Is Lining Starting To Turn The Tables? Next Year'S Income Is 10 Billion.

Lining, once considered to ignore brand positioning and establish an effective emotional connection with target consumers, has begun to make all-round innovations in products.

After stunning appearance in New York fashion week, Lining also used an excellent pcript yesterday night to prove that domestic clothing is gradually rising.

According to the 2017 annual performance report released yesterday by Lining, 02331.HK of domestic sports apparel brand, the annual income rose 10.71% to 8 billion 874 million yuan, and gross profit increased 12.7% to 4 billion 176 million yuan over the same period last year, and net profit dropped 19.91% to 515 million yuan.

The core brand of the group, Lining, accounted for 99.4% yuan of total revenue, amounting to about 8 billion 818 million yuan, up 11.3% from the same period last year.

Despite declining profits, Lining's annual performance is still higher than expected. Today's closing share price soared more than 8% to HK $8.43 per share.

Market value reached a new high of HK $18 billion 369 million in 5 years.

By brand:

Lining, the main brand, recorded 8 billion 818 million yuan, accounting for 99.4% of the total revenue.

Other business pactions recorded 88 million 190 thousand yuan, accounting for about 6% of total revenue.

By Region:

Sales in China, including Hongkong, rose by about 10.6% compared to the same period last year, accounting for 8 billion 634 million yuan.

Other areas rose 16% to 239 million yuan over the same period.

By category:

Main brand Lining:

Footwear sales rose 5% to 4 billion 146 million yuan, accounting for 46.8% of total revenue.

Sales of clothing rose by 18.7% to 4 billion 172 million yuan, accounting for 43.8% of total revenue.

Sales of equipment / Accessories rose 8 to 501 million yuan, accounting for 5,8% of total revenue.

The total number of other brands dropped by 39.1% to 5472,4 yuan.

During the period, there was no Lining YOUNG sales point, and the total number of sales outlets in Lining in China totaled 6262, down 84 from the end of last quarter.

The total annual decrease was 178, of which retail and wholesale businesses were 70 and 108 respectively.

Self run children's wear brand Lining YOUNG business added 173 new outlets, while dealers reduced 7 to 32.

In 2017, known as the first year of the outbreak of children's clothing market, Lining rebuilt the original Lining KIDS and upgraded it to Lining YOUNG.

At the same time, 3-14 year old teenagers are targeted to target consumers. For different age groups, there are two product lines: 3-6 year old curious children and 7-14 year old dynamic juveniles.

Footwear products include running training, basketball and sports fashion.

The group said that the performance improvement in 2017 mainly benefited from three improvements, including notable increases in running and training categories, rapid development of the electricity supplier channel and higher sales growth for third consecutive years, as well as the strengthening of order management to control inventory.

It is noteworthy that the announcement also disclosed that Lining sold a 10% stake in red double happiness to a wholly-owned subsidiary of China in December 2016. In the 2016 fiscal year, red double happiness generated a net profit of 74 million 542 thousand yuan for Lining and about 313 million yuan of equity pfer related income.

Some analysts pointed out that although the performance of red double happiness has been good in recent years, it still has a big gap compared with the main brand's performance contribution. The sale of shares actually supports the pformation of Li Ning Co in order to replenish funds.

Stripped of the red double happiness to return to the main business, Lining has begun to brew a comprehensive "younger" change.

Founded in 1988, Lining, with his reputation as "Prince of gymnastics" and his understanding of the sports industry, quickly created the leading brand of the namesake movement in China.

Since then, the group's performance has climbed all the way. In 2003, Lining created a myth that sales volume entered the club of 1 billion yuan, and its share price went up from 2004 to 16.5 times in January 2008.

In 2010, Lining's market share in China once reached a peak of 9.7%, only 5% lower than that of the industry's first Nike.

With the increasing sales volume, the direct impact of brand ambition is overproduction.

This hidden problem has finally become apparent after the Olympic craze.

Since then, Lining has suffered losses for three consecutive years. The total amount is as high as 3 billion 100 million yuan. In 2012, Lining closed 1821 stores altogether.

Lining's dealer Baosheng international management has said that under the overall environment of the whole sports apparel industry, the double impact of inventory backlog and big sales promotion is an important factor causing the continuous decline of brand sales.

When the fall situation was almost out of control, Lining, who was retiring behind the scenes, decided to "come back again" after careful consideration.

In July 2015, Lining announced that he would take the lead in becoming a brand CEO and replace the former chief executive, Jin Zhenjun, who has not yet completed the task of losing money.

Lining first made a significant reduction in the number of franchisees and increased the proportion of Direct stores from the current 35% to more than 50%, so as to prevent a large number of backlog problems from appearing again, and then focused on products.

They opened iRun clubs in Beijing and Shanghai respectively, and opened the first running category store in Shanghai, integrating professional running equipment, running posture test and sports and social interaction.

But as Adidas, Nike and other international brands and celebrities jointly create a series of sports shoes, as well as the main market segments of women, fitness and other niche sports brands are sought after by the market. Lining realized that from stop loss to return to the leading position of the industry, we must adapt to the new trend of the current movement and fashion penetration.

In marketing, as early as the first half of last year, Lining opened the official Facebook and Instagram for the first time, mainly for publicity, including brands, products and market activities.

Lining also added sponsorship to Iran Tractor Sazi Tabriz FC football club, Indonesian badminton star Liliyana NATSIR, Tontowi AHMAD, Hendra SETIAWAN and Mohammad SETIAWAN, and in August last year, he signed a flexible contract renewal agreement with China Men's basketball Company Limited for 5 years and 1 billion yuan.

In order to win the love of the 90s, Lining took the lead in Chinese popular art GAI singer and actress to launch a series of sports shoes called "GAI unparalleled".

But what really caught the industry's attention is the launch of the new series of "enlightened road" as the theme in February 2018.

As the first Chinese sports brand to enter the international stage, Lining's first appearance attracted the attention of the media at home and abroad.

The series of "enlightened Dao" is the keynote of the main red, black and white tricolor. In its symbolic Huang Hong sportswear, it is integrated into oversize, Chinese character Logo and stacking. It is more abundant in fashion T-shirts and sweater. The designer used Lining's photo in gymnastics as a stamp.

And in marketing, it has changed the form of publicity in the past. Lining unveiled the whole process of the new series through micro-blog.

From the day before the show, the design details of the single product and the video produced by the combination of Chinese ancient architecture and fashion music have aroused suspense. To the synchronized broadcasting of the social media to the show, and the use of the afterglow of the show to uncover the whole series of creative ideas, we can see the brand's careful planning for the all-round marketing of video, picture, live broadcast and so on.

The fashion show came to an end and exploded the social media in an instant.

According to the fashion headline data, Lining's WeChat index has soared to 18934395 in 3 days since the series was released. The Japanese ring up to nearly 300%. In 4 days, the WeChat public number reported that the total exposure of Lining's New York fashion week was over 15 million.

Insiders pointed out that the sports brand has been controlled by Nike and Adidas, and tide card has been monopolized by foreign tide brands such as Wakubo Rei and supreme. Lining has been on fire in the new year of the dog, behind which is the Chinese consumers' time complex and the expectation of domestic clothing brands.

The integration of Lining and Tmall is an important part of brand channel pformation.

A few days ago, the "white cloud crane" series was sold out in a few days. During the double eleven period last year, Lining launched the slogan of "China's original creation", and the total sales volume was 215 million yuan.

Lining, the founder of the brand, said earlier that the pformation of the brand direction has basically been completed, and the new business mode of "Internet +" will be gradually formed in the future, and the brand image can be reshaped through the integration of new retail outlets under the online and offline businesses.

According to Credit Suisse, Lining's net profit from 2017 to 2019 will be 5.1 billion, 692 million and 912 million yuan, plus its own 2 billion 300 million cash and cash equivalents.

This has also led to the industry's speculation on Lining's first pursuit of Anta sports in the industry.

Relevant data show that Lining's price earnings ratio is 38 times, Anta is 30 times, but Lining's market value is only 15% of Anta, which means that Lining's existence is underestimated, and there will still be room for growth in the future.

In 2010, Lining's sales jumped to 9 billion 478 million yuan, only a step away from 10 billion.

This afternoon, Ceng Huafeng, chief financial officer of Lining, told sina finance, "the target of 2018 is to increase the number of units in China, and the revenue should be more than 10 billion."

This also means that next year Lining will probably enter the 10 billion club.

The rebound is corresponding to the tumbling market value. In February 7th, its market capitalization was only HK $12 billion 500 million, and it surged nearly 6 billion yuan in just 40 days, or nearly 50%.

In view of the recent sale of Puma, Lining has become a potential buyer of the latest speculation in addition to Anta.

Some people in the industry believe that the acquisition of Puma may be a competitive weapon for Lining to match Anta.