Lining'S Equity Move Triggered Market Speculation

Through the paction of "left-handed right-handed".

The Li Ning Co will be indirectly managed by China's sports consultant management consulting platform, while the extraordinary China may also enter the sports related real estate industry in the future.

Extraordinary China takes the lead in Lining

Li Ning Co recently announced that the two largest shareholders of the company, Victory Mind and Dragon City, will sell the 266 million 374 thousand shares of Li Ning Co shares to the extraordinary China, accounting for 25.23% of the total issued share capital of the company, with a total price of HK $1 billion 400 million.

According to the announcement, it is not expected that this paction will lead to any changes in the business strategy, management and daily operation of Lining group.

The notice shows that the actual beneficiary of Victory Mind is Lining, and the actual beneficiary of Dragon City is his brother Li Jin.

The main shareholder of extraordinary China is also Lining and his brother Li Jin, who share 55.88% of China's two outstanding shares. After the completion of the equity paction, this proportion will increase to 70%.

China is a sports consultant and management company listed on the gem of the stock exchange.

Li Ning Co said that the main purpose of the two sides' cooperation is to expand.

The business philosophy includes the development of Sports Themed communities, and research and development of sports and surrounding property facilities with the government.

Lining enters the real estate industry again

In this regard, the industry generally considered that Lining is a signal to enter the real estate market.

Judging from the origins of Li Ning Co and the extraordinary China, this judgment began in August 2010. Lining announced that he had injected about 31% of his Li Ning Co shares into China, while buying Shenyang Industrial Park and eco city project. He plans to enter the real estate industry and combine sports with real estate.

At that time, the performance of Li Ning Co was gradually declining, and Lining's personal investment behavior was criticized by the market as being out of business.

The final acquisition was not approved by the stock exchange.

Since then, the two companies have not announced any other cooperative development plans. The extraordinary China once again proposed the acquisition of Lining shares. An industry insider said that the main purpose of the cooperation between Li Ning Co and the extraordinary China is to expand the business philosophy of the sports industry chain, including the development of sports theme communities, as well as research and development of sports and surrounding property facilities with the government, while Lining himself is very optimistic about the concept of "sports comprehensive community".

This may mean that Lining will enter the real estate industry again through this cooperation.

In this regard, sports Consulting Co., Ltd. CEO Zhang Qing said that the acquisition seems to be left-handed right-handed, but in fact contains strategic implications, many at one stroke.

"Extraordinary China involves the possibility of real estate business."

Brand analyst Xu Ning also believes that for Li Ning Co, after many changes last year, profitability has not changed significantly, so this time it is possible to enter the real estate market indirectly through extraordinary China.

It is urgent to boost the main business.

In addition, Lining's idea of discarding Li Ning Co's main business through the paction was once a clamour, but Zhang Qing thought that this possibility was almost not. Lining was a dream entrepreneur, and "the company and brand were named after him, how to give up".

However, in the development of sporting goods industry, Li Ning Co is still facing many difficult problems.

The first thing to do is the company's performance.

In the first half of this year, the company's revenue was 3 billion 880 million yuan, a year-on-year decrease of 9.5% and net profit of only 44 million yuan, a sharp decline of 84.9% compared with the same period last year, and the inventory problem of the company was also a headache.

In July this year, TPG, the US private equity fund, took the lead in Lining becoming the second largest shareholder of Lining, holding 13%. TPG has deployed 8 full-time senior officials to Lining, and two of them have entered the board of directors of the company.

At that time, TPG partner Jin Zhenjun defined 2012 as an important Li Ning Co.

The biggest goal is to reduce inventory.

Turbulence will also affect Lining's rapid development. Following the resignation of CEO Zhang Zhiyong 3 months ago, chief financial officer Zhong Yi Qi and Secretary Li Hong also resigned in the near future.

At present, the posts of CEO and CFO are still vacant, and more personnel changes are expected in the market.

However, Xu Ning believes that Lining's top priority is to determine the audience and product positioning of the brand, so that the product is accepted by more age groups. It is the key to determine Lining's brand positioning.