Li Ning: Being washed up by capital on the channel

Li Ning: Everything is possible

Different people look at Li Ning and have different interpretations. Some people say it is dull. Some people say it is atmosphere. Some people say it is fickle. Some people say it is reserved. And it was presented to the public. It was once the classic story of “Adventure is possible” and overtaking Adidas. However, recently, it was caught in the chase of a latecomer and was struggling to cope with it. The other extreme.

For Li Ning, the largest sportswear company in China, 2011 may be a turning point.

With the Olympics, Li Ning surpassed Adidas in 2009 and became China's second-best second only to Nike Sportswear. However, the status has not yet had time to consolidate, suddenly look back, Adidas quickly struggling to catch up, the biggest rival in the domestic brand Anta is also forming a comprehensive catch-up trend.

The 2010 annual report shows that although Li Ning was ahead of Anta Sports by HK$7.408 billion in turnover of HK$9.479 billion, in terms of group profit, Anta was HK$1.551 billion far more than Li Ning’s HK$1.108 billion; operating margin, Anta’s 23.4 % is also higher than Li Ning's 16.3%; in terms of measuring operational efficiency indicators - average inventory turnover days, average receivables turnover days and average payables turnover days, Anta was 36, 19, 36 respectively, and Li Ningze It is 52, 52, 71. In terms of market value, Anta is about 35.8 billion Hong Kong dollars, Li Ning is currently about 15.8 billion Hong Kong dollars, the former is more than twice the latter.

And ten years ago, when Li Ning had become a famous brand in the local area, Anta was only a representative of Fujian grassroots clothing, which was hardly accepted by people.

The worse news came from the market. Under the general environment where the overall market grew by nearly 20% in the same period, Li Ning set a record for the worst orders for domestic sports brands in the second quarter of 2011, and the total value of orders fell by approximately 6% year-on-year as a result of wholesale and shipping calculations. The increase in orders ranks the last among domestic sports brand-listed companies, and market institutions are not optimistic about the prospects for the growth of the next two quarters. In 2011, Li Ning is expected to increase the number of stores to 8,500, and ANTA plans to reach the scale of “10,000 stores”.

The capital market seems to have lost confidence in Li Ning's future performance. On December 20, 2010, Li Ning’s stock price plummeted as a result of the agency's dramatic lightening of its position. Within a day, it fell by 23% and its market value evaporated by nearly HK$4.5 billion. This is the darkest time the Li Ning Company has experienced in the capital market since its listing in 2004. Among them, JP Morgan Chase reduced its holdings of 12.883 million shares at a price of HK$18.24 per share. At the same time, Li Ning’s target share price fell by 23%.

On March 17, 2011, at the 2010 annual report of Li Ning Company, Zhang Zhiyong, chief executive of the company, estimated that the average cost of Li Ning will increase by 20% in 2011, and double-digit increases in product prices will occur. Li Ning's stock price fell for 3 consecutive days, a drop of nearly 15%. As of May 18, 2011, Li Ning's stock price was 14.96 yuan, but not a year ago, Li Ning's stock price had approached 30 Hong Kong dollars.

What happened to Li Ning?

Although numerous dealers, former executives, and industry insiders interviewed, they almost unanimously agreed that Li Ning is a good company. Its brand accumulation, strategic planning, system operation, and even the company’s strict standards are all more competitive than the same period. Adversaries Nike and Adidas cater to the "appetite" of the Chinese people, and they are even more prominent than the chasing followers "Fujian Gang." However, on the other hand, the interviewees did not feel inconsistently that their pace of messy, brand swing and even marketing insufficiency, people are grimacing and angry.

Li Ning can also be said to be intertwined with contradictions: On the one hand, it was born and raised in the mainland, and it was deeply nationalized by the Chinese people. On the other hand, it has been trying hard to get rid of the shackles of this geographical brand and is committed to building an international sports brand image. This is an infinite glorious path for Chinese companies dreaming of internationalization. However, as it frequently adjusted the take-off mode and tried to leapfrog the internationalization of the gantry, we found that this company seems always difficult to sustain, and great strategies often hang in the air.

The journalist lasted for two months and interviewed Li Ning's distributors, former executives, sports brand counterparts and many others. He tried to start from a different perspective and restore Li Ning who is still on the road.

“I hope that Li Ning people can give me an explanation. Is it done or not?” On May 15, 2011, Li Tailin, distributor of Li Ning and general manager of Guangdong Maoming Hongda Sports Co., Ltd., told reporters that he was still angry. Hard to beat.

Xu Tailin’s resentment began at the end of 2010 with Li Ning’s "off-store turmoil." In 2010, prior to the 2011 Q2 trade fair, Li Ning revealed to the media that due to the company's decision to implement a strategic adjustment to “value-driven consumption,” it decided to shut down 500 to 600 stores with poor performance.

However, this information was soon interpreted as: "Li Ning's poor management, forced to close the store."