The Stock Dilemma Is Not A Case Of &Nbsp; It Is A Common Problem In The Sporting Goods Industry.

　　 Lining, a sporting goods company in China, did not expect a big drop in performance last year.

　　 Lining The 2011 annual performance report released in March 29th showed that a number of financial indicators, such as income, gross profit and net profit, declined in different ranges. Net profit fell by 65.2% over the same period last year, to 386 million yuan, ranking the last place among five local sporting goods companies listed in Hong Kong.

According to the annual report, Lining's income last year was 8 billion 929 million yuan, a decrease of 5.8% over the previous year. brand Lining's income accounted for 91.4% of the group's total revenue, reaching 8 billion 165 million yuan, down 6.5% from last year.

As the market had expected, yesterday, Lining shares closed at HK $8.64, down 2.26%.

The four other local sporting goods companies that have already released annual reports, except for Anta and XTEP international, have declined in the other two PEAK sports and 31st degree net profits, while Anta's gross profit margin in 2011 also dropped by 0.5 percentage points.

　 Inventory dilemma is not a case

Lining acknowledged in the annual report that the company has increased the wholesale discount to dealers. In order to speed up the inventory clearing of retail terminals, Lining has recovered some old stocks from dealers. Last year, Lining opened 136 factory stores and 178 discount stores to clean up inventories.

According to the insiders, Lining's current development dilemma is not a case, but a common problem in the sporting goods industry.

Xiong Xiaokun, a light industry researcher at CIC, said that in 2011, there was a large inventory of sports goods brands. The lack of downstream sales Power slowed down its performance growth, coupled with rising costs of raw materials, manpower and warehousing, and the sinking of foreign sports brand channels led to intensified competition in the industry, resulting in squeezing the profit margins of enterprises.

　　 Stock The problem also exists in many enterprises. The average inventory turnover period increased to 45 days in the 6 months ended in December 31, 2011, compared with 19 days in the same period last year, and the inventory reached 451 million yuan as at the end of last year. The average turnover time of XTEP's stock was 63 days, compared with 50 days in 2010. Lining's average inventory turnover was 73 days, compared with 52 days last year.

　 "London Olympics or boost"

At the time of industry transformation, enterprises have slowed down the pace of development. Lining said in the annual report that the company also took the initiative to control the pace of opening stores in Lining stores in 2011. By the end of 2011, the number of shops in Lining regular stores, flagship stores, factory shops and discount stores reached 8255, with a net increase of 340 in the year, but most of them were used to clean up factory shops and discount stores. In 2011, the number of PEAK stores increased by 582, but in fact, the company had increased by 590 in the first half of last year, which means that PEAK had begun to reduce the size of stores in the second half of last year. Anta lowered its original target of 8200 to 7800 to 8000 last year. The speed of opening shop has decreased from 600-800 per year to about 600 per year.

Xiong Xiaokun believes that due to the fact that many brand enterprises are coming to the end of the inventory stage, the new round of development of enterprises will be on the right track. The concept of London Olympic Games may also promote the development of the industry.

However, Lining also said that the industry competition is still grim, and the pressure of rising costs remains. From Lining's first, second and three quarter 2012 Lining brand order meeting, the amount of futures orders in the first half of the year was about a low percentage increase, while the third quarter was a decline in the number of units per unit. Xu Zhihua, chief executive of PEAK sports, has also revealed that orders will be over in the first to third seasons this year, and the median to high digits will be reversed.