and loyalty, and infuse
professional and trendy elements in brand image. While proactively strengthening
product design, research and development, the Group also established long term
collaboration with internationally renowned institutions and brands. The Group also
embarked on a multi-brand expansion plan and recorded satisfactory growth in each
business segment.”
For the six months ended 30 June 2006, the Group developed and designed a number
of new products for its five target sports goods series, namely running, basketball,
soccer, tennis and fitness, and infused innovative and distinctive brand characteristics.
These products were well received by the market and successfully boosted product
sales. In addition, significant improvements in footwear product design, together with
increasing number of medium-priced products and reinforced marketing efforts, led to a
strong growth of 49.9% in LI-NING brand footwear sales. In spite of keen competition
from the aggressive expansion of overseas and domestic brands, an increase of sales
growth of 23.3% was achieved for LI-NING brand apparel products, while sales of
accessories increased by 28.3% as a result of optimization of product strategy during
the period.
The Group has established an extensive distribution and retail network with sales
outlets throughout the PRC. As at 30 June 2006, the Group achieved a net increase of
257 new LI-NING stores, bringing the total number of stores to 3,630. Furthermore, the
Group launched the 4th generation store image standards since the second half of 2005,
with an aim of establishing an international, professional and trendy image for the
LI-NING brand and enhancing store efficiency. During the period under review, the
Group operated a total of 736 stores using the 4th generation standards. As at 30 June
2006, the Group has opened a total of 21 spacious flagship stores featuring stylish
decorations.
During the period under review, the joint venture established by the Group and AIGLE of
France reported satisfactory business performance. As at 30 June 2006, there were a
total of 21 AIGLE outlets in the PRC. The Group will rapidly expand its sales network,
adjust its product portfolio and prices and organize large-scale brand promotion
activities for the AIGLE brand in the future, so as to expedite sales performance.
Mr Li concluded, “While consolidating our core LI-NING brand, we will continue to
implement our multi-brand business development strategy and proactively seek
opportunities for long-term cooperation with reputable international brands, so as to
further enhance its competitive edges and profitability for future growth. By leveraging
on the experienced management team, unrivalled competitiveness and prominent
corporate governance, we are committed to becoming the No. 1 brand in the China
sports goods market, offering our clients with quality and innovative sports goods and
generating lucrative returns to shareholders and investors.”
