Lining Executives Face The "Hollow" State Of The Management Of The Earthquake Company.

As Li Ning Co Ltd (2331.HK, hereinafter referred to as "Li Ning Co") slogan, 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.

At the beginning of the market, the market shouted "torture" Lining: "Mr. Li, do you think Zhang Zhiyong should leave?" just three months later, the market began to applaud the changes in the management of Li Ning Co.

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 reporters that Lining will publish more information on personnel changes, and more TPG personnel may enter Li Ning Co. TPG may 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, the backbone of Li Ning Co's marketing department and other departments have been leaving.

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

Better management can be carried out if the management team is stable.

Clean up and channel rectification work.

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 corporate reform and develop potential brand value, positive for the long-term development of the company, but it is expected that in the short term

The sales revenue of dealers has not recovered significantly.

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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 the newspaper 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 number of the company's books. No one knows how much stock there is in the dealership.

"An analyst who declined to be named revealed that the negotiations between Li Ning Co and distributors were deadlocked because of mutual interests, which led to the repeated obstruction of 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 failure of Li Ning Co's plan to reshape the brand in 2010, the current brand of Lining not only lost its 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's.

"

Related reports: TPG shares to clean up management Lining executives hollow recently or end

According to sources, the adjustment of company executives is based on TPG's decision in management.

Following the resignation of CEO Zhang Zhiyong in July this year, Lining (02331.HK) was shocked again.

Recently, the company announced that Zhong Yiqi, director and chief financial officer of the company, has resigned because of his pursuit of career development.

In addition, Li Hong resigned as secretary of the company.

For Lining's executive turnover, a source close to Lining told reporters that Lining had disclosed the news of the company's high-level adjustment since July. This is the company's decision to introduce TPG in management after the introduction of TPG as a strategic joint venture.

In addition, another report said that the resignation of the chief financial officer Zhong Yiqi was mainly due to his disagreement with TPG.

Lining executives earthquake

Statistics show that in 2009, 4 months after the resignation of former chief financial officer Chen Weicheng, Li Ning Co appointed Zhong Yiqi as CFO, Zhong Yi Qi, a senior financial controller of DELL (China), and served as chief financial officer of customer service development department in Procter & Gamble (China), responsible for greater China.

It is understood that Zhong Yi Qi as CFO, Lining is remodeling the brand plan, in the face of market reshaping of the brand (return to the "post-90s"), Zhong Yiqi's consistent view is that

The decline is not a problem with Li Ning Co.

However, after three months of CEO Zhang Zhiyong's departure, Zhong Yi Qi can not help but follow suit.

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According to Lining, Zhong Yi Qi and Li Hongjun will serve as company consultants.

The company is consulting with the appropriate candidate for the new chief financial officer. During this pition period, a consultant with over 20 years of operation experience will help to lead the company's financial functions.

A source told the media that Zhong Yi Qi's departure is related to Jin Zhenjun, who is currently in charge of Lining's "internal affairs" of TPG China.

The source said Zhong Yiqi's role as CFO was greatly weakened in the package of spending cuts put forward by Jin Zhenjun for Li Ning Co.

And before Li Ning Co's performance is warmer, Kim will always be in charge of the internal management and operation of the company.

For Lining's high-level changes, another source said, Lining's personnel changes are not strange, next may have continued changes.

The source said that after TPG became a shareholder, Lining put forward a thorough reform plan.

Since May 2011, Lining, chief brand official of the brand, Guo Jianxin, chief executive officer Guo Jianxin, Wu Xianyong, general manager of Lotto business department, Zhang Xiaoyan, chief Wu Xianyong and CEO Zhang Zhiyong, resigned from the company's government and director of external affairs, and Zhong Yiqi has just resigned.

Top management vacancies

With the successive departure of Lining's core executives, the management of the company is "hollow".

Lining CEO and CFO are all vacant.

According to people close to Lining, he told reporters that Lining CEO is still looking for a candidate.

According to his introduction, Lining is looking for someone who is close to the company culture and has experience.

At the same time that Lining did not find out when to choose CEO, he heard the news that former CEO Zhang Zhiyong, who left Lining, acted as an independent director of the company.

The lack of senior management has brought some pressure to Lining and TPG.

However, when TPG entered Lining, it also increased the presence of senior executives.

According to available information, TPG, one of the largest private equity firms in the world, has become the second largest shareholder of Lining (holding 13% stake), and now has 8 full-time senior administrators working in Lining, 2 of whom are in Lining's board of directors.

In addition, there are rumors that TPG will have new moves to Lining, including the increase of Lining equity, but the news has not been confirmed.