Li Ning's two years of change still suffers from a huge loss of mire

Li Ning's Two-Year Transformation Still Struggles: A Deep Dive into the Challenges On November 18, 2014, at 10:26, Li Ning, the executive chairman of the company, reflected on his decision to step down from the Chinese National Gymnastics Team. "Gymnastics trained me and made me, but from a business perspective, this decision was good for the company," he said. His words not only highlighted his commitment to change but also hinted at the complexity of the company’s channel restructuring. Since 2012, Li Ning had announced major changes in its distribution strategy, aiming to revamp its operations. However, after two years of transformation, the company remained trapped in a cycle of losses, struggling to turn things around. According to the semi-annual report, while gross profit margins improved slightly, the company’s net loss for the first half of 2014 surged to 586 million yuan, up from 184 million yuan in the same period the previous year. The de-stocking process, which had been ongoing for over two years, continued to weigh heavily on the company. A report by the 21st Century Business Herald, based on WIND data, revealed that Li Ning had the lowest inventory turnover rate among Hong Kong-listed sports brands. Additionally, the company’s financial risks were concerning, with its equity ratio far exceeding industry standards. Despite increased revenue and gross profit, the company still posted a significant net loss. The main factors contributing to this performance included high inventory levels, bad debt provisions, and rising labor costs. As of June, Li Ning’s inventory reached 1.089 billion yuan, nearly matching the peak in 2012. The inventory structure showed a rise in finished goods, while raw materials and semi-finished products decreased slightly. After accounting for inventory write-downs, the final value stood at 1.09 billion yuan. Compared to peers like ANTA, Peak, Xtep, and 361 Degrees, Li Ning’s inventory turnover rate was significantly lower, at just 1.71 times per year. Jin Zhenjun, the executive vice president, mentioned that the company had reduced old stock by about 38%, with most items over two years cleared. However, new products were now making up 50% of the inventory, and the management believed they would drive future growth. Despite these efforts, market confidence remained low. After the release of the mid-year report, Li Ning’s stock price fell sharply, losing over 12% in a short period. International investment banks, including Citi and Goldman Sachs, downgraded their ratings, signaling growing concerns. Moreover, Li Ning’s financial health was also under scrutiny. Its debt-to-equity ratio reached 142%, far above industry averages. This raised further questions about the sustainability of its current strategies. Looking ahead, the road to transformation remains long. While some competitors, like Anta and Noble Bird, showed improvement, Li Ning’s progress was slower. The company’s strategic shift is expected to take three to four years, with the most challenging phase already behind it. However, analysts believe the reforms are only halfway complete, and full recovery may take longer than anticipated.

Charcoal Toothpaste

Charcoal Toothpaste,Whitening Charcoal Toothpaste,Dentech Whitening Toothpaste,Dentech Charcoal Toothpaste

Huai 'an Bst Trade Co., LTD , https://www.bstoral.com