Li Ning Sports Goods (2331) Chief Financial Officer Zhong Yi Qi said yesterday that the company ordering the 2010 first quarter just ended in July, the total amount of orders increased 11.6% over last year, including footwear average selling price rose 3.3%, orders An increase of 1.9% in volume; the average selling price of apparel products increased by 8.7% and the order volume increased by 7.7%. In addition, orders for the third and fourth quarters of this year appeared in a single order. The overall order book value increased by 12.7% and 14.5% respectively over the same period of last year. The annual capital expenditure was about 200 million yuan, of which the capital expenditure was 77.8 million yuan in the first half of the year.
Cheung Chi-yong, chief operating officer, expects the sportswear industry in the Mainland to grow by 14% this year and believes the increase will rise to 16% next year and is confident that the company's growth will be above the industry average. Due to the relatively low base in the second half of this year and the gradual warming of the global economy, we expect the Company's business growth to be satisfactory and the market share to expand further.
Interim profit 470 million liters 42%
Chung said the gross profit margin of the company dropped to 47.8% from 48.4% in the same period of last year, mainly due to the impact of the difference in brand positioning and discounts on some Lotto junk. This year, the Company's gross profit margin target of 46.5% to 47.5% and net profit margin of 10.5% to 11%.
In addition, benefited from the favorable sales growth, Li Ning recorded a profit attributable to shareholders of RMB 473 million for the six months ended June 30, 2009, representing an increase of 41.6% over the same period of last year. Earnings per share were RMB0.4555 and interim dividend was charged at 13.58 Minute. Turnover increased by 32.4% to RMB4.05 billion during the period. Operating profit increased to RMB686 million.
Focus on expanding second and third tier cities
During the period, the Li Ning brand remained the major source of revenue of the Company, accounting for 92.2% of the total revenue. Its revenue in the first half increased 24.5% to RMB3.737 billion. In the second half of last year, revenue from the new Double Happiness and Lotto licenses 2.19 billion yuan and 15.44 million yuan, accounting for 5.4% of the company's total revenue and 0.4%. By the end of June, the total number of Li-Ning-branded outlets reached 6,809, a net increase of 564 during the period, together with a total of 7,550 other stores.
Zhang Zhiyong said 82% of new stores opened in the second- and third-tier cities in the Mainland during the period, and these cities have more room for growth. Therefore, they will continue to focus on expanding the second and third tier cities in the future. The company expects to expand its "Li-Ning" store to 8,600 stores by 2011 and maintain the target of 10,000 stores by 2013. However, the flagship store in Singapore, which was opened in July, has been operating well. However, some of them are in short supply and their production and supply chains need to be further improved.