Lining Reverses The Decline Of The Company.

< p > 2012, the first annual loss of Li Ning Co since its listing.

In order to reverse the decline of the company, TPG, one of the shareholders of the private equity fund, arranged its Kim Jin-goon to Li Ning Co as its executive vice president in July 2012 and took charge of the company with founder Lining. In July 2012, Jin Zhenjun,

De Tai Group invested in Lining, Daphne international and Guanghui automobile, betting China's middle class consumer market.

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< p > < strong > the first annual loss since the listing is < /strong > < /p >.

< p > according to media reports, the famous campaign of China's team "a target=" _blank "href=" http://www.91se91.com/ "> clothing" /a "brand Lining announced in March 26th that the company lost about 2 billion yuan (US $3.22) in 2012.

This is the first annual loss of the company since its listing in 2004.

Reported that the company has been difficult to get rid of the brand positioning errors and inventory problems, the mainland China sportswear market fierce competition, recent adjustment has exacerbated these problems.

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< p > Lining brand is widely known in China. It is also one of the few world-class brands in China. It was founded by Chinese famous gymnast Lining and named after it. < /p >

Lining, chairman of the company P, said: "the market and industry are in poor condition. At least in the first half of 2013, the company's financial performance is expected to continue to face challenges."

In 2011, Li Ning Co made a profit of 385 million 800 thousand yuan; in 2012, its sales revenue was 6 billion 740 million yuan, down 24.5% from the previous year.

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< p > 2008, Lining became the torch bearer of the opening ceremony of the Beijing Olympic Games; the "Lining" brand gained a lot of popular support after the Olympic Games, and competed fiercely with Adidas for the second seats in the Chinese market; the two were in the Chinese market after Nike.

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< p > China's sportswear market has reached its peak after the Olympic Games.

Since then, Li Ning Co has been struggling to reduce the large inventory accumulated during the peak market: the discounted sales promotion has damaged the Lining brand.

Shenzhen Haitong international research (Haitong International Research in Shenzhen) sports a target= "_blank" href= "http://www.91se91.com/" > dress < /a > industry analyst Wang Jingwen (href=) said: in China, we all know that Lining brand low price and large sales volume.

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< p > part of the Li Ning Co's problems lie in the market environment: the slowdown in China's economy in 2012 has had a great impact on sportswear retailers, and Anta's local rival Anta has also been deeply affected.

Li Ning Co statement said: "China's sporting goods industry is experiencing the industry's most serious downward cycle.

Over the years, the expansion has led to the backlog of large stockpiles.

In turn, it affects the operation and profitability of retail stores. "

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< p > retail analysts said that in trying to upgrade the products, Li Ning Co made a mistake: to compete positively with foreign brands.

Such competition is an important test for the Chinese government's efforts to change the image of China's "cheap manufacturing base".

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Lei Xiaoshan (Shaun Market) of China Market Research in Shanghai, Shanghai, said that Lining had made a mistake: trying to sell products to everyone: whether they are 15 years old, or retirees.

Lining's product choices are too broad. They try to sell to everyone.

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Less than P, analysts also criticized Li Ning Co's recent decision to spend $100 million to hire Dwyane Wade as spokesperson: Li Ning Co has no retail stores in the United States, and Wade is not a household name in China. "Wade,"

According to analyst Wang Jingwen, from the earnings report, I don't think Lining has enough capital to run expensive sports events or hire high paying stars at this time.

These practices will not help to boost their short-term sales.

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< p > < strong > high level personnel changes frequently < /strong > < /p >

< p > Li Ning Co's recent development is not good enough. The company's personnel are also changing constantly: when Li Ning Co announced the personnel arrangement of Kim Chun Jun, he announced that Zhang Zhiyong, CEO of the company, resigned from the post. Zhang Zhiyong's senior statesman joined Li Ning Co in 1989 and will continue to serve as executive director of the company after resigning as chief executive officer.

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< p > August, Zhong Yiqi, chief financial officer, explained to the media why the company expected to lose. About 2 months later, the Li Ning Co announced that Zhong Yiqi had resigned from the position of chief financial officer in pursuit of other career development. The personnel adjustment came into effect in November 1, 2012.

A Hong Kong stock analyst who knows the inside story said that Zhong Yi Qi left the company and had different opinions about the company's introduction of de Tai Group as a strategic investor.

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< p > October 2012, Li Ning Co announced at the same time that the company secretary Li Hongci was appointed.

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< p > analyst Wang Jingwen said, "since 2011, the backbone of Li Ning Co's marketing departments and other departments have left."

Only after Lining's internal management team is stable can he better implement inventory clearance and channel rectification work.

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< p > < strong > > de Tai > /strong > /p >

< p > August 2012, Li Ning Co warned that the company may suffer a full year loss.

The reason for the expected loss is consistent with the reasons for the annual report: inventory backlog and slowing economic growth in China.

In June 2012, Li Ning Co issued an early warning that profits in 2012 would be "substantially reduced".

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Zhong Yiqi, chief financial officer of Li Ning Co, said at the time that one of the reasons for the loss was expected to be accounted for in the second half of the year by the company's expenditure on the London Olympics. P

At the London Olympic Games, Lining sponsored five Chinese team members and some other countries' athletes.

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< p > Li Ning Co said that the company has taken measures to control the cost and efficiency of new stores.

Since the end of 2011, the company has closed 952 brand stores, and the number of remaining stores is slightly more than 7300.

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In order to turn the Li Ning Co down, P TPG, a private equity fund of shareholders, arranges its partner TPG (Kim Jin-goon) to Li Ning Co in July 2012 as executive vice president and runs the company with Lining, the founder of the company.

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< p > Jin Zhenjun said reducing inventory is the number one priority of his job.

He said that Li Ning Co needs to make more efforts to reduce inventory in sales channels, especially when economic growth and speed drop affect domestic demand.

The main way to reduce inventory is to sell the old stock pfer discount stores at an ultra-low discount price.

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< p > April 7, 2013, Lining joined the electronic commerce company Vancl to hold the slogan of "48 hours promotion with a limited time rush to buy 19 yuan" and cleaned up a large number of stocks.

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Tang Shide (Torsten Stocker), a partner of consulting firm Monitor Group, agrees that loss is "an unavoidable part of Lining's adjustment process".

This shows that Lining is moving on the right road.

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< p > but Lei Xiaoshan said, "the bad performance of Li Ning Co should be attributed to the company's strategic mistakes to a greater extent, rather than the slow growth of the Chinese market as a whole".

He pointed out that in this highly competitive industry, "Lining has more serious inventory problems than other companies."

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< p > < strong > can we turn things around? < /strong > < /p >

In January 2012 P, the Tak Group and Singapore's sovereign wealth fund (GIC) injected $120 million into the troubled Li Ning Co to buy bonds that could convert to HK $7.7 per share: the paction was slightly higher than that of Li Ning Co's stock at that time.

In this paction, the convertible bond purchased by Tak Tai Group is about 88 million US dollars.

For Lining's board of directors, the investment of the two companies is more attractive than the normal borrowing. For the Tak Group and the Singapore sovereign wealth fund, it also won the veto on major financing. At the same time, Lining also promised that its debt could not exceed three times its profit before the interest rate, tax, depreciation and amortization (EBITDA).

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In January 2013 P, the German Tak Group and the Singapore sovereign wealth fund revised the contract rules for the purchase of convertible bonds a year ago.

In January, Li Ning Co announced the issuance of convertible securities of HK $3.5 per share, raising 241 million US dollars.

This is equivalent to Lining's stock price discount of 44% when it was not disturbed by relevant information in January 24th.

In addition, as part of the financing plan, the two investment institutions agreed to reconvert their original convertible bonds at HK $4.5 per share after renegotiation.

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< p > Li Ning Co did so mainly because by July 2012, the company's debt had expanded to 3.5 times the annual EBITDA and exceeded the scope of the convertible bond agreement.

Faced with such a negative situation, the Li Ning Co plans to issue new convertible bonds for financing under the subscription of detai group and its founder. However, in order to get the approval of two investment institutions, Lining has to reduce the conversion price of convertible bonds.

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< p > because the terms are unfair to other investors, other investors of Li Ning Co are voting with feet: when the stock closed in January 25th, Lining's share price fell by about 15%.

Reuters commented that "this behavior puts the interests of other shareholders behind."

Reuters commented that in the paction, the German Tae group seemed smart, but lowering the conversion price indicated that de Tai lacked confidence in Lining's turning around, though he had two seats in Lining's board.

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< p > in fact, Li Ning Co is only one of the bets of detai group on the fast-growing middle class consumer market in China. The other investment of detai group in China also includes low-end < a target= "_blank" href= "http://www.91se91.com/" > shoes < /a > distributor Daphne International (Daphne International) and China's largest automobile dealer Guanghui automobile (China Grand Auto).

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The three enterprises invested by the P group are all affected by the drop in consumer spending, of which Lining is the most serious problem.

People familiar with the matter said, "there are too many products.

In 2009, there were 30% excess inventories in the channel, and in 2012, "consumption decreased month by month."

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< p > Jin Zhenjun said that in 2009, the German Tae group injected capital into Daphne and led Daphne out of the predicament: during the two years (2009-2011 years) of Kim Chun Chun serving Daphne, Daphne shares rose 4 times, and sales increased 50%.

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< p > however, there are still doubts about the ability of Tak Tai to improve Lining's operation.

Alfred Young Alfred Ying, an investment banking analyst at Piper Jaffray, said: "while Kim Chun Jun served in Daphne, the company's performance has improved significantly, but this is mainly attributable to the economic recovery after the global financial crisis.

The actual changes in the company's management are not obvious.

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< p > from the previous data, the yield of the Asia Pacific Fund of Tak Tai Group is higher than that of its top products, the US fund.

In 2010, the Asian fund's asset appreciation range was between 40% and 50%.

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