Hot Spot: Revealing The Key Direction Of Lining'S Work In The Next Few Years

Recently, Lining, 53 years old, appeared with Ceng Huafeng, chief financial officer of the company.

Performance press conference.

Compared with previous times, this time Lining's bottom line was even more, because Li Ning Co, which had been losing money for three consecutive years, finally made profits in 2015.

The annual report shows that Li Ning Co's annual revenue in 2015 was 7 billion 89 million yuan, up 17% compared with 2014, while operating loss in 2014 was 643 million yuan.

In the case of the overall gross profit margin remained stable compared with 2014, the decline in operating costs made Li Ning Co's consolidated profits rise sharply.

The time has come back to 2010. That is the peak period since the founding of Li Ning Co. The turnover has risen to 9 billion 478 million yuan in that year. It is only one step away from the 10 billion mark.

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But it didn't last long. The sudden winter of the industry caused a fatal blow to Lining. During the 2012-2014 years, the losses of Li Ning Co were 1 billion 980 million yuan, 390 million yuan and 780 million yuan respectively, totaling over 3 billion 100 million yuan.

At the end of 2014, Lining regained the power of the company, and then the "savior" Kim Chun Jun was dismissed.

Looking back now, Ma Gang, an independent analyst in the clothing industry, said that Jin Zhenjun's "Three Focuses" focusing on sports, focusing on retail and focusing on the Chinese market were all right.

"The industry as a whole is getting warmer and the cost of the past three years has been apportioned. Li Ning Co's profit making should be taken for granted.

Many people would think that this is Lining's credit, but in fact, Kim Chun Jun has laid a good foundation for the company's losses, including the increase of Direct stores and other initiatives.

Ma Gang believes that in fact, Kim Chun Jun has done a lot of effective work before, and the financial report failed to truly reflect his contribution to Lining.

Similar to Vic's old boss, Lining has been learning from Lei Jun and other Internet thinking experts in the past year. With the rise of the new round of fitness craze in the whole country, the intelligent hardware device developed by Li Ning Co has gained a good development space.

Public information shows that Lining and millet eco chain company, the two elements of the company to cooperate with the company.

400 thousand sales have been achieved.

First profit in recent four years

In the 2015 fiscal year, Li Ning Co's annual revenue increased by 17% to 7 billion 89 million yuan and net profit 14 million yuan.

Compared with the loss of 643 million yuan in 2014, Lining's national brand seems to return to the right path.

Benefiting from a more balanced channel expansion, Li Ning Co's revenue from retail, wholesale and e-commerce business has achieved double-digit growth.

Last year, Li Ning Co increased the sales and profitability of direct outlets, strengthened long-term cooperation with channel partners, and expanded the electricity business to increase gross margin and expense ratio.

Earnings data show that in 2015, Li Ning Co's sales network expanded, and by the end of the year, the sales point increased by 507, the total number was 6133, while the dealer sales point increased by 194. The sales volume of Lining brand products in the entire platform (including electricity suppliers) also increased.

At the same time, backlog stocks have also been improved. In the case of a net increase of 313 outlets, the stock value of Li Ning Co is still reduced by 20%.

Lining pointed out that the group's sales network has expanded, and this year plans to add 300-500 sales outlets, half of which are proprietary stores.

He mentioned that its electricity business accounted for 8% of revenue last year, and its target will increase to more than 20% in the next 2-3 years.

Although the first profit has been realized after three years of continuous losses, Lining's outlook is still not optimistic.

The first profit came from the net proceeds from Lining's 10% stake in the red double happiness brand.

In October 25, 2015, Li Ning Co announced that it would sell a 10% stake in red double happiness and generate an income of about 125 million yuan.

Li Ning Co's share of red double happiness dropped from 57.5% to 47.5%, still the biggest shareholder of red double happiness.

Ceng Huafeng, chief financial officer of Li Ning Co, said in a performance press conference that the sale of red double happiness will be completed in the first half of this year.

In the backdrop of the rebound of China's sports industry, besides Lining, Anta, PEAK, XTEP and 31st degree have all achieved growth. Net profit growth is generally over 20%. International sports Adidas and Nike have also made achievements in China.

Lining is very clear that the battle is not over yet. He is very tired at the performance press conference. "I don't see whether we can continue to make profits this year, but next year and the continuous profitability."

Lining is in power to clean old ministers.

Li Ning Co's successful turnaround is largely attributable to Lining's return to corporate management and a series of reform policies.

Lining himself went back from behind the scenes to the stage last three years ago.

In 2012, the domestic sports brand collectively spent the winter, plus Li Ning Co's original brand slogan, "anything is possible" changed to "let change happen".

This led directly to Lining Zhang Zhiyong, who worked for nearly 20 years, to take the blame and resign CEO.

At that time, Lining invited private equity fund TPG partner Jin Zhenjun to join the board of directors, and served as executive vice president, responsible for the internal affairs and operation of the group.

Subsequently, the two leaders together led a large-scale restructuring of the organization, and launched a cost of 1 billion 400 million -18 billion recovery plan.

In the face of Lining's strategic blur, personnel shock, weak product innovation and inventory accumulation, Jin Zhenjun put forward the strategy of "three steps", namely, in 6-12 months, we should focus on solving short-term problems such as inventory, cost, organizational execution capability, channel, focus on core business and improve sales efficiency. We should improve supply chain management, marketing and product planning mode in one to two years to consolidate the position of the company in the mainland market. 2 to 4 years, we need to pform our business model to improve retail efficiency and return on investment while meeting the consumer's brand experience.

Under the leadership of Jin Zhenjun, Li Ning Co expanded its direct business in 2012, accounting for 20.8% of its direct sales, and 38.3% of its direct sales by June 2014. However, he did not reverse the declining trend of the group.

Data show that during the 2012-2014 years, the performance of Li Ning Co has been in a state of loss, and the losses in three years were 1 billion 980 million yuan, 390 million yuan and 780 million yuan respectively, totaling more than 3 billion 100 million yuan.

At the end of 2014, with the return of Lining, Jin Zhenjun resigned as the acting chief executive of the company at the same time, but he remained on the board as executive vice chairman and executive director.

After Lining was re led, the brand slogan of the company was changed to "anything is possible".

Until July last year, the Li Ning Co announced that Jin Zhenjun resigned as executive director and executive vice chairman of the company for pursuing other business commitments, and the two were formally cut off.

Ma Gang, an independent analyst in the clothing industry, said that in fact, the revival plan launched by Kim Chun Jun was not ineffective, and the financial report failed to truly reflect his contribution to Lining.

"The industry as a whole is getting warmer and the cost of the past three years has been apportioned. Li Ning Co's profit making should be taken for granted.

Many people would think that this is Lining's credit, but in fact, Kim Chun Jun has laid a good foundation for the company's losses, including the increase of Direct stores and other initiatives.

Smart running Era

During the year of Lining's return, the biggest change of the company is the pformation toward the Internet direction.

At the beginning of 2015, Lining began to visit the business super group in Shanghai and Guangzhou with the channel team, including big Rd., Guang Bai and Shanghai Bailian, etc., and reached a number of channel cooperation agreements such as chain outlets, online and offline integration and sales.

Lining said: "we must create new products, new channels, new ways of operation and new experiences of Lining with entrepreneurial mentality."

Expanding e-commerce business is the focus of Lining's work in the next few years. In 2015, its e-commerce revenue rose by 95% year on year. Moreover, it has signed a strategic cooperation agreement with the Jingdong to provide the overall logistics solutions of the products to the stores by Jingdong and optimize the inventory and operation efficiency.

Lining disclosed that the sales volume of the mainland brand e-commerce channel increased from 4.9% to 8.6% last year, and he pointed out that the gross profit margin of the electricity supplier business was relatively high, and the profit generated by the Lining brand was two times that of the entity channel.

Lining believes that brands need to pform from traditional wholesalers to professional retailers, and there are still many changes to be taken into account. "In order to build a professional retail system, we only finished 30%".

Ma Gang believes that Li Ning Co's business channel is an opportunity. With its own offline channels, it can build an open platform in the future to form a nationwide sales network and distribute more products.

"Not only is Lining's product, but also other sports brand products, which is the value of Li Ning Co Internet in the future."

At the same time, Lining and Lei Jun's cross-border cooperation brought about not only product success, but also the strategic direction of Li Ning Co upgrading.

Last year, Lining and the millet eco chain company, Hua Mei technology, released two smart running shoes, which contained a smart core module developed by the millet Bracelet manufacturer, which is a variant version of the millet Bracelet "rice grain". The chip is installed in the corresponding position of the sole, which is similar to Nike's Nike+.

"Mobile Internet is exerting a subtle influence on people's way of thinking and consumption habits. People's expectations of commercial organizations providing commodity services are also changing.

Consumers' pursuit of leisure, sports and healthy new lifestyles brings a huge space for development.

The combination of brand and sports, creating user experience and creating Lining's value in sports will be the development strategy direction for the group in the future.

Lining said in a performance press conference.

Ma Gang analysts said that Lining hopes to connect consumers through intelligent hardware, and build a digital business platform based on consumers.

"Its Internet entry point is intelligent hardware, through intelligent running shoes, intelligent racket and a series of intelligent hardware, to seize the entrance of consumers, providing a continuous flow of sports, health related services.

The age of intelligent movement has just begun, and Lining is running ahead.

But maintaining the lead is not an easy task. What Li Ning Co lacks most is execution.