Lining'S Orders Fell 2011 In The Two Quarter Of 6%&Nbsp; Sporting Goods Dealers Fled.

Fast growing Chinese Sports

Sports apparel orders weakness in the two quarter

Lining announced recently that in the second quarter of the 2011 quarter of, the average retail price of clothing and footwear products rose by more than 8%, and the number of orders decreased by more than 7% and 8% respectively. The total amount of orders decreased by about 6% compared with the same period last year.

Before that, KAPPA's Chinese operator in China also handed out a bad report card. China's trend in the second quarter of 2011 increased the order volume by 2.8%, much lower than the previous growth rate and market expectations.

Analysts pointed out that due to the pressure of distributors and retail sales and inventory, China's orders for the third quarter and the fourth quarter will not be ideal.

As for the declining trend of orders, Zhang Zhiyong, chief executive of Lining, said that this year, the retail environment of the sporting goods industry is obviously facing more pressure: on the one hand, the retail operation cost is rising rapidly; on the other hand, it is too dependent on distributors to open shops to promote growth.

Zhang Zhiyong also said that the next two quarters of 2011, the order situation may still be under pressure.

Sports brands are too dependent on distributors to open stores to promote growth, especially in the two or three line sports brands.

Liu Song, a sales director of a second-line sportswear brand, told the Beijing Morning Post reporter that most of the sports brand dealers rely on distributors to set up shop to promote their performance growth, and in the past two years the distribution speed of distributors has obviously slowed down.

"As far as I know, a large brand dealer has been withdrawn this year."

Liu Song said that the number of dealers is generally declining as a result of the double impact of rising shop costs and slowing sales.

Chinese sports apparel companies suffered setbacks in share prices.

Yesterday, Lining's share price fell sharply by 15.86% as a result of the decline in orders.

Affected by this, Chinese sports apparel, men's wear and footwear manufacturers listed in Hongkong were all dragged down, and other sports apparel stocks including Anta sports and PEAK sports showed varying degrees of decline.

In addition, investment banks have lowered the target price of Lining.

JP Morgan's latest research report pointed out that Lining's weak performance in orders in the second quarter of 2011 lowered the target price by 22.7% to HK $19.4.

DBS Gundam reduced the Lining target price from HK $33 to HK $22.90, reduced the stock rating from buying to holding, and reduced the expected return of Lining's 2011 fiscal year by 15%. "It is expected that sales of DBS will drop in 2011, and orders in the second half of the financial year will still be under pressure from the restructuring of the distribution structure."