Lining Warms Up Second: The First 10 Billion Revenue In Fiscal Year, And Nearly 40% Net Profit Growth.

In the boom of domestic goods, Lining handed in a brilliant report.

In March 22nd, Lining, a Hong Kong stock listed company, released its 2018 financial year performance report.

As of December 31, 2018, the annual revenue increased 18.45% to RMB 10 billion 511 million yuan, and net profit increased 39% to 715 million yuan.

Prior to that, Li Ning Co's highest revenue was 9 billion 778 million yuan in fiscal year 2010. Today, the company has achieved a profit of 10 billion yuan for the first time.

The announcement shows that the growth of revenue is mainly attributable to the continuous rise in the proportion of electricity supplier channel revenue. "Although the growth rate has slowed down, it is still significantly higher than other business channels."

At the same time, both direct and franchise revenues have achieved double-digit growth.

Previously, the net profit margin of the four largest local brands has improved from 5.8% in 2017 to 6.8%, but Lining is still lagging behind compared with 18.5% of Anta and 8% of XTEP.

Driven by high premium products, the gross profit margin of the company increased by 1 percentage points to 48.1% in 2018, and gross profit increased 20.98% to 5 billion 53 million yuan over the same period.

According to the financial report, "the basketball and sports fashion categories that the company mainly invested in is excellent, and children's clothing also gains a good market reaction, an obvious increase over the same period."

By the end of 2018, the number of Lining sales outlets in China (excluding Lining YOUNG) totaled 6344, with a net increase of 82 in the year.

Among them, the retail business decreased by 35, and wholesale business increased by 117.

In addition, there are 793 sales outlets for children's wear brand Lining YOUNG.

In terms of the tag price, the Lining brand product orders have achieved a low growth rate of 10%-20% over the same period.

In the fourth quarter, same store sales increased by 10%-20%.

From the point of view of the channel, the number of units in retail and wholesale grew year by year, while the electricity supplier business remained strong, with the growth rate reaching 50%-60%.

Category sales, footwear sales accounted for 43.8%, clothing accounted for 50.6%.

During the period, Lining's average inventory turnover days dropped from 80 days to 78 days, and the best performance was in the four local brands.

On the cost side, the proportion of advertising revenue to revenue has dropped from 11.1% in 2017 to 10.4%, driving the total annual distribution expenditure down by 1.6 percentage points.

Lining's R & D cost has increased from 1.9% to 2.2%.

However, after the 2017 fiscal year, this proportion is still lagging behind in the local industry.

By contrast, the proportion of Anta, XTEP and XTEP reached 5.2%, 4.1% and 2.6% respectively.

During the period, administrative expenses rose by 0.7 percentage points over the same period.

Lining said that the cost of human resources increased significantly, mainly due to the upgrading of products and supply chain management, since the second half of 2018 has hired professionals in related fields, and motivate key positions.

Over the past year, Lining has become a frequent visitor to fashion week, and the "China Lining" label has been on the fashion week of New York and Paris.

In March 2019, the homemade brand appeared with the new New York fashion week debut at the famous Japanese shoe show "atmoscon Vol.6", becoming the first Chinese sports brand to enter.

Relying on fashion crossover, Lining breaks the inherent image of traditional domestic brands to a certain extent, and the trend of fashion is enhanced.

However, in his interview with first finance, Lining, the founder, stressed: "we are a sports brand. Tide brand is not the direction of Lining's development."

With the disclosure of Lining's financial report, the four big local brands have already issued 2018 fiscal year performance sheets - Anta, XTEP and 331 degree annual revenue of 24 billion 100 million yuan, 6 billion 383 million yuan and 5 billion 187 million yuan respectively. Anta continues to consolidate the number one status of domestic brands, and Lining is the position of the local two.

Recently, the sporting goods industry in China has launched the largest overseas acquisition in history.

Anta sports and the consortium of Chinese private equity fund founder capital, Lululemon founder Chip Wilson and Tencent successfully completed the takeover offer for Finland Amer SportsCorporation, and the two sides will enter the privatization stage.

With the advance of the acquisition, Anta group will further develop its brand strategy.

But Lining said that it would not expand business quickly through acquisitions. "Li Ning Co will develop various products and products based on its brand. From the group level, it will consider developing into multi category and multi brand, but it is still a brand of Lining rather than buying other brands."

In March 15th, Lining's stock price hit HK $12.14, a record high in the past 8 years.

By the end of March 21st, Li Ning Co's stock price has risen 39% this year, and its total market value is about HK $24 billion 900 million.