What Is Lining'S Need To Change Or Change His Company?

Just as

The slogan of 2331.HK (hereinafter referred to as "Li Ning Co") is that the company is constantly "Make The Change (let change happen)".

In just 3 months, two top Li Ning Co executives left.

In October 12th, the company announced that Zhong Yiqi, the executive director and chief financial officer (CFO) of the company, had resigned from office in pursuit of other career development and took effect from November 1, 2012.

During the pition period, Li Ning Co will be assisted by a consultant with more than 20 years of operation experience to assist the company in its financial work.

Three months ago, the Li Ning Co announced that Zhang Zhiyong, the former chief executive officer (CEO), resigned from July 4th, while TPG partner Jin Zhenjun served as executive director and executive vice president of the company. Su Jingshi, chairman of the China business division of Yum Sun Restaurant Group, is the independent non-executive director of the company. Before hiring the new chief executive, Li Ning Co will be led by the founder and executive chairman Lining, and Executive Vice President Kim Chun Chun.

In the early days of Zhang Zhiyong's departure, the market shouted "torture" Lining: "Mr. Li, do you think Zhang Zhiyong should leave?" just three months later, the market began to applaud the change of Li Ning Co management.

In October 12th, Li Ning Co's stock price did not fall, but it increased by 7.7% at a time, rising 3.43% to HK $4.8, a 3 month high.

In October 15th, the Li Ning Co announced its suspension at the HKEx, saying that due to stock price sensitive information, it will be announced.

A Hong Kong stock analyst told the newspaper that Lining would publish more information on personnel changes, and more TPG personnel would be allowed to enter Li Ning Co. TPG might also increase Li Ning Co shareholding.

In addition, he also revealed that Zhong Yi Qi left the Li Ning Co because of his disagreement with the strategic investor TPG of the company.

On the 15 day, the Li Ning Co media relations leader did not respond directly to the matter.

She said that no more information was released.

Goldman Sachs: changes in manpower will continue

In October 12th, Li Ning Co also announced that Li Hong, Secretary of the company, resigned from the Secretariat and took effect from October 15, 2012. Yan Huiyan was Secretary of the company.

Yan Huiyan has over 20 years' experience as a company secretary and is a senior member of the Chartered Secretaries and executive officers association of the United Kingdom and the Hongkong chartered secretarial Association.

After the resignation of Zhong Yiqi and Li Hong, he will continue to serve as a consultant for Li Ning Co.

"Since 2011, Li Ning Co

The backbone of the Ministry and other departments have left one after another.

Haitong international securities consumer stock analyst Wang Jingwen told the newspaper that at present, the internal management of Li Ning Co has not yet been stable.

When the management team is stable, the inventory clearance and channel rectification work can be carried out better.

It is understood that the company has not yet been able to find full-time CEO and CFO.

Since last May, Li Ning Co has resigned from several top executives, including the company's former chief brand official Shi Wei, chief operating officer Guo Jianxin, general manager of Wu Xianyong, the director of the Ministry of foreign affairs and public affairs, Zhang Xiaoyan, chief brand officer Xu Maochun, etc.

After the announcement of the resignation of CFO, many foreign investment banks issued a report and affirmed the information.

Goldman Sachs Gao Hua Securities released a research report that the current financial management team will focus on cost control and cash flow management, and expect more new appointments in the future because the company is restructuring.

The move represents the intention of Li Ning Co chairman and TPG to carry out company reform and develop potential brand value, positive for the long-term development of the company, however, it is expected that short-term movement will take place.

Sales revenue of dealers has not recovered significantly.

In addition, Deutsche Bank also issued a report which is basically consistent with Goldman Sachs's views and believes that the direction of the company's reform is correct.

TPG is currently the second largest shareholder of Lining, holding 13% stake, and now has 8 full-time senior administrators working in Lining, 2 of whom have joined the board.

Need for change

In the face of the drastic reform of Li Ning Co, the market was wait-and-see.

"This is not an overnight event."

Many analysts expressed this to reporters.

Mai Yaoquan, an analyst at Beijing Huashan, told reporters that at present, Li Ning Co still has many problems. Its core factor is that consumers do not recognize the brand, resulting in excessive inventory and the contradiction between the company and the distributors.

In the first half of 2012, Li Ning Co revenue was 3 billion 880 million yuan, a decrease of 9.5% over the same period last year. Net profit attributable to shareholders of listed companies was 44 million yuan, down 84.9% from the same period last year, and its performance declined sharply.

In order to clean up inventory, Li Ning Co shut down more than 900 branches in the first half of the year.

But the inventory situation has not improved.

In the first half of this year, the average inventory turnover period increased from 73 days in 2011 to 95 days.

In 2010, the figure was only 52 days.

"This is only the figure of the company. No one knows how much stock there is in the dealer."

An analyst who asked not to be named revealed that the negotiations between Li Ning Co and distributors were deadlocked because of mutual interests, which led to a repeated obstruction to the inventory process.

According to the reporter, dealers and Li Ning Co still have ambiguity in stock repurchase price.

Wang Jingwen believes that with the 2010, Li Ning Co reshaped

With the failure of the plan, the current Lining brand not only lost its original core consumer group, but also failed to attract the "90's" to become its target customers.

The internal control problem, the confusion of the dealer system and product positioning need a long time to rectify.

Wang Jingwen said: "although TPG has successfully helped Daphne solve the supply chain problem, the situation of Li Ning Co looks much more complicated than Daphne."