Chinese mainland sportswear maker Li Ning Company saw its share
price soar 13.22 percent on the Hong Kong stock exchange on Friday after the
company reported its 2019 net profit more than doubled to 1.499 billion yuan
from the previous year.
Continuing to implement a strategy of “single brand, multi-categories, diversified channels,” the company’s revenue also surged, with a 32-percent increase year-on-year, with all sales channels recording revenue growth, beating market expectations
Continuing to implement a strategy of “single brand,
multi-categories, diversified channels,” the company’s revenue also surged,
with a 32 percent increase year-on-year, with all sales channels recording
revenue growth, beating market expectations.
The share price of Li Ning Co, which listed on the city’s bourse
in June 2004, closed at HK$22.70 on Friday, while the benchmark Hang Seng Index
put on 0.6 percent to 23,484.
Group Executive Chairman Li Ning, who founded the Li-Ning brand,
said the group has explored the brand’s implicit stories and reshaped its image
by effectively incorporating Chinese elements into its products with consumers’
enhanced confidence in ethnic culture which drove the revenue growth.
The company proposed a final dividend of 15.47 cents yuan per
ordinary share. The company paid a dividend of 8.78 cents yuan per ordinary
share in 2018.
Liu Ning Co has adjusted its investment for the now-postponed 2020
Summer Olympics in Tokyo, according to Kosaka Takeshi, joint chief executive
officer of the company. Takeshi joined the group in September last year after
serving as chief executive officer of Japanese fashion retail group Uniqlo.
Takeshi said, however, sporting events were not the main growth
driver in the company’s performance, and there’s no big impact on its
businesses. Nevertheless, the novel coronavirus outbreak has affected the
group’s offline business as shops have been shut since February.
He stressed the company has focused on increasing income, while
saving expenditure through online channels to ride out the storm. The company
would not rush to roll out clearance sales.
So far, 95 percent of Li Ning’s offline stores have resumed
operations and production capacity has mostly returned to normal, according to
Takeshi. He expects the company’s profit margin this year to climb by 10 to 15
percent.
Li Ning’s online and offline channels recorded a 20 to 30-percent
increase in retail sales in 2019, while same-store sales growth was up by 10 to
20 percent. The gross profit margin rose 1 percentage point compared to the
previous year.
The company’s e-commerce channel posted 40-percent revenue growth due to the
rapid increase in the number of online consumers. Its self-developed
“counterflow” product series – a line of premium-priced clothing and footwear
that came online – also contributed to the growth of the company’s e-commerce
business.
The number of Li Ning’s offline stores reached 120 at the end of last year, mainly in second or top-tier cities. The
company aims to expand the number of stores to between 170 and 200 by the end of this year, but it will depend on the progress of efforts made to contain the pandemic.
