(22 March 2006 – Hong Kong) – Li Ning Company Limited (“Li Ning” or the “Group”; stock code: 2331), one of the leading sports brand enterprises in the PRC, announced its remarkable annual results today for the year ended 31 December 2005.
Fuelled by strong economic growth, increasing affluence and consumption power, as well as the increasing popularity of sports activities driven by the 2008 Olympic Games, turnover of the Group for the year ended 31 December 2005 surged by 30.5% to approximately RMB 2,450.5 million. Gross profit margin increased by 0.5 percentage points to 47.0%. Profit attributable to equity holders grew by 52.6% to approximately RMB 186.8 million. Basic earnings per share was RMB 18.25 cents (1H2004: RMB 13.78 cents).
The Board of Directors recommended the payment of a final dividend of RMB 5.00 cents per ordinary share for the year ended 31 December 2005(2004: RMB 4.57 cents). And an interim dividend of RMB2.30 cents per ordinary share was paid for first half of 2005 (1H2004: nil).
Commenting on the encouraging annual results, Mr Li Ning, Chairman of the Group, said, “The Group made remarkable strides on all fronts in 2005. During the year under review, we placed strong emphasis on three major aspects, namely branding, strengthening product design, research and development, and improving supply chain management. We are pleased to see that our efforts paid off and are evident in our annual results.”
The Group continued to enrich its product portfolio with a series of new products for popular sports activities such as running, basketball, soccer, tennis and fitness. Sales was boosted by the broadened product offering, enhanced product design, optimum pricing for quality products as well as dedicated marketing efforts. The sales value of footwear and apparel products increased by 54.0% and 26.1% respectively. Sales of accessories, however, declined by 6.1% as compared to 2004, mainly due to de-emphasis of the product category as resources were reallocated to footwear and apparel products which generate a higher return on a per square metre basis.
With respect to the retail and distribution network, the Group added 751 stores net in 2005, bringing the total number of stores to 3,373 as at 31 December 2005. In order to further uplift store image and efficiency, the Group launched the 4th generation store image standards in the second half of 2005. During the year under review, there were a total of 98 stores decorated with the 4th generation standards. Moreover, the number of flagship stores reached 14 by last year.
The Group has a team of highly competent product development and design professionals in place. In addition, the Group fostered cooperation with international partners in a bid to develop professional and fashionable products of world-class quality. In the first quarter of 2005, the Company launched the “RUN FREE” ultra-light air-flow running footwear series in the PRC made with ultra-light technologies that were developed in-house. Moreover, the “TOP GUN”, ”SHARK” and ”FEIJIA” series of basketball shoes launched in 2005 were well received by consumers. Besides, the Group signed an agreement with NBA player Damon Jones of the Cleveland Cavaliers. He is now wearing LI-NING’s FEIJIA (Flying Armor) series basketball shoes on NBA courts. This attests to the superior quality of Li Ning’s sports shoes for top-tier professional players.
Last year, the Group embarked on a multi-faceted branding programme. Alliance and cooperation with world leading brands of various industries, such as NBA, Swarovski, Netease, as well as CUBA basketball leagues were established. Through diverse brand building activities, the Group enhanced its brand influence and customer loyalty.
Another major step of the Group in year 2005 is marked by a long-term agreement with AIGLE International S.A. of France (“AIGLE”) to establish a joint venture, in which both sides own 50% shares. Such cooperation targets China’s outdoor products market. As at February 2006, there are already 3 AIGLE stores in operation.
In March 2006, the Group announced an official marketing partnership agreement with the Association Tennis Professional (“ATP”), the world’s premier men’s professional tennis tournament association. Under the agreement, Li Ning will collaborate with ATP on the manufacturing, sales, brand promotion and marketing of professional tennis products in China. The two parties will also work hand-in-hand for the promotion of tennis tournaments to accelerate the popularity of the sport in China.
The Group has a team of highly competent product development and design professionals in place. In addition, the Group fostered cooperation with international partners in a bid to develop professional and fashionable products of world-class quality. In the first quarter of 2005, the Company launched the “RUN FREE” ultra-light air-flow running footwear series in the PRC made with ultra-light technologies that were developed in-house. Moreover, the “TOP GUN”, ”SHARK” and ”FEIJIA” series of basketball shoes launched in 2005 were well received by consumers. Besides, the Group signed an agreement with NBA player Damon Jones of the Cleveland Cavaliers at the beginning of 2006. He is now wearing LI-NING’s FEIJIA (Flying Armor) series basketball shoes on NBA courts. This attests to the superior quality of Li Ning’s sports shoes for top-tier professional players.
Last year, the Group embarked on a multi-faceted branding programme. Alliance and cooperation with world leading brands of various industries, such as NBA, Swarovski, Netease, as well as CUBA basketball leagues were established. Through diverse brand building activities, the Group enhanced its brand influence and customer loyalty.
Another major step of the Group in year 2005 is marked by a long-term agreement with AIGLE International S.A. of France (“AIGLE”) to establish a joint venture, in which both sides own 50% shares. Such cooperation targets China’s outdoor products market. As at February 2006, there are already 3 AIGLE stores in operation.
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