Expected net profit was flat last year, Li Ning, a deeper investment of adjustment

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Economic Observer Online news article 17 January, the major domestic sports brand Li Ning (02331.HK) released 2010 results expected announcement that the company expected overall gross margin and net profit margin levels in 2009 considerable. Speaking of future prospects, the Li Ning, the company said, due to reform and improve the retail channel still needs some time to improve the environment, so in the future the company will develop into long-term competitiveness of the company to the next level of gross margin decreased by about 1 than in the past percentage points, operating margin and net profit levels declined.

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central bank said in a statement the company Li Ning, Li Ning brand in 2010 sales growth was close to the Chinese Sports goods industry overall growth rate, but due to changing market conditions, Li Ning's other brands (including DHS, Lotto (Lotto), Z-DO (new action), AIGLE (Ai H) and Kason (Kason)) Total revenue growth speed is low, will affect the Li Ning Company's annual sales growth overall. Li Ning Company expects the company's other brands in 2010 accounted for the ratio of the Group's total sales revenue with the 2009 rate.

announcement also said that in 2010, the company's overall gross margin and net profit level in 2009 is expected to be considerable.

2010 fourth quarter, Li Ning brand products, growth in same store sales growth over 2009 of approximately 3.6% over the same period, the annual growth rate of about 3.9% same store. As of the end of 2010, Li Ning has over 7900 stores the number of goals in the fourth quarter was approximately 22% retail discount.

Li Ning, the company said, due to the year 2010 is lower than the number of new stores opened early goals, while also testing and adjusting the Group's sixth generation of the new store image, store the number of rectification than in the past have reduce the group's stores have to save support costs in 2010, brand sales promotion expenses as a percentage of sales ratio of about 15%.

2011 will be held in the first half of Li Ning Li Ning brand in 2011 ordering the third and fourth quarters. In this regard, Li Ning Company anticipates that the channels of reform and improvement of the retail environment still take some time, the third and fourth quarters of 2011, orders will not be higher than the order growth rate of the level of the previous two quarters.

expected Ning, China sporting goods industry, the overall size of the market the next few years will continue to maintain a low double-digit growth, but the trend is quietly changing the industry business model is likely a significant change in the next five years ; different levels of the Chinese consumer market to increase, consumers will be the future trend of brand personality, there is greater demand for functional quality, the market will further differentiate into the mass market and infrastructure market; both raw materials and retail rents are rising fast, all these gave all sectors of the industry chain to bring tremendous pressure.

Therefore, the company will discuss the brand Li Ning, deep channels and adjust the product, targeting the mass market, to further increase brand investment, strengthen cooperation with large multi-brand dealers, distributors of low efficiency of integration to enhance retail efficiency.

brand Li Ning, the company will continue to strengthen investment in advertising and marketing materials to promote the ratio of cost of sales revenue will increase about 2 percentage points, and the company will continue to increase investment in human resources, labor costs expected to total sales revenue ratio also increased slightly. Therefore, the Li Ning Company expects future gross profit margin decreased slightly the future than in the past about 1 percentage point, the operating margin and net profit levels declined.

earlier today, to 17.00 Hong Kong stock opened lower on the morning show down the overall price trend. Accumulated over the past month the stock fell 23%.