In Addition To Billions Of Revenue, Lining Also Used What Conquered The Capital Market?

In the fourth years since 2015, Lining finally achieved his "ten billion agreement" 9 years ago.

In March 22nd, Lining released the annual financial report for 2018. Data show that its revenue grew by 18.4%, the first time it broke through billions of yuan to 10 billion 511 million yuan, and its operating profit rose 74.4% to 777 million yuan, net profit increased 38.8% to 715 million, net interest rate increased from 5.8% to 6.8%, gross margin increased 1 percentage points to 48.1%, and operating cash flow grew to 44% to 44%.

In addition, the Li Ning Co plans to pay a dividend of 8.78 yuan per share, which is also different from the non dividend payment in the past few years.

Despite the billions of dollars in revenue, it was considered "a nail in the face" when it was announced half a year in 2018, but today the capital market has shown great enthusiasm for Lining's 2018 annual performance.

By the end of March 22nd, Lining's shares rose 11.4%, to HK $12.70, to HK $13.08 in intraday trading, the highest share price since 2012 in Lining.

Since 2019, Lining's stock price has risen 51.19%, and its market value is 27 billion 840 million Hong Kong dollars.

Li Ning Co shares in the past three months

Compared to the previous two years at the performance briefing session, several times said "dissatisfied". Lining chairman and acting CEO Lining seems to be in a good mood today. He made several small jokes on the spot speech and Q & A sessions, and frequently smiled, looking more relaxed than before.

This year, Li Ning Co put forward the strategy of "single brand, multi category and multi-channel" for the first time, which is somewhat different from the strategy of "single focus, multi brand and all channel" put forward by Anta in recent years.

Lining said to lazy bear Sports: "in 2018, we finally decided not to think any more. The most efficient is single brand, or we should enhance our own ability of each category.

Category is (directly to the consumer) needs to meet their real needs, you must understand this sport, understand buying groups, in order to integrate your ideas with products.

Dance of billions

Compared with 8 billion 873 million in 2017, Lining has a net growth of 1 billion 638 million yuan in total revenue this year.

According to the financial report, the growth of revenue in 2018 mainly benefited from three aspects: first, the rapid development of the electricity supplier channel, and the continuous increase in the proportion of income; secondly, the improvement of product and channel control and operation ability, the promotion of Lining's brand and product market recognition, the good sale of terminal sales, the double-digit growth of direct income and dealer's income; third, the excellent performance of basketball and sports fashion, and the children's clothing also received good market reaction, and the growth was obvious.

In 2018, Lining's clothing business grew by 26.8%, a net increase of 1 billion 125 million yuan, a total of 5 billion 316 million, and a boost in the proportion of clothing revenue from 47.2% to 50.6%.

Footwear business grew 10.6% to 4 billion 600 million.

Lining's clothing business has grown significantly.

Lining financial report said that in 2018, the overall growth of the company's terminal, the proportion of new product sales, the same store sales growth, the customer price and other retail indicators were continuously improved, and the Treasury sales ratio improved significantly.

In addition, the number of units in Lining's new line has increased, and the proportion of new products has increased by 2 percentage points.

In addition, thanks to the continuous increase in the proportion of e-commerce channel business with higher gross profit margin, the rise in sales discounts in self operated channels, the increase in sales of new products and the improvement in the cost ratio of the tag (partly due to the promotion of the tag price), Lining's gross margin increased by 1 percentage points to 48.1%, setting a new high of nearly ten years.

In 2018, compared to offline outlets and dealer stores, Lining's electricity business still contributed the highest growth rate, reaching 31.5%, the total amount reached 2 billion 217 million, accounting for 21.1%, up 2.3 percentage points over the previous year, a record high.

Among them, Lining first emphasized the continuous investment and layout of e-commerce in content marketing and event marketing, such as the successful design of the China Lining New York fashion week project by hand in hand with Tmall, redefining the culture of the national tide, and the introduction of the product line by the electricity supplier.

From a regional perspective, Lining grew significantly in Southern China and southern regions in 2018, up 36.1% and 31.7% respectively, of which the proportion of revenue in the southern region rose from 35.8% to 39.8%.

Lining's revenue in Southern China is 1 billion 260 million, accounting for only 12%, and there is huge room for growth.

In order to better manage South market, Lining set up the Southern China District in 2018 to achieve more accurate and fast operation of Southern China market. "Making our commodity planning, product design, and channel more in line with the market, we can make quick adjustments.

Now that we are just beginning, we will further improve our capabilities in Southern China and East China in the future.

Lining said.

From the point of view of the region, Southern China and the south are driving obviously.

From these data, we can see that Lining's overall retail efficiency has taken a step up in 2018, whether online or offline.

As Lining emphasized earlier in his interview with lazy bear sports, he cares about the new capabilities that Li Ning Co has accumulated over the past few years behind the sports fashion products that everyone is sure to win. Among them, it is very important to build up the retail mode and raise the efficiency of retail business.

As for the number of channels, as of December 31, 2018, there were 6344 stores in Lining's brand, including 4838 distributors, 117 more than in 2017, 1506 retail outlets, and a net decrease of 35 compared with 2017.

As for the reduction of Direct stores, Lining said to lazy bear sports, "because there is still continuous optimization, there are still inefficient shops and loss shops in the past. What is important to us is not quantity, but efficiency."

In 2018, Lining recorded a double-digit growth in the same store sales, and the gross profit margin of direct retail sales improved by more than 1 percentage points.

"The most important thing is the promotion of store efficiency, which is our most important KPI."

Lining group chief financial officer Ceng Huafeng said.

In addition, Lining is the only one of the four major brands in China, which has improved three data in terms of inventory turnover days, accounts receivable days and accounts payable days. At present, the 78 days' inventory turnover days are the best among the four major domestic sports brands including Anta, XTEP and 361 degrees, and the days of accounts receivable and accounts payable days are reduced by 16 days and 9 days respectively.

China Lining

Throughout the year of 2018, "China Lining" has always been the highlight of the whole Lining brand. Starting from the "China Lining" series of New York fashion week in February 2018, fashion movement and trend movement become Lining's new label.

In 2018, Lining gradually found a new path which is different from other domestic brands. The appearance, the foundation laid down and the extent to which the Lining brand can be helped will determine Lining's future strategic direction and development space.

Whether for Li Ning Co or market watchers, "China Lining" is a weathervane worthy of close attention.

Li Ning Co naturally knows this point. On the background plate of the conference, it is the main visual design of the latest "line" series of New York fashion week in 2019. Just like the first half of the year, the four big words of "China Lining" are placed prominently.

From the results, under the impetus of the star series of "China Lining", in 2018, the retail sports growth rate of Lining sports fashion products reached 42%, leading all categories of Lining (basketball growth rate 29%, training growth rate 20%). Lining himself described this achievement with "outstanding".

In the retail flow, sports fashion and basketball and running together accounted for 25% of the total annual sales of clothing, more than 5 million 500 thousand, and 6 months of new products sold out to 70%.

However, despite the bright performance of the whole sports and fashion category, Lining himself said at the performance briefing that the volume of the "China Lining" products that started just now is still relatively small. For the proportion of "China Lining" series of revenues, Ceng Huafeng, chief financial officer of Li Ning Co, said, "the proportion is very small and small, almost negligible."

By the end of 2018, there were 23 Lining stores in China, mainly concentrated in high-end and second tier cities. Among them, Shenzhen Nanshan Wanxiang store opened in November and the Shanghai Raffles shop opened in December, with an average monthly turnover of more than 1 million yuan.

According to data released by Ceng Huafeng, the price of Chinese Lining series is over 30% higher than that of traditional Lining products.

"In the past year, sports and fashion may be a lot of topics," Lining said in his business speech. "We combine sports with fashion and tide. This is also our innovative move. We created the brand concept of China Lining, which promoted the experience between sports and fashion, and made a good integration with the Lining brand and the current trend of fashion, and won the love and admiration of many young consumer groups.

In 2018, a large number of products were accumulated, and new channels were built. In 2019, they will be pformed into commercial profits.

In 2019, Li Ning Co plans to further expand the Lining store in China, with an initial expansion of 50, and plans to reach 100 in 2019.

Lining himself is full of confidence. "I feel that this part of sports and sports life may be more in line with the consumption of Chinese society at this stage. Maybe this will see more room for improvement."

In addition to the short term figures, the popularity, topic and attention brought by the popularity of the Lining Series in China are difficult to quantify in terms of brand power, brand value, communication with young consumers, and the improvement of employees' recognition of the company by Lining.

"Single brand, multi category, multi channel"

In addition to financial data, a new highlight of this earnings briefing is that Lining first put forward the strategy of "single brand, multi category and multi-channel". At the same time, Anta made the first brand of domestic brand tasted many brands, and triggered many brands in the past many years. At the same time, it started the multi brand operation, and Lining, who was holding the brand of Danskin and lotto, stepped on the brakes of "multi brand" in 2018.

"When a brand's core competencies are not mature, it is more inefficient to disperse and copy other brands, the greater the possibility of failure, and the more dispersed resources and energy, so that the team that is not very strong can be more dispersed."

Lining further explained, "we regard" single brand, multi category and multi-channel "as the core business strategy. I think this is more consistent with the long-term development of Lining.

Because Lining's sports genes and the accumulation of R & D, design and creativity, this foundation is very rare, and is conducive to the development of Lining brand in the future.

So we work hard on the single brand to run the main brand. This success rate is the highest.

The efficiency of our past two or three years has also proved that such a strategy is correct. "

While focusing on the Lining brand, Lining has repeatedly stressed that it is necessary to enhance the efficiency of revenue operation, and enter the market segments in basketball, comprehensive training, running, sports and fashion, and so on, and "treat every category as a business."

"In the past, it was very common to mention the brand. Now it is known that" China Lining "is an experience of sports and fashion. For example, speaking of Lining basketball badminton, you know what kind of experience it is, for example, speaking of Lining running, there is a unique experience of Lining running.

Invest in each category and integrate brand culture and brand experience through product experience, sports experience and purchase experience.

While Anta is striding forward with the strategy of "single focus, multi brand and all channel", Lining's "single brand, multi category and multi-channel" shows some differences in the current strategy of the two major Brand Company, and this is somewhat more implying.

In 2018, Danskin acquired by Lining had 14 stores in China.

For Danskin, Lotto and many other brands will be shelved, Lining said to lazy bear sports, "Shelved but will not become our focus."

The quiet business of children in the past two years has gradually improved in 2018.

Lining said that 2018 is the year of Lining YOUNG scale growth and meticulous management.

Lining YOUNG stores rose rapidly from 173 in 2017 to 793, with a net annual increase of 620, including the takeover of 361 authorized dealers in January 1, 2018.

In the earnings report, Lining said, "it is confident that the business of children will be promoted to a new height, and create a solid foundation for the continued expansion and continuous improvement of profitability in the future."

As in the past, Lining did not shy away from the company's current problems.

"In the past year, we have paid more attention to the Li Ning Co, we have seen some good progress, and the team has worked very hard. Of course, we have seen some results, but from my personal perspective, there is still much room for further improvement in the next year, including the efficiency of retail operation, and our net interest rate has increased from 5.8% to 6.8%, but there is still much room for development from the industry level.

The current net interest rate is not our ideal goal, and it will be improved qualitatively through product, channel, supply chain and retail coordination.

"We have laid the foundation for our efforts in the past three years in 2016, 2017 and 2018. I believe we will grow very healthily in 2019 and 2020."

In the past ten years, Lining, who has experienced a peak, has gone through a low ebb and recovers, is looking far ahead.

Today, Lining has expressed his ambition in a few ways: we want to be China's first, Asia's first and international leading sports brand.