Li Ning earnings soar 31pc as it adds more stores
Li Ning, the biggest mainland sportswear retailer, posted a 31 per cent jump in net profit to 945 million yuan (HK$1.07 billion) last year mainly due to expansion into second and third-tier mainland cities.
The company's revenue was 8.39 billion yuan last year, up 25.4 per cent from 6.69 billion yuan in 2008.
Shares of Li Ning rose 3.06 per cent, or 80 HK cents, to close at HK$26.95 before it announced the results yesterday.
Management said the sportswear market in the country proved to be challenging last year due to the financial crisis, intensified competition and the 'post-Beijing Olympic' effect that slowed the growth of the sporting goods industry.
But revenue for the firm's core Li Ning brand increased 21 per cent to 7.69 billion yuan during the period. The company attributed the growth to its expanded network in second- and third-tier cities and better retail operations management.
It operated more than 7,200 Li Ning brand retail stores in the country as of the end of last year, a net increase of 1,004 stores compared with 2008.
Meanwhile, the other two brands partly or wholly owned by the company - Double Happiness and Lotto - recorded revenue of 427 million yuan and 76 million respectively during the period.
About 47 per cent of its revenue came from clothing, 42 per cent from footwear and the rest from equipment and accessories.
Management expects a better growth rate this year as the order value for the first two quarters grew by 11.6 and 15.4 per cent, respectively.
Li Ning, which promotes itself as a professional producer - especially in badminton, running and fitness products - is still ahead of its rival Anta Sports, the number two local sportswear retailer, in sales. But the latter beat Li Ning in net profit.
Turnover at Anta was 5.8 billion yuan last year and the net profit was estimated at 1.25 billion yuan.
Li Ning recommended a final dividend of 22.54 HK cents per share.
Profit growth was due to expansion into second and third-tier cities
Revenue for the company's core Li Ning brand increased: 21%