Business Intelligence on Retailing, Franchising, and Consumerism in China

Li Ning's Profits Up 68.3% In The First Half Of 2008

According to LiNing's half year report, the company's business developed rapidly in the first six months of 2008 and its net profits increased by 68.3% to CNY333.7 million.

Chen Weicheng, CFO and executive director of Li Ning, said at a press conference that the good performance of the company was due in part to the 2008 Beijing Olympic Games. By the end of June 2008, the company had made revenues of CNY3.06 billion, a year-on-year increase of 60.3%. The average increase rate of the sales of its individual stores around China was 26% in the first six months and the average numbers rose to 43% during the Olympics with an even higher rate of increase of 51% in the six Olympic cities.

Chen said that Li Ning increased the prices of its products by 3% to 5% in the first half of 2008 and by another 3% to 8% price increase may be implemented in the second half of the year.

With four sports brands — DHS, Lotto, Aigle and Z-do — Li Ning owns 5,853 stores around China. According to the company's development plan, the number of Li Ning stores will be over 6,200 by the end of 2008 and the number will be further increased to 7,000 at the end of 2009. By 2013, the company is expected to have opened more than 10,000 retail stores.

In addition, the company plans to further extend its businesses in international markets. Although the revenue of Li Ning's international market increased by 57.7% in the first half of 2008, it still accounted for only 1.1% of the total revenue of the company.

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