After The Stock Price Soared, Lining Still Broke The Net Interest Rate With Anta'S Market Capitalization 1/6 5%.

Li Ning Co's sales expenditure for offline stores accounts for 36.9% of the same period, while its R & D revenue ratio is only 1.9%, much lower than that of Anta's 2.9% and XTEP's 2.8%.

Sometimes, the rise and fall of listed companies is not much related to their performance.

In the first two months of the Li Ning Co (02331.HK) 2017 performance report, its share price soared to a maximum price of HK $8.73 in 52 weeks, and its market value soared by HK $7 billion in just forty days.

Since then, even though the company has disclosed annual figures of net profit falling by 20%, it still can not stop the enthusiasm of the capital market.

Some analysts believe that Lining's stock price was popular at the beginning of its fashion week in New York.

The design of the retro wind, the striking "China Lining" logo, and the full exposure of the brand on the international stage, also made many people call for the rise of Chinese goods.

Traffic is money, and the rule of social networking is Lining's taste.

However, a stunning display on the New York show can make Nike and Adidas consumers in the Chinese market look up and down and "jump line" resolutely. The answer is No.

According to a brand survey report released by RTG Consulting in 2017, Adidas and Nike are more popular than Chinese brands both in the Y generation (25~34 years) or in the Z generation (15~24 years old).

Of course, this conclusion is not surprising.

According to Lining's 2017 annual performance announcement, the company achieved operating income of 8 billion 890 million yuan in the whole year, and its revenue growth slowed down for three consecutive years, narrowed to 10.66%. The net profit for the same period was 515 million yuan, down 19.91% from the previous year.

Revenue growth or the impact of market warming, but the decline in net profit can reflect the real results.

This is Lining's third year out of deep losses.

In 2010, Lining's revenue was close to ten billion, and surpassed Adidas in one move to become China's second sales volume, second only to Nike.

According to the roadmap released by the company in the next ten years, it plans to surpass Nike as the first place in 2018.

In those years, Lining's audience was a loyal fan of Nike and Adidas.

It didn't last long. Because of the overly optimistic expansion after the Olympic Games, Lining, who suffered from inventory crisis, lost 1 billion 979 million yuan in 2012. In the same year, Anta's revenue exceeded Lining for the first time. Please note that the total market value of Anta sports has reached HK $106 billion 309 million, which is 6 times that of Lining.

After that, Lining welcomed strategic investor TPG to support management, but failed to effectively reduce losses. His founder Lining could only announce his return and set up a series of new strategies.

According to its latest performance announcement 2017, Lining is committed to building a consumer oriented retail business mode.

Through the improvement of products, channels and retail operation capabilities, the three pillars will create Lining experience value in all aspects.

Unlike those in Jinjiang who are accustomed to the wholesale mode and have a strong distribution channel, Lining wants to build their own brand competitiveness.

Today, with the upgrading of consumption and the growth of the middle class, Lining has never changed the target audience.

But the problem is that Lining, who wants to conquer foreign brand audiences, needs time before he can produce enough innovative products to attract consumers. Those who have ploughed three or four line cities in Jinjiang have not slowed down their pace, and have also increased their R & D and marketing expenses vigorously while making a big noise.

Lining, who wants to return to the first place in the local sports brand, is facing difficulties.

In response to the above pain points, the investment Times reporter sent an interview outline to Lining's office. He did not receive a reply as of the day of issue.

Overhead charges

In China's local sports brand, the two schools are clear.

Among them, the Jinjiang faction represented by Anta, XTEP, and 360 degrees, started from the early workshop style shoe factories, and gradually developed and expanded, while the other group referred to Lining only.

After retiring from the position of "the prince of gymnastics", Lining created a sports brand named in his own name.

Distinctive personal characteristics, let Lining and other Jinjiang shoe enterprises effectively separated.

In contrast, Lining paid more attention to brand awareness, which allowed him to invest more in the operation of Direct stores.

According to Lining's performance report, in 2017, the total number of shops was 6262, of which the number of outlets was 1541, accounting for 24%.

A large number of Direct stores mean higher gross margins.

In 2017, Lining's gross margin reached 47.1%, second only to Anta, far higher than XTEP China and 31st degree.

But it also means a heavier burden, such as staff costs, store rentals, commissions, logistics expenses and so on.

According to its 2017 performance bulletin, the overall distribution expenses of Li Ning Co in 2017 amounted to 3 billion 273 million yuan, accounting for 36.9% of the total revenue, of which only 3 billion 252 million yuan was spent on the distribution of the Lining brand.

The report shows that the distribution expenses include rent, commission, logistics expenses, staff costs, depreciation of sales point assets, advertising and marketing expenses.

In recent years, Lining has been earning more brands such as AIGLE (Ai Gao), Lotto (Le Tu), Kason (Kai Sheng), Danskin, and spring labels, which can cover different consumer groups. However, in terms of expenditure, Lining's own brand still occupies a lot of resources, and its operating expenses for other brands are less than 1%.

"Investment times" reporter noted that its 2017 performance announcement shows that Lining brand contributed 8 billion 819 million yuan income to the group, of which sales revenue from direct stores accounted for 30.7%, that is, 2 billion 646 million yuan.

After deducting the advertising and promotion expenses of 981 million yuan in the distribution expenses, the distribution expenses for Lining brand are 2 billion 271 million yuan.

Therefore, after deducting the relevant distribution fees, according to the proportion of 1541 shops, Lining average annual gross profit of each direct shop is around 240 thousand yuan.

Another direct conversion, a single store gross profit of 20 thousand yuan per month.

Although there are other costs in the distribution expenses, the gross profit of each shop may be higher, but according to the expenditure details in the report, the total cost of land rent, staff costs and pport logistics expenses reached 2 billion 50 million yuan in 2017 in Lining.

This also explains that although the gross margin is higher, Lining's sales net interest rate is only 5%.

And this sales net interest rate is not only lower than the highest level of Anta 18.92%, but also lower than the 8.71% level of XTEP international.

Low R & D investment

Lining once said at the earnings conference that many brands are not the current strategy of Lining group, but will still be built around the core Lining brand in the future.

But in fact, Lining, who has strong brand, has not been effective in brand integration.

As early as 2008, Lining won the right to operate Lotto in Italy, but as of now, the business accounts for less than 1% of the group's revenue.

Compare BELLE's brand with BELLE's loss, and turn it into a profitable Anta.

If you want to rely on Lining's own brand, I still need time.

Besides, Lining is overseas.

It is also mediocre.

Experienced

Industry employees said that for Lining, if you want to get the Nike and Adidas consumers who have always been benchmarking, they need years of brand operation input and strong R & D investment. They need more innovative products like NIKE air cushion shoes.

It is far from enough to walk alone in fashion week.

In the 2017 performance report, Lining also indicated that he would continue to explore sports in the aspect of products, while stressing the brand's own professional sports attributes.

The combination of entertainment and leisure to enhance brand competitiveness.

Well, let's take a look at Lining's input in R & D.

In 2017, Lining spent 170 million yuan on research and product development, accounting for 1.9% of revenue, while Anta was 479 million yuan in the same period, accounting for 2.9% of revenue.

XTEP international R & D cost is 140 million yuan, but accounts for 2.8% of revenue.