Li Ning Company Limited · HKEX:2331
Li Ning — H1 2005 Earnings Presentation
28 slides from Li Ning's earnings presentation, August 2005
Slide 1: 2005 Interim Results
2005 Interim Results Corporate Presentation August 2005
Slide 2: Agenda
Agenda Financial Highlights Operational Review Market Analysis Future Outlook and Strategies Open Forum Page 2
Slide 3: Financial Highlights
Financial Highlights
Slide 4: Financial Summary
Financial Summary (RMB Mil) 2004 2005 Change Turnover 788.7 1,104.3 +40.0% Gross profit 361.5 530.6 +46.8% Profit before taxation 87.0 119.5 +37.4% Profit attributable to equity holders 54.9 78.3 +42.6% Basic EPS (RMB cents) 7.28 7.65 +5.2% Interim dividend per share (RMB cents) Nil 2.30 N.A. For th
Slide 5: Continual Turnover and Profit Growth
Continual Turnover and Profit Growth (RMB Mil) Turnover Satisfactory turnover and 2,500 2H profit growth mainly 2,000 attributable to: 1H 1,500 - Well defined and clear 1,089.4 1,000 756.8 brand promotion 500 1,104.3 strategies 519.4 788.6 0 - Network enhancement 2003 2004 2005 and expansion - A str
Slide 6: Sustainable Margins
Sustainable Margins Stable gross and net profit Margin Overview margins as a result of: - Strong product R&D 60% 16% added value to products 48.1% - Transformed from 45.8% 45.8% 12% controlling manufacturing 40% costs to deploying 7.2% 7.0% 7.1% 8% resources for the R&D of new products to offer 20%
Slide 7: Turnover Analysis By Product Categories and Brands
Turnover Analysis By Product Categories and Brands By brands By product categories: (RMB Mil) 1,200 (RMB Mil) 2004 2005 Change 77.8 1,000 Apparel 454.3 648.9 +42.8% 34.1 800 600 11.8 1,026.5 Footwear 238.1 366.8 +54.0% 400 754.6 507.6 200 Accessories 96.2 88.6 -7.9% 0 1H2003 1H2004 1H2005 For the 6
Slide 8: Turnover Analysis By Region
Turnover Analysis By Region Turnover Breakdown in 1H2005 (By Region) Beijing & Shanghai: 8.5% Northeastern region: 12.0% Beijing Northwestern region: 1.7% Northern region: 14.6% Shanghai Southwestern region: Eastern region: 7.9% 23.3% Central region: 11.8% International markets: 1.3% Southern region
Slide 9: Key Financial Indicators
Key Financial Indicators As at As at Change (RMB Mil) 31 Dec 2004 30 June 2005 Inventories 318.3 291.9 -8.3% Avg. Inventories Turnover (days) 112 97 -15 Avg. Accounts Receivables Turnover (days) 33 39 +6 Avg. Trade Payables Turnover (days) 77 65 -12 Short-term Liabilities 40 9 -77.5% Long-term Liabi
Slide 10: Review of Operations
Review of Operations
Slide 11: Strategic Alliances with World Leaders
Strategic Alliances with World Leaders Fostered alliances with leaders in their respective fields Branding and Joined hands with NetEase to establish a Marketing dedicated sports channel named “Li Ning- NetEase Sports Channel” for the promotion of sports and the “Li-Ning” brand Entered into a 3-year
Slide 12: Effective Marketing and Advertising Programmes
Effective Marketing and Advertising Programmes Page 12
Slide 13: Rapid Distribution and Retail Network Expansion
Rapid Distribution and Retail Network Expansion LI-NING brand 31 Dec 2004 Jun 30, 2005 change Franchised retail outlets 2,272 2,698 +18.8% Directly managed retail stores 117 115 -1.7% Directly managed concessions 233 245 +5.2% Total 2,622 3,058 +16.6% KAPPA brand (Disposed of in August 2005) Franchi
Slide 14: Well-received New Product Series
Well-received New Product Series An enriched product offering with a full range of specialised products for popular sports General Running Basketball Tennis Soccer sports Swarovski series for ladies Page 14
Slide 15: "RUN FREE" Spree
“RUN FREE” Spree Launched on 15 March, 2005 and soon became a hot item for customers “Sold-out” rate from mid March till end of May 2005, according to the E-POS system, was about 83.5% Page 15
Slide 16: Competitive Strengths
Competitive Strengths Extensive Unique market distribution and position and retail network diversified product range The leading sports brand in the PRC Abundant Professional sports marketing management and sponsorship resources team Page 16
Slide 17: Market Analysis
jp Market Analysis
Slide 18: Market Analysis by Segment
Market Analysis by Segment China Sports Goods Market by Segments 3rd tier and 2nd and 3rd tier Market growth others cities offer fuelled by exponential increasing growth potential consumption in the next few power and the 2nd tier years in China 2008 Beijing Olympics 1st tier Metropolitan 2003 2008E
Slide 19: Market Analysis by Product Retail Prices
Market Analysis by Product Retail Prices 2003 – 2008 Sports Goods Retail Price Analysis High End: >RMB 500 23％ 30％ 20％ 30％ Mid Range: RMB 200-500 57％ 40％ Low End：< RMB 200 RMB 14.8 billion RMB 50 billion Market size of branded sporting goods 2003 2008E Currently, low end products form the market m
Slide 20: Market Analysis by Sports Types
Market Analysis by Sports Types 2008 Sports Market Segment Estimates Driving Force in the 50,000 Sports Market Unit：RMB 100 Mil Running Basketball and soccer Sports population （’000 persons) 40,000 46 will continue to take the lead in the China Target sports market 30,000 Customers Increasing po
Slide 21: Market Overview
Market Overview With increasing GDP, rising sports population and growing sales network in China, the sports product market is expected to maintain robust growth in the next five years Sports footwear and apparel will form the top two largest market segments. Sales of these two segments in aggregate
Slide 22: Future Outlook and Strategies
Future Outlook and Strategies
Slide 23: Future Strategies
Future Strategies Sales Network Expansion Increase the number of retail outlets to a total of 5,000 Li-Ning outlets in 2008 Launch flagship stores at prime locations in metropolitan and 1st tier cities Enhance Product Development Establish own research and development team Collaborate with local and
Slide 24: New Store Image
New Store Image 4th generation Li-Ning store promotes a strong brand identity Page 24
Slide 25: Future Strategies
Future Strategies Strengthen brand awareness and loyalty Launch specialised footwear series Conduct advertising campaigns to increase mass appeal Capture business opportunities arising from the 2008 Beijing Olympic Capture the full potential of the network to maximise revenues and profitability Cont
Slide 26: Li-Ning Brand Business Strategies
Li-Ning Brand Business Strategies Core Products Footwear and Apparel Target Sports Five major areas: Running Basketball Soccer Tennis Fitness Geographical Brand building in metropolitan and 1st tier cities Markets Major revenue streams from 2nd and 3rd tier cities Pricing Positioned as mid
Slide 27: Vision, Mission & Core Values
Vision, Mission & Core Values Vision The world’s leading brand in the sports goods industry Mission Core Values Through sports, we inspire Integrity, professionalism, in people the desire passion, breakthroughs, and power to make and trust breakthroughs Page 27
Slide 28: Open Forum
Open Forum To know more about us, please visit the following websites: http://www.lining.com/ http://www.irasia.com/listco/hk/lining/