Lining'S Declining Performance Is Still The Top Priority.

Lining, who once ranked second of Adidas's quarterly sales, has tasted the taste of roller coaster this year.

Recently, the Li Ning Co Ltd announced that its total volume of orders for Lining's products in the fourth quarter of 2012 was down by double digits.

Among them,

The order amount decreased by double digits; the order amount of service products fell more than 20%.; the annual new product order amount decreased from last year's high unit percentage.

According to the order meeting, Lining management expects sales in 2012 to be negative compared with 2011.

As one of the mainland's top five sports brands to announce the order this year, the performance of Lining is obviously less than that of Anta sports, XTEP international, 31st degree and PEAK sports. Its net profit may fall to the end of the year.

As the retail atmosphere is weak and international brands are starting to join this year

Lining's inventory pressure on retail channels this year is still grim.

Orders drop and cost rise

Peng Gangxiang, an analyst at Guotai Junan Securities, estimates that the value of orders in the fourth quarter of 2012 dropped by nearly 20%, much lower than expected in 2012.

"Due to sponsoring the Chinese men's Basketball League, the company expects that the cost of brand promotion will rise sharply.

The media reported sponsorship costs up to 2 billion yuan. In view of the company's current financial situation, we expressed concern about sponsorship.

In addition, the Li Ning Co also predicts that the cost of brand marketing and promotion will increase considerably. With the impairment of intangible assets of Lotto franchise business and interest on convertible bonds, the pre tax profit and net profit of the group in the first half of 2012 and the whole year will decrease considerably.

By contrast, the orders for orders in the fourth quarter of 2012, which had been closed by Anta, had dropped by a low double-digit percentage. However, the decline in aggregate orders in 2012 of the group's annual orders was only a drop in the percentage of high units.

At the same time, Anta store, which has been operating for more than a year, calculated that the same store sales growth in the first quarter of 2012 was only lower than the same period in 2011.

XTEP and 31st degree were strong and still growing.

Ding Shuibo, chairman and chief executive officer of XTEP's board of directors, revealed that the number of orders increased in the fourth quarter of this year. In 1-4 months, the same store sales also maintained a low number of units.

In the first quarter of this year, the same store sales grew by an average of 6.9%. The total number of orders for autumn and winter orders increased by about 2% compared with that of last year, and the total number of children's wear orders increased by 20%.

Stocktaking may be slower than expected.

Goldman Sachs analysts believe that the structural problems facing China's sports brands and cyclical problems of overstock of channels are worsening the industry. It is expected that trade data will remain disappointing in the next few quarters until cyclical resistance dissipates, but structural problems will still limit sales growth.

In this regard, Peng Gangxiang predicted that due to the weak retail atmosphere and international brands began to join the price war this year, the inventory of retail channels is slower than market expectations.

It is reported that the average inventory ratio is 31st month.

4.1 times.

PEAK chief executive and executive director Xu Zhihua said that the current inventory is being digested and the target is to solve the problem by the end of this year.

Ding Shuibo said XTEP's retail sales declined from the past 5-6 months to about 5 months.

Li Ning Co revealed that going inventory is still the primary goal this year. Li Ning Co does not want to add new inventory pressure to the retail side, and actively communicate with distributors and control orders.

From the present point of view, the retail side of the company is still not operating well, and the inventory is going on, but the speed may be lower than our original goal.

It is reported that the contents of Li Ning Co's inventory this year will include: reducing the pressure of new sell-in, building a clearance channel, and continuing to reclaim part of the old stock, and strive to reduce the inventory to a reasonable level by the end of this year.