Sports Stocks Hit "Waterloo" In The Olympic Games, And Li Ning'S Market Value Has Evaporated By More Than 70% In Four Years

On August 8, 2008, Li Ning Feitian lit the torch of the Beijing Olympic Games, making the company price of stock Hit a new high of HK $18.24 along the way; Four years later, in the London Olympic Games, although the Chinese army still won 38 gold medals, it achieved the best overseas performance; However, as the main sponsor, Li Ning is no longer what it used to be. The management expects that this year it will record a loss for the first time since its listing, with its share price plummeting by 4% to close at HK $4.26, and its market value has evaporated by about 76% in four years.

Looking at all the sports goods stocks that announced their performance, it can be said that they are miserable. Li Ning's medium-term profit fell by 85%. The China Trend, which mainly sells Kappa brand, earned 57% less in half a year, and its net profit was less than 100 million yuan (RMB, the same below). Since the beginning of the year, the collective has underperformed the market, with Anta down 54%, China Trends down 52%, and Peak, 361 degrees and Li Ning down more than 40%. Inventory accumulation has led to a significant decline in overall industry profits.

By the end of June, the inventory cycle of Li Ning had reached 95 days, an increase of 23 days year on year; The increase in inventory balance resulted in a substantial increase of inventory provision by more than four times to 61.22 million yuan. By the end of June, the inventory turnover days of China Trends had soared by 179 days to 304 days, which means that the company needs nearly a year to clear a batch of inventory, seriously occupying the operating capital and causing product backlog.

Li Ning predicted that China sports goods The competition in the industry continues to intensify, and the competition of various sports brands for channels, sports resources and media resources is becoming increasingly fierce. Consumers also put forward higher requirements for brand and product value; It is expected that the industry will maintain a medium low growth rate in the next year.

Xu Zhihua, CEO of PEAK, stressed that the company's primary task at present is to clean up inventory. During the period, the company offered a discount as low as 3.9% to retailers, resulting in a year-on-year decline of 2.2 percentage points in gross profit margin. It is expected that the gross profit margin will continue to decline in the second half of the year. Ding Shuibo, chief executive of Tebu, pointed out that the whole industry is facing the challenge of high inventory, and the profit growth is far from bottoming out. It is expected that it will stabilize and recover until the second half of next year.

Zhao Xiao, an analyst at China Merchants Securities (Hong Kong), believes that the sporting goods industry has experienced a long-term "oversupply", and it is time to "repay the debt". Which company can face up to the problem first, clear up the inventory, and take the lead in recovery. Closing stores, declining revenue and low profit margin are only temporary pains. If you still blindly open stores at this time, you can only increase the future loss.

The reporter learned that Li Ning took the initiative to significantly reduce the number of orders in the first half of the year in order to clear up the inventory, thus reducing the inventory level. PEAK plans to transfer its inventory to overseas sales to alleviate overcapacity in the domestic market.

In addition, Li Ning Jin Zhenjun, Vice Chairman of the Group, revealed on the 23rd that 1200 inefficient stores had been closed in the first half of the year, and the closing rate was expected to slow slightly in the second half of the year. PEAK also reduced 747 retail stores to 7059, and the management said it would further reduce them to 6500. The company specially opened 165 stores against the market, decided to turn to children's clothing business for 361 degrees, and opened 300 more children's clothing stores in the year. (