Li Ning Co LTD (2331)

Li Ning Co Ltd (2331)
Financial and Strategic SWOT Analysis Review
Report Code: GDCPG30975FSA

Published: May 2022
Li Ning Co Ltd (2331) - Financial and Strategic SWOT Analysis Review
Published: May 2022
Company Snapshot
No. 8 Xing Guang 5th Street, Opto-
Phone +86 10 80800808 Revenue 22,572.28 (million CNY)
Mechat
Beijing, BEJ Fax +86 10 80800000 Net Profit NA
101111 Website www.lining.com Employees 4,019
2331 [Hong Kong Stock Consumer Packaged
China Exchange Industry
Exchange] Goods
Company Overview
Li Ning Co Ltd (Li Ning) is a manufacturer, marketer, distributor and seller of sports goods. The company’s product portfolio includes
footwear, apparel and accessories for sport and leisure use. It operates through franchised, self-operated retail outlets and online
channels. The company markets products under own brand Li-Ning. Li Ning also distributes and sells various sports products which
are self-owned licensed, including AIGLE (outdoor sports), Double Happiness (table tennis), Danskin (fitness products for dance and
yoga) and Kason (badminton), which are operated through joint venture and associate with third parties. It operates a manufacturing
facility in Nanning, Guangxi.
Key Executives SWOT Analysis
Name Title Li Ning Co Ltd, SWOT Analysis
LI Ning Chairman Strengths Weaknesses
Li Qilin Director
Operational Network Geographic Concentration
Kosaka Takeshi Director
Financial Performance Huge Debt
Louis Koo Fook Sun Director
Wang Ya Fei Director
Source: Annual Report, Company Website, Primary and Secondary Opportunities Threats
Research, GlobalData
Share Data Online Retail Market in China Market Competition
Li Ning Co Ltd Global Sports Equipment Market Counterfeit Products Market

Share Price (CNY) as on 25-May- 50.65
2022
Source: Annual Report, Company Website, Primary and Secondary Research,
EPS (CNY) 1.58 GlobalData
Market Cap (million CNY) 132,563

Enterprise Value (million CNY) 141,555
Shares Outstanding (million) 2,617
Source: Annual Report, Company Website, Primary and Secondary
Financial Performance Recent Developments
Mar 18,2021 Li Ning Company announces annual results for
the year ended 31 December 2020
Source: Annual Report, Company Website, Primary and Secondary Research,
GlobalData
Source: Annual Report, Company Website, Primary and Secondary

© GlobalData 2022. This product is licensed and is not to be photocopied. Page 2

Published: May 2022
Table of Contents
Table of Contents ............................................................................................................................................................................... 3
List of Tables.................................................................................................................................................................................. 5
List of Figures ................................................................................................................................................................................ 5
Section 1 - About the Company ......................................................................................................................................................... 6
Li Ning Co Ltd - Key Facts ................................................................................................................................................................... 6
Li Ning Co Ltd - Key Employees .......................................................................................................................................................... 7
Li Ning Co Ltd - Key Employee Biographies ........................................................................................................................................ 8
Li Ning Co Ltd - Major Products and Services .................................................................................................................................... 9
Li Ning Co Ltd - History ..................................................................................................................................................................... 10
Li Ning Co Ltd - Company Statement ............................................................................................................................................... 12
Li Ning Co Ltd - Locations And Subsidiaries ..................................................................................................................................... 15
Head Office.................................................................................................................................................................................. 15
Other Locations & Subsidiaries ................................................................................................................................................... 15
Section 2 – Company Analysis.......................................................................................................................................................... 17
Company Overview .......................................................................................................................................................................... 17
Li Ning Co Ltd - Business Description ............................................................................................................................................... 18
Product Category: Apparel .......................................................................................................................................................... 18
Overview ................................................................................................................................................................................ 18
Performance ........................................................................................................................................................................... 18
Product Category: Equipment and Accessories .......................................................................................................................... 18
Overview ................................................................................................................................................................................ 18
Performance ........................................................................................................................................................................... 18
Product Category: Footwear ....................................................................................................................................................... 18
Overview ................................................................................................................................................................................ 18
Performance ........................................................................................................................................................................... 18
Geographical Segment: International ......................................................................................................................................... 18
Performance ........................................................................................................................................................................... 18
Geographical Segment: The PRC ................................................................................................................................................. 18
Target Markets ....................................................................................................................................................................... 18
Performance ........................................................................................................................................................................... 19
Geographical Segment: The PRC Market .................................................................................................................................... 19
Key Stats ................................................................................................................................................................................. 19
R&D Overview ............................................................................................................................................................................ 19
Li Ning Co Ltd - Corporate Strategy.................................................................................................................................................. 20
Li Ning Co Ltd - SWOT Analysis ........................................................................................................................................................ 21
SWOT Analysis - Overview ............................................................................................................................................................... 21
Li Ning Co Ltd - Strengths ................................................................................................................................................................. 21
Li Ning Co Ltd - Weaknesses ............................................................................................................................................................ 22
Li Ning Co Ltd - Opportunities .......................................................................................................................................................... 23
Li Ning Co Ltd - Threats .................................................................................................................................................................... 24
Li Ning Co Ltd - Key Competitors ..................................................................................................................................................... 25
Section 3 – Company Financial Ratios ............................................................................................................................................. 26
Financial Ratios - Capital Market Ratios .......................................................................................................................................... 26
Financial Ratios - Annual Ratios ....................................................................................................................................................... 27
Performance Chart........................................................................................................................................................................... 30
Financial Performance ..................................................................................................................................................................... 30
Financial Ratios - Interim Ratios ...................................................................................................................................................... 31
Financial Ratios - Ratio Charts.......................................................................................................................................................... 32
Section 4 – Company’s Recent Developments................................................................................................................................. 33
Mar 18, 2021: Li Ning Company announces annual results for the year ended 31 December 2020 .............................................. 33
Section 5 – Appendix ....................................................................................................................................................................... 39
Methodology ............................................................................................................................................................................... 39

Published: May 2022
Ratio Definitions .......................................................................................................................................................................... 39

About GlobalData ........................................................................................................................................................................ 43
Contact Us ................................................................................................................................................................................... 43
Disclaimer .................................................................................................................................................................................... 43

Published: May 2022
List of Tables
Li Ning Co Ltd, Key Facts .................................................................................................................................................................... 6
Li Ning Co Ltd, Key Employees ........................................................................................................................................................... 7
Li Ning Co Ltd, Key Employee Biographies ......................................................................................................................................... 8
Li Ning Co Ltd, Major Products and Services...................................................................................................................................... 9
Li Ning Co Ltd, History ...................................................................................................................................................................... 10
Li Ning Co Ltd, Other Locations ........................................................................................................................................................ 15
Li Ning Co Ltd, Subsidiaries .............................................................................................................................................................. 15
Li Ning Co Ltd, Key Competitors....................................................................................................................................................... 25
Li Ning Co Ltd, Ratios based on current share price ........................................................................................................................ 26
Li Ning Co Ltd, Annual Ratios ........................................................................................................................................................... 27
Li Ning Co Ltd, Annual Ratios (Cont...1) ........................................................................................................................................... 28
Li Ning Co Ltd, Annual Ratios (Cont...2) ........................................................................................................................................... 29
Li Ning Co Ltd, Interim Ratios........................................................................................................................................................... 31
Currency Codes ................................................................................................................................................................................ 39
Capital Market Ratios....................................................................................................................................................................... 39
Equity Ratios .................................................................................................................................................................................... 40
Profitability Ratios............................................................................................................................................................................ 40
Cost Ratios ....................................................................................................................................................................................... 41
Liquidity Ratios................................................................................................................................................................................. 41
Leverage Ratios ................................................................................................................................................................................ 42
Efficiency Ratios ............................................................................................................................................................................... 42
List of Figures
Li Ning Co Ltd, Performance Chart (2017 - 2021) ............................................................................................................................ 30
Li Ning Co Ltd, Ratio Charts .............................................................................................................................................................. 32

Published: May 2022
Section 1 - About the Company

Li Ning Co Ltd - Key Facts
Li Ning Co Ltd, Key Facts
Corporate Address No. 8 Xing Guang 5th Street, Ticker Symbol, Exchange 2331 [Hong Kong Stock
Opto-Mechat, Beijing, BEJ, Exchange]
101111, China
Telephone +86 10 80800808 No. of Employees 4,019
Fax +86 10 80800000 Fiscal Year End December
URL www.lining.com Revenue (in USD Million) 3,499.6
Industry Consumer Goods, Retail, Revenue (in CNY Million) 22,572.3
Wholesale & Foodservice, Sport,
Technology, Media & Telecom
Locations Asia-Pacific, China, Hong Kong, South Korea, United States
Source: Annual Report, Company Website, Primary and Secondary Research GlobalData

Published: May 2022
Li Ning Co Ltd - Key Employees

Li Ning Co Ltd, Key Employees
Name Job Title Board Level Since Age
LI Ning Chairman, Joint Chief Executive Executive Board 2015 59

Officer
Li Qilin Director Executive Board 2018 35
Kosaka Takeshi Director, Joint Chief Executive Executive Board 2019 51
Officer
Louis Koo Fook Sun Director Non Executive Board 2004 65
Wang Ya Fei Director Non Executive Board 2003 66
Bunny Chan Chung Bun Director Non Executive Board 2004 64
Terence Wah Fung Tsang Chief Financial Officer Senior Management 2013 60
Hong Yu Ru Vice President Product Design, Senior Management 1990 56
Planning, Listing and Marketing
Liao Bin Vice President Human Senior Management 2016 47
Resources, Legal Affairs and
Administration
Zhang Xiang Du General Manager Brand Project Senior Management 1991 66
Management Center
Feng Ye Vice President E-Commerce and Senior Management 42
Retail Business
He Can Yu General Manager Apparel R&D Senior Management 2002 52
and Production
Xu Jian Guang General Manager Footwear Senior Management 1998 53
Research and Innovation
Hu Nan General Manager LI-NING Senior Management 2015 56
YOUNG
Jin Zhai Xuan Vice President Direct Retail Senior Management 2020 44
Operation
Dong Xing Tai General Manager Footwear Senior Management 2018 44
Supply Chain Management
TAI Kar Lei Secretary Senior Management
Wang Nan Vice President Wholesale Senior Management 2021 39
Business

Published: May 2022
Li Ning Co Ltd - Key Employee Biographies

Li Ning Co Ltd, Key Employee Biographies
Mr. Li Ning has been the Chairman and Joint Chief Executive Officer of the
LI Ning
company since 2015. Previously, he served as an Interim Chief Executive Officer
Job Title: Chairman, Joint Chief Executive Officer
of the company from March 2015 to September 2019. Prior to this, he served as
a member of the Men’s Artistic Gymnastics Technical Committee of the
Board Level: Executive Board
Federation Internationale De Gymnastique from 1993 and 2000. He is also the
Since: 2015
Chairman and the Executive Director of Viva China Holdings Limited.
Age: 59
Kosaka Takeshi
Job Title: Director, Joint Chief Executive Officer Mr. Kosaka Takeshi has been the Joint Chief Executive Officer and a Director of
the company since 2019. Prior to this, he served as the Chief Executive Officer
Board Level: Executive Board of South Korea Uniqlo.
Since: 2019
Age: 51
Terence Wah Fung Tsang Mr. Terence Wah Fung Tsang has been the Chief Financial Officer of the
Job Title: Chief Financial Officer company since 2013. Previously, he served in various leadership roles at Guess
Inc, Ashworth Inc and Levi Strauss Company. Prior to this, he held various
Board Level: Senior Management management roles including Chief Operation Officer, Chief Financial Officer,
Since: 2013 Asia President and Senior Vice President for business unit.
Age: 60
Liao Bin
Job Title: Vice President Human Resources, Legal
Mr. Liao Bin has been the Vice President of Human Resources, Legal Affairs and
Affairs and Administration
Administration at the company since 2016. Prior to this, he served in senior
human resources management positions in various companies.
Board Level: Senior Management
Since: 2016
Age: 47
Wang Nan
Mr. Wang Nan has been the Vice President of Wholesale Business at the
Job Title: Vice President Wholesale Business
company since 2021. Mr. Wang has over 16 years of working experience in sales
of fast-moving consumer goods and sports products. Earlier he served in senior
Board Level: Senior Management
management positions in multinational enterprises.
Since: 2021
Age: 39

Published: May 2022
Li Ning Co Ltd - Major Products and Services

Li Ning is a manufacturer and distributor of sports equipment. The company’s major products and brands include the following:
Li Ning Co Ltd, Major Products and Services

Products:
Apparel for Men and Women
Sports Footwear
Outdoor Sports Products
Accessories:
Bags
Balls
Caps
Gloves
Scarves
Sports Protectors
Socks
Equipment:
Bags
Over grips
Rackets
Strings
Brands:
Brands:
LI-NING
Other/licensed Brands:
AIGLE
Kason
Double Happiness
Danskin

Published: May 2022
Li Ning Co Ltd - History

Li Ning Co Ltd, History
2021 Corporate Changes/Expansions In November, the company opened a 1990 flagship store at Parkview Green
Beijing upscale shopping mall.
2021 Corporate Changes/Expansions In November, the company opened a 1990 flagship store in Chongqing
Raffles city.
2021 New Products/Services In November, the company revealed the launch of the 1990 high-end line.
2020 Plans/Strategy In May, the company announced its plans to acquire 66.6% stake in Bossini
International Holdings Ltd, a retail company for US$6 million.
2019 Corporate Changes/Expansions In October, Li Ning announced the opening of a standalone retail showrooms
in Canada.
2018 Contracts/Agreements In February, the company signed a sport sponsorship deal with PV Sindhu, an
Indian badminton player and silver medalist in Olympic.
2015 Contracts/Agreements In October, Li Ning entered into the share transfer agreement with Viva China
Holdings Limited to sell 10% share in Shanghai Double Happiness Co., Ltd.
2012 Contracts/Agreements The company partnered with Heat G Dwyane Wade to launch a new athletic
footwear and apparel brand namely, Wade.
2010 Contracts/Agreements The company partnered with Australian sportswear specialists SKINS to
launch the World's Leading Gradient Compression Sportswear.
2010 Contracts/Agreements The company sealed agreement with Coolpoint in relation to Brand or
Product Endorsement, Sponsorship and Event Management Services and
Memorandum of Understanding with Coolpoint to acquire 30.9% of the
entire issued capital of Li Ning from Victory Mind Assets, Dragon City and
Alpha Talent.
2010 Contracts/Agreements The company signed the No.2 NBA Overall Draft Pick Evan Turner to further
strengthen its World-Class Sports Sponsorship Resources.
2010 Corporate Changes/Expansions The company has announced the opening of the first LI-NING brand retail
store in Oregon, Portland, in the US.
2009 Contracts/Agreements Li Ning Co Ltd announced that Shanghai Double Happiness Co., Ltd. (Double
Happiness), an indirect non wholly owned subsidiary of the Company,
entered into the equity transfer agreement with Wujiang Daoboer Sports
Equipment Co., Ltd.
2008 Contracts/Agreements The company's subsidiary Li Ning (China) Sports Goods Co., Ltd. entered into
a license agreement with Lotto Sport H.K.
Limited.
2007 Acquisitions/Mergers/Takeovers The company acquired 57.5% interest in leading table tennis brand "Double
Happiness".
2007 New Products/Services The company launched a new brand, Z-Do.
2007 New Products/Services The company's core patented LI-NING BOW anti-shock technology into its
footwear products and BOW basketball series was launched.
2006 Contracts/Agreements The company entered into an agreement with the national track & field team
of the Republic of Sudan.
2006 Contracts/Agreements The company entered into an agreement with the world leading NBA player
Shaquille O'Neal
2005 Contracts/Agreements The company entered into an agreement with AIGLE International S.A. and
formed a joint venture to manufacture garment and footwear products.
2004 Stock Listings/IPO The company was listed on the stock market.

Published: May 2022
1997 Corporate Changes/Expansions In March, the company established first design and R&D centre in Foshan,
Guangdong.
1989 Incorporation/Establishment Li Ning Company Limited was established.

Published: May 2022
Li Ning Co Ltd - Company Statement
A statement by Mr. Li Ning, the chairman and the Joint Chief Executive Officer of Li Ning Co Ltd is given below. The statement has been taken
from the company's 2021 annual report.
Dear Shareholders,
During 2021, the recurring waves of COVID-19 persisted, imposing consistent impacts on the global macroeconomy, livelihood and operating
modes of businesses. Nevertheless, capitalizing on the stringent and effective pandemic containment measures of the Chinese government
and active cooperation of the public, China’s economy has embarked on a steady recovery trend. Its gross economic output and social
productivity continued to rise to a new level, and the national economy showed stronger resilience. With the impact of macroeconomic
slowdown and the recurring pandemic on the domestic consumption market, despite the total retail sales of general consumables has
increased substantially year-on-year in the first half of the year and slightly slowed down in the second half of the year, the annual
consumption market has improved significantly from the severe pandemic period of 2020 overall. The pandemic has increased consumers’
health awareness. Coupling with various national policy support and guidance for sports, we believe the room for growth of the sports
product consumption market will remain huge.
During the year, the Group continued to put great emphasis on enhancing LI-NING’s experience value, further implemented the core strategy
of Single Brand, Multi-categories, Diversified Channels, optimized and upgraded our products and enhanced the operating efficiency of retail
channels. At the same time, we improved the stability and responsiveness of the supply chain while consolidating the brand and product
competitiveness in full swing.
According to the National Bureau of Statistics, China’s GDP in 2021 registered a year-on-year growth of 8.1% and the effective growth rate of
residents’ per capita disposable income in China reached 8.2%, basically in line with the economic growth. Driven by the continuously
improving household living standard, consumption structure was further optimized. In addition, driven by the public pursuit of a healthier
lifestyle prompted by the pandemic, the sports industry has been developing robustly. In 2021, the Tokyo Olympic Games was successfully
held. Chinese athletes achieved good results in the international sports event, further promoting the public participation in sports games at
the same time. As the national policies facilitate quality development in the sports industry in a proactive manner, the State Council has
promulgated the circular of National Fitness Plan (2021-2025) during the year in a bid to further enhance citizens’ passion of seeking physical
fitness, increased the number of participants of various sports events and encouraged sports exercises among the general public.
Furthermore, it was proposed in the 14th five-year plan that we should accelerate the promotion of building a strong sports nation, and
facilitate the innovative development and quality supply of sports product based on the diversified sports needs of citizens so as to guide the
new demand for sports consumption.
During the year, the Group continued to focus on LI-NING’s experience value, to satisfy the individual needs of consumers through our
comprehensive marketing strategies, and further enhance consumers’ experiences by providing diversified services and promoting the means
of interchange and interactions with various parties. LI-NING brand’s innate sports DNA enabled us to put great emphasis on the professional
and functional features of products. While continuing to putting more resources into research and development (R&D) and upgrading the
sports functions of products, we leveraged the market trends and made bold innovations by incorporating elements of humanity such as
fashion trends, culture, arts and history into our designs to introduce new vitality into our professional sports products, thereby promoting
the dialogues with young consumers, enhancing brand communication and conveying our brand value more effectively.
Continue to optimize the operation model leading to ongoing improvement in profitability
In 2021, revenue of the Group grew by 56%, the net profit margin rose from 11.7% of last year to 17.8%. Cash flow from operating activities
increased by over 136% to RMB6,525 million. Working capital improved stably with the Cash Conversion Cycle (CCC) remained flat at a
healthy level of 20 days.
With consumers’ diversified sport consumption demand, we improved and strengthened LI-NING’s experience value comprehensively by
continuing to optimize and upgrade our products, channel and retail operation efficiency as well as supply chain capability. We further
enhanced the product’s professional and functional features by scaling up the efforts on R&D in order to continuously upgrade product
functions. We kept abreast of the cultural creativity and popular fashion trends, stayed in tune with the times and incorporated fashionable
elements and diversified styles into our professional sports products to persuade consumers out of having a stereotypical impression on
sports products. Meanwhile, we continued to optimize our channel control and push forward the reform of retail operation models, actively
explored strategies for new retail channels to fully unleash channel efficiency, developed the supply chain management system centering on
business needs and enhanced the responsiveness and elasticity of the supply chain.
Adhere to the strategy of single brand, multi-categories, diversified channels to realize li-ning’s experience value comprehensively

Published: May 2022
During the year, we continued to focus on the implementation of the strategy of Single Brand, Multi-categories, Diversified Channels and
further explored the professional and functional features of our products. We also scaled up the efforts on technological R&D of different
categories of products to improve user experience. At the same time, we incorporated elements of popular culture into our professional
sports products and developed products that integrate excellent functions and unique styles. We strengthened core product and brand
competitiveness in full swing by expanding consumer groups through diversified marketing strategies.
By exploring in-depth the brand history and value, we launched the brand-new, independent and high-class fashionable sporty styled sub-
brand LI-NING 1990. Embodying the precious culture and conceptual heritage from the brand development history, the series retains the
classic visual design adopted since establishment of the brand to demonstrate the style concept of Classic – Eternity, which also marks a
renewed brand philosophy. While adhering to the strategic plan of Single Brand, Multi-categories, Diversified Channels, we envisaged
providing consumers with up-to-date and distinctive professional sports products. LI-NING 1990 was expected to further increase popularity
of our brand, thus creating a new growth point for our business.
Besides, we carried out cross-sector collaboration with multiple themes and dimensions. During the first half of the year, we held the Li Ning
2021 Fall/Winter Fashion Trend press conference in Zhengzhou, Henan, to demonstrate the unlimited possibilities of Li Ning brand through
immersive experience and space and showcase the kindled sparks arising from integration of sports and popular trend in a bid to reshape the
fashion trends and culture of sports. In addition, we organized another fashion show themed in Nyingchi Lulang Gongcuo Scenic Area by the
Himalayan range in the second half of the year. With the natural landscape background of mountains and extensive stretch of snow mountain
range and the theme manifested by the artistic design of apparel and accessories, it further illustrated the brand spirit of Anything is Possible.
Push forward retail reform and optimize supply chain system to further unleash channel efficiency
In 2021, we continued to push forward the transformation of retail operation models with a focus on improving product management and
retail sales capability to further unleash channel efficiency at a faster speed in connection with the upgraded and optimized channels. We
further promoted the business model for single store in an orderly manner to boost retail-end performance centering on key retail data. In
addition, we have enhanced the organization and cultural development of retail talent team by creating an assortment and operation
management system that embodies the sporty and trendy image of LI-NING brand.
In respect of sales channel, we expanded the stores with high quality and profitability and accelerated the addition of quality stores, while
opening landmark flagship stores in core cities to strengthen the channel layout planning at core business districts. Meanwhile, we
accelerated the closure of loss-making and low-efficiency stores to optimize structure of channels and improve channel efficiency. Besides, in
connection with the operating strategy of big stores with high efficiency, we continued to upgrade the store image by enriching the visual
effects within stores to improve consumers’ experience as well as enhance recognition of and loyalty to our brand.
In respect of supply chain, in order to align with the Company’s development needs under its core strategies, we continued to intensify our
efforts in resource consolidation and further enhanced the flexibility and fast response capability of the supply chain system with a view to
facilitating the realization of the Demand-driven dynamic business model and fostering a more precise, flexible and efficient supply chain
management system. Through review on our supply chain resources with an emphasis on customized and differentiated product demands,
we closely cooperated with our suppliers in a bid to enhance the competitive advantages of Li Ning brand. Meanwhile, we strived to
consolidate our own supply chain system within the Company and further enhance our supply chain management and technological R&D
capability. In respect of cost management, the Company continued to strictly implement cost planning and practiced stringent cost control
and management on various stages such as design, development and production as well as put emphasis on optimization of cost structure.
OUTLOOK
With the accelerated urbanization and the policy trend of resuming sports activities in school campus in China, we strongly believe that
China’s consumption market of sports products will enter a period of favorable growth in the next two to three decades. Meanwhile, Li Ning
Company is still in the development stage that may witness accelerated pursuit of quality growth, efficient expansion and stronger brand
competitiveness in the professional field. Looking forward, the Group will strive to improve the following core business focuses, remain
devoted to create LI-NING’s experience value and enhance retail operation capability with a view to laying a solid foundation for profit growth
and sustainable development in the future, at the same time achieving real sports value:
consistently adhere to the strategic direction of Single Brand, Multi-categories, Diversified Channels and strive for sustainable development of
businesses with a focus on continuous operation efficiency improvement, so as to enhance product and brand competitiveness, steadily
improve profitability and further expand business scale.
continue to improve product functions and technological innovation, and put greater efforts in exploring fashion trends and market
development analysis to further enhance user experience by understanding the core needs of consumers, at the same time striving to

Published: May 2022
improve our diversified marketing approaches and push forward the development strategies of digitalized marketing in an effort to expand
our brand influence.
Accelerate the development of high-quality stores and optimize our diversified channel layout. We will reinforce the online and offline
integrated operation model and improve online and offline operation and sales efficiency through comprehensive application of big data
analysis and information technology with a focus on the actual demand of consumers. We will also edge up our efforts in the development of
supply chain management system in a bid to enhance the capability in terms of management of our own supply chain, product research and
development as well as application of technologies.
In respect of new business, enhancing single store profitability and store efficiency will remain as our major development goals. We will make
prudent use of resources to explore business opportunities and market potential, in order to foster new opportunities for the Company’s
profit growth in the long run.
LI-NING is a brand originated from China with athletes’ DNA. We aim to establish the LI-NING brand as a world-class professional sports brand
with fashion attributes and become the favourite sports brand among Chinese consumers. It was with this vision that we determined the
brand strategy of Single Brand, Multi-categories, Diversified Channels, which also served as our guidance for the building of unique
competitiveness of the LI-NING brand, making us one of the top players in the market.
In the future, we will press ahead with the transition to retail business model at full steam and devote more resources to build up our retail
capability and upgrade the digitalized system, so as to enhance our retail operation capability and promote healthy business growth on a
continuous basis. In the meantime, sustained efforts will be made to strengthen our learning of sports knowledge with emphasis on
technological research and development as well as pop culture analysis, striving to actively explore new rooms for development and inject
more vitality and creativity to the brand. As the founder and operator of the Company, I always place much emphasis on the long-term
interests of investors, and cherish their care of LI-NING brand and unremitting supports to the Company. Meanwhile, I would like to express
my sincere gratitude to our dedicated and hardworking staff. The management and I will spare no efforts to steer the Company forward
towards further development in the future, all the while preserving the heritage of LI-NING brand with athletes’ DNA and bringing the spirit of
Anything is Possible into real practice.

Published: May 2022
Li Ning Co Ltd - Locations And Subsidiaries

Head Office
Li Ning Co Ltd
No. 8 Xing Guang 5th Street, Opto-Mechat
Beijing
BEJ
101111
China
Tel: +86 10 80800808
Fax: +86 10 80800000
Other Locations & Subsidiaries
Li Ning Co Ltd, Other Locations
Unit 3301, 33/F., BEA Tower

418 Kwun Tong Road
Hong Kong
Hong Kong
Tel: +852 3541 6000
Fax: +852 3102 0927
Li Ning Co Ltd, Subsidiaries
Beijing Li Ning Sports Goods Sales Co., Ltd. Li Ning Sports (Hong Kong) Co.,Ltd.
Hong Kong
China
Li Ning Sports Technology Development (Hong Kong) Co., Shanghai Hubu Information System Co., Ltd.
Suite 1, 7-15, Level 45 China
Office Tower, Langham Place
Hong Kong
Hong Kong
Tel: +852 35416000
Shanghai Yue Ao Sports Goods Co., Ltd. RealSports Pte Ltd.

China British Virgin Islands
United Kingdom
Li Ning International Trading (Hong Kong) Co., Ltd. Kason Sports (Hong Kong) Ltd.
Hong Kong Hong Kong
Ning Sports Technology Development (Hong Kong) Co., Ltd. Beijing Li Ning Sports Goods Co., Ltd.
Hong Kong China
Ning Sports (Hong Kong) Co.,Ltd. Guangzhou Edosports Goods Sales Co., Ltd.
Hong Kong China
Nanjing Edosports Goods Sales Co., Ltd. Shanghai Shao Hao Sports Goods Research and Development Co.,
China Ltd.
China
Tianjin Edosports Goods Sales Co., Ltd. Wuhan Edosports Goods Sales Co., Ltd.

Published: May 2022
China China
Xinjiang Edosports Goods Sales Co., Ltd. Changsha Edosports Goods Sales Co., Ltd.
China China
Danskin (Shanghai) Sports Goods Co., Ltd Zhengzhou Edosports Goods Sales Co., Ltd
Jinan Edosports Goods Sales Co., Ltd Li Ning Korea Sports Ltd
Hubei Li Ning Footwear Co., Ltd Shenzhen Yue Ao Trading Co., Ltd
Chongqing Yue Ao Sports Goods Sales Co., Ltd

Published: May 2022
Section 2 – Company Analysis

Company Overview
Li Ning Co Ltd (Li Ning) is a manufacturer, marketer, distributor and seller of sports goods. The company’s product portfolio includes footwear,
apparel and accessories for sport and leisure use. It operates through franchised, self-operated retail outlets and online channels. The
company markets products under own brand Li-Ning. Li Ning also distributes and sells various sports products which are self-owned licensed,
including AIGLE (outdoor sports), Double Happiness (table tennis), Danskin (fitness products for dance and yoga) and Kason (badminton),
which are operated through joint venture and associate with third parties. It operates a manufacturing facility in Nanning, Guangxi. Li Ning is
headquartered in, Beijing, China.

Published: May 2022
Li Ning Co Ltd - Business Description

Li Ning Co Ltd (Li Ning) designs, manufactures, markets and distributes sports goods. The company provides a wide range of footwear,
apparel, equipment and accessories for sport and leisure use. Li Ning classifies its product portfolio into three categories: Footwear, Apparel,
and Equipment and Accessories.
The company operates through four sales channels: Franchised Distributors, Direct Operation, E-Commerce Channel and International
Markets.
In FY2021, franchised distributors accounted for 48.1% of the company’s total revenue, followed by e-commerce channel (28.4%), direct
operation (22.2%), and international market (1.3%).
Product Category: Apparel
Overview
Offers sports apparels such as t-shirts, tops, hoodie, jacket and coat, pant, shorts and dresses for men and women.
Performance
Reported revenue of CNY11,823.8 million for FY2021, which grew 60.5% YoY, and recorded a CAGR of 29.0% during 2019-21. The segment
accounted for 52.4% of the company's revenue in FY2021.
Product Category: Equipment and Accessories

Overview
Offers sports equipment and accessories for running, training, basketball, badminton and other sports. Product portfolio includes bags, sports
protectors, balls, balls, gloves, sports protector, caps, rackets, strings, shuttlecocks, nets, over grips, and other sports materials.
Performance
Product Category: Footwear

Overview
Offers sports footwear such as running shoe, gym shoe, wade, basketball, soccer and sandals for men, women, and kids.
Performance
Geographical Segment: International

Performance
Reported revenue of CNY296.2 million for FY2021, which grew 34.9% YoY, and recorded a CAGR of 4.9% during 2019-21. International
accounted for 1.3% of the company's revenue in FY2021
Geographical Segment: The PRC

Target Markets
China, Hong Kong and Macau.

Published: May 2022
Performance
Reported revenue of CNY22,276.1 million for FY2021, which grew 56.5% YoY, and recorded a CAGR of 28.0% during 2019-21. PRC Markets
In FY2021, the Southern region accounted for 50.8% of the segment’s revenue, followed by Northern region with 49.2% of company’s total
revenue.
Geographical Segment: The PRC Market

Key Stats
As of December 2021, operated:
5,905 franchised stores, including 3,264 stores in Northern region and 2,621 stores in Southern region.
1,232 retail stores of which 526 are located in Northern region
and 706 are located in Southern region.
R&D Overview
Li Ning R&D activities focuses on development of new products and improve existing ones. It focuses on upgrading the functions and features
of sport products and to introduce new vitality into professional sports products to serve the emerging needs of the customers. In FY2021, the
company incurred expenses of CNY413.9 million on R&D activities, which as a percentage of revenue stood at 1.8%.

Published: May 2022
Li Ning Co Ltd - Corporate Strategy

Li Ning intends to improve its business efficiency and achieve a sustainable profitable growth by focusing on optimizing the retail business
model with the goal of being ‘Precise + Swift’. To this end, the company adopted a development strategy of ‘Single brand, Multi-categories,
Diversified channels’ to create its brand value in market. In line with this, the company collaborated with multiple themes and dimensions and
conducted a fashion show themed in Nyingchi Lulang Gongcuo Scenic Area by the Himalayan range in the natural landscape background of
mountains and extensive stretch of snow mountain range and the theme showcased by the artistic design of apparel and accessories which
illustrated the brand spirit of Anything is Possible.
The company plans to emphasize on sports research and investment in product R&D and launch new products for athletes and sports
enthusiasts by applying new technology and materials to its products. Li Ning also aims to expand its sales channels. Li Ning intends to develop
the supply chain system of the e-commerce platform. It established the supplier monitor department to regulate supply chain and also
consolidated upstream resources to enhance the capabilities of its supply chain.

Published: May 2022
Li Ning Co Ltd - SWOT Analysis

SWOT Analysis - Overview
Li Ning Co Ltd (Li Ning) is a manufacturer and marketer of sports goods. Operational network, brand portfolio and liquidity position are the
company's major strengths, whereas geographical concentration, and huge debt remains the cause for concern. Global sports equipment
market, online retail market in china and global footwear market are likely to provide growth opportunities to the company. However, market
competition, foreign exchange risks, and counterfeit products could affect its business operations.
Li Ning Co Ltd - Strengths

Strength - Operational Network
LI-NING brand has established a nationwide distribution and retail network covering all provinces, autonomous regions and municipalities in
China. The company operates through a network of flagship stores, conventional stores, China LI-NING stores, multi-brand stores and factory
outlets under LI-NING brand, including LI-NING YOUNG and LI-NING Core Brand. As of December 2021, the company had 5,905 franchised
stores and 1,232 owned stores, of which 3,264 were franchised and 526 were owned across Northern regions; and 2,641 franchised and 706
owned stores across Southern regions.
Strength - Financial Performance
Strong financial performance enables the company to provide higher returns to its shareholders and also increases its ability to allocate
adequate funds for future growth initiatives. In FY2021, Li Ning reported revenue of CNY22,572.3 million as compared to CNY14,457 million in
FY2019, with an annual increase of 56.1%. Growth in revenue was also due increase of 64.9%, 60.5%, and 50% in equipment and accessories,
apparel and footwear product categories respectively. In FY2021, the company’s operating margin was 22.8%, compared to an operating
margin of 15.2% in FY2020. Improving operating performance indicates the company’s focus on efficient cost management. Similarly, in
FY2021, the company recorded a net margin of 17.8%, compared to a net margin of 11.7% in FY2020.
Strength - Liquidity Position
Higher liquidity places Li Ning at an advantage, enabling it to capture potential opportunities arising in the market. At the end of FY2021, the
current ratio of the company was 2.4 as compared to 1.9 at the end of FY2020. The increase in current ratio was due to 90.9% increase in its
current assets from CNY9,776.6 million in FY2020 to CNY18,671.8 million in FY2021, resulting from increase in cash and cash equivalents and
other assets. The company’s current ratio was higher than that of its major competitors, such as Puma SE (1.6), and adidas AG (1.5).

Published: May 2022
Li Ning Co Ltd - Weaknesses

Weakness - Geographic Concentration
Geographical concentration is an area of concern for the company. Though, Li Ning operates through two geographical segments: the PRC
market and International markets, it generates majority of its revenue from the PRC market. Dependence on the PRC could impact the
company’s operational and financial performance and increases the business risks of the company by exposing it to the economic and
geopolitical risks associated with the country which could reduce demand for its products or disrupt the supply chain and also restricts its
market share and growth opportunities in future. It also acts as a hindrance to the company’s international growth plans. In FY2021, the PRC
market accounted for 98.7% of the company’s revenue.
Weakness - Huge Debt
Huge debt remains a cause for concern to the company. At the end of FY2021, the company had long term debt of CNY956.4 million as
compared to CNY688.6 million in FY2020. In FY2021, revenue increased 56.1% over that in FY2020; however, long term debt increased 38.8%.
The increase in debt indicates that Li Ning will likely incur higher interest expenses, which would affect profitability. The company recorded
debt to equity ratio (D/E) of 0.06 at the end of FY2021 as compared to 0.1 in FY2020. Li Ning Live recorded higher D/E than its competitor,
Adidas AG, which reported D/E ratio of 0.7.

Published: May 2022
Li Ning Co Ltd - Opportunities

Opportunity - Online Retail Market in China
The growing retail market in China benefits the company by enabling it to capitalize on a wide range of cosmetics, accessories, fashion,
apparel, household, electrical goods, grocery and perishables. According to in-house research, the online retail sector in China is forecast to
reach US$946.5 billion by 2025. China accounts for 68% of the Asia-Pacific online retail sector value. Food and Grocery Retail was the largest
segment in the market, accounting for 29.7% of the value, followed by electrical and electronics retail (29.2%), apparel retail (17.6%), home
and garden products (8.3%), furniture and floor coverings (4.9%), footwear (4.5%), and other (5.8%). The company offers footwear, apparel,
equipment and accessories for sport and leisure use in through amazon and other e-commerce channels.
Opportunity - Global Sports Equipment Market
Li Ning stands to benefit from the positive outlook for the global sports equipment retail market as it offers apparel, footwear, equipment and
accessories. The company stands to benefit from the positive outlook for the global sports equipment industry. An increasing number of
sports enthusiasts and participants, growing health and fitness consciousness among people, and the emergence of e-commerce are some of
the major factors that led to growth in the sports equipment market. Besides fitness, sports have also become a major source of
entertainment. According to in-house research, the global sports equipment market is expected to be valued at US$199.5 billion by the end of
2023. Asia-Pacific accounts for 40.1% of the global sports equipment market value, followed by the US (26.5%), Europe (25%), Middle East
(1.9%) and rest of the world (6.9%). Clothing, Footwear and Accessories Specialists form the leading distribution channel in the global sports
equipment market, accounting for 13.2% of the total value. People in the US face significant health issues owing to the increasing incidence of
obesity. The country is also beset by increasing incidence of diabetes and hypertension. The US government rolled out a number of physical
activity programs. If participation increases, the demand for sports equipment would also increase, augmenting the market. Specialists in
clothing, footwear and accessories form the leading distribution channel, accounting for 13.3% of the market, while online pureplay accounts
for 6.4%. The company offers a wide range of sports equipment and accessories such as bags, sports protectors, balls, balls, gloves, sports
protector, caps, rackets, strings, shuttlecocks, nets, over grips, and other sports materials.
Opportunity - Global Footwear Market
The company stands to benefit from the growth in global footwear market. Li Ning designs, develops, manufactures, distributes, and markets
footwear products such as running shoe, gym shoe, wade, basketball, soccer and sandals for men, women, and kids for men, women and
children. The company stands to benefit from the growth in global footwear market. According to the in-house research report, the global
footwear market is expected to reach a value of US$374,122.2 million by 2025. Asia-Pacific accounted for 38.1% of the global total sales,
followed by Europe (28.3%), the US (23.1%) the Middle East (2.3%) and Rest of the World (8.2%). Women's footwear is the largest segment of
the global footwear market, accounting for 46.9% of the market's total value, followed by Men's footwear (34.5%) and Children's footwear
(18.6%). The growth will be primarily driven by growing world population, expanding base of middle-class consumers, rising standards of
living, increasing household income and per capita spends.

Published: May 2022
Li Ning Co Ltd - Threats

Threat - Market Competition
Li Ning company operates in highly competitive businesses, which are marked by low entry barriers, counterfeit products and cheap imports
and presence of many players in the fast growing economy. The huge potential offered by China has lured more and more players enter the
market. Many have adopted a similar channel-expansion growth model, which is driving the industry into a fierce cycle of price competition.
The company's major competitors include Adidas AG, Puma SE, Yonex Co., Ltd., China Dongxiang (Group) Co., Ltd and Shenzhou International
Group Holdings Ltd. In March 2022, Adidas AG and Marimekko collaborated to blend Marimekko’s art of printmaking with adidas‘ expertise in
performance wear. In December 2021, Yonex Co., Ltd announced its plans to acquire 100% stake in Bridgestone Tecnif Ibre Co., Ltd.
Threat - Counterfeit Products Market
The huge influx of counterfeit products could affect the company's business operations. The counterfeit merchandise that floods the market
could reduce the company's sales and affect its profit margins. Customers could mistakenly purchase counterfeit products bearing fake labels,
containing low quality products, which affect consumer confidence and hamper the brand image of the genuine company. According to the
International Chamber of Commerce (ICC), counterfeiting and piracy are estimated to cost G20 countries over US$125 billion every year. It is
also estimated that approximately 2.5 million jobs could be destroyed by counterfeiting and piracy. Being priced low, counterfeits could affect
the company's financial performance and brand image.
Threat - Foreign Exchange Risks
Li Ning majorly operates in China and manages its transactions in Chinese Renminbi. Certain of its cash, bank deposits, and trade receivables
are denominated in the US dollars, Hong Kong dollars, Euro and South Korean Won. The company also is required to pay certain borrowings,
license fees and other payables in foreign currencies. The major elements exposed to exchange rate risks include the company's investments
in overseas subsidiaries and affiliates and monetary assets and liabilities arising from business transactions in foreign currencies. In FY2021,
the company reported a loss of CNY2.5 million due to foreign exchange translation adjustments as compared to loss of CNY25.3 million in
FY2020. To minimize risks from currency fluctuations, the company involves in foreign exchange hedging by entering into foreign exchange
forward contracts. However, there may be no assurance that such hedging or other measures may limit the impact of movements in exchange
rates on the company's results of operations.
NOTE:
* Sector average represents top companies within the specified sector
The above strategic analysis is based on in-house research and reflects the publishers opinion only

Published: May 2022
Li Ning Co Ltd - Key Competitors

Li Ning Co Ltd, Key Competitors
Name Headquarters Revenue (US$ m)
adidas AG Germany 25,108
Puma SE Germany 8,047
Shenzhou International Group Holdings Ltd China 3,338
Yonex Co Ltd Japan 486
China Dongxiang (Group) Co Ltd China 285

Published: May 2022
Section 3 – Company Financial Ratios

Financial Ratios - Capital Market Ratios
Li Ning Co Ltd, Ratios based on current share price
Key Ratios 25-May-2022
P/E (Price/Earnings) Ratio 32.09

EV/EBITDA (Enterprise Value/Earnings Before Interest, Taxes, Depreciation and Amortization) 21.56
Enterprise Value/Operating Profit 21.56
Enterprise Value/Total Assets 3.80
Note: Above ratios are based on share price as of 25-May-2022, the above ratios are absolute numbers

Published: May 2022
Financial Ratios - Annual Ratios

Li Ning Co Ltd, Annual Ratios
Key Ratios Unit/Currency 2017 2018 2019 2020 2021
Equity Ratios
EPS (Earnings per Share) CNY 0.21 0.29 0.61 0.69 1.58
Dividend per Share CNY 0.09 0.15 0.20 0.46
Dividend Cover Absolute 3.25 3.94 3.37 3.43
Book Value per Share CNY 2.35 2.69 3.11 3.51 8.48
Cash Value per Share CNY 1.17 1.70 2.60 2.91 5.92
Profitability Ratios
Gross Margin % 47.06 48.07 49.07 49.07 53.03
Operating Margin % 5.02 7.39 11.13 15.19 22.76
Net Profit Margin % 5.81 6.80 10.81 11.75 17.77
Profit Markup % 88.91 92.57 96.34 96.36 112.88
PBT Margin (Profit Before Tax) % 6.06 8.09 13.39 15.55 23.61
Return on Equity % 10.16 12.30 21.05 19.55 19.01
Return on Capital Employed % 8.58 13.06 19.71 22.93 22.76
Return on Assets % 7.31 8.91 14.09 12.52 17.88
Return on Fixed Assets % 53.51 93.17 108.29 105.80 201.83
Return on Working Capital % 14.94 21.54 40.37 46.12 46.83
Growth Ratios
Sales Growth % 10.71 18.45 31.95 4.23 56.13
Operating Income Growth % 15.52 74.38 98.57 42.30 133.90

Published: May 2022
Li Ning Co Ltd, Annual Ratios (Cont...1)

EBITDA Growth % 15.93 45.76 98.91 35.55 90.58
Net Income Growth % -19.91 38.84 109.59 13.30 136.14
EPS Growth % 81.48 36.89 113.26 13.25 128.32
Working Capital Growth % 50.90 21 5.93 24.56 130.35
Cost Ratios
Operating Costs (% of Sales) % 94.98 92.61 88.87 84.81 77.24
Administration Costs (% of Sales) % 38.70 38.19 36.09 32.69 32.11
Liquidity Ratios
Current Ratio Absolute 2.40 2.30 1.81 1.95 2.42
Quick Ratio Absolute 1.88 1.85 1.51 1.68 2.19
Cash Ratio Absolute 1.19 1.32 1.26 1.43 1.91
Leverage Ratios
Debt to Equity Ratio % 0.13 0.12 0.06
Net Debt to Equity Absolute -0.71 -0.71 -0.66
Debt to Capital Ratio % 0.11 0.11 0.06
Efficiency Ratios
Asset Turnover Absolute 1.26 1.31 1.30 1.07 1.01
Fixed Asset Turnover Absolute 10.65 12.60 9.73 6.97 8.87
Inventory Turnover Absolute 4.54 4.66 5.34 5.35 6.80
Current Asset Turnover Absolute 1.82 1.83 1.86 1.58 1.59

Published: May 2022
Li Ning Co Ltd, Annual Ratios (Cont...2)

Capital Employed Turnover Absolute 1.71 1.77 1.77 1.51 1
Working Capital Turnover Absolute 2.98 2.91 3.63 3.04 2.06
Revenue per Employee CNY 5,746,507
Net Income per Employee CNY 1,021,100
Capex to Sales % 4.82 5.72 4.94 4.47

Published: May 2022
Performance Chart
Li Ning Co Ltd, Performance Chart (2017 - 2021)
Financial Performance
The company reported revenues of (Renminbi) CNY22,572.3 million for the fiscal year ended December 2021 (FY2021), an increase of 56.1%
over FY2020. In FY2021, the company’s operating margin was 22.8%, compared to an operating margin of 15.2% in FY2020. In FY2021, the
company recorded a net margin of 17.8%, compared to a net margin of 11.7% in FY2020.

Published: May 2022
Financial Ratios - Interim Ratios

Li Ning Co Ltd, Interim Ratios
Key Ratios Unit/Currency Dec-2019 Jun-2020 Dec-2020 Jun-2021 Dec-2021
Interim EPS (Earnings per Share) CNY 0.28 0.27 0.40 0.78 0.80
Dividend per Share CNY 0.15 0.20 0.46
Book Value per Share CNY 3.11 3.09 3.51 4.15 8.48
Gross Margin % 48.56 49.46 48.79 55.89 50.66
Operating Margin % 11.36 14.53 15.68 24.89 20.99
Net Profit Margin % 9.25 11.05 12.27 19.24 16.55
Profit Markup % 94.39 97.84 95.26 126.72 102.69
PBIT Margin (Profit Before Interest & Tax) % 18.01 14.87 10.07 3.36
PBT Margin (Profit Before Tax) % 11.51 14.68 16.20 25.75 21.84
Operating Costs (% of Sales) % 88.64 85.47 84.32 75.11 79.01
Administration Costs (% of Sales) % 35.73 33.11 32.38 29.70 31.95
Interest Costs (% of Sales) % 0.46 0.42 0.47 0.44
Current Ratio Absolute 1.81 1.94 1.95 1.48 2.42
Quick Ratio Absolute 1.51 1.61 1.68 1.26 2.19
Debt to Equity Ratio % 0.13 0.11 0.12 0.09 0.06
Net Debt to Equity Absolute -0.71 -0.62 -0.71 -0.50 -0.64
Debt to Capital Ratio % 0.11 0.10 0.11 0.09 0.06
Interest Coverage Ratio Absolute 3,946.59 3,567.28 2,148.56 768.08

Published: May 2022
Financial Ratios - Ratio Charts

Li Ning Co Ltd, Ratio Charts
EPS Operating Margin
Return on Equity Return on Assets
Debt to Equity Ratio Current Ratio

Published: May 2022
Section 4 – Company’s Recent Developments

Mar 18, 2021: Li Ning Company announces annual results for the year ended 31 December
2020
The board of directors of Li Ning Company Limited is pleased to announce the audited consolidated results of the Company and its
subsidiaries (collectively, the “Group”) for the year ended 31 December 2020, together with comparative figures of 2019
FINANCIAL HIGHLIGHTS
• Net profit attributable to equity holders increased by approximately 13.3% and the net profit margin raised from 10.8% to 11.7%
• On a comparative basis (excluding the one-off profit and loss not related to operation for the corresponding period last year), the net profit
attributable to equity holders increased by approximately 34.2% to RMB1,698 million, and the net profit margin raised from 9.1% to 11.7%.
• Notwithstanding the impact of novel coronavirus disease ("COVID-19) leading to a very challenging retail environment during most time of
the year:
– Revenue increased by approximately 4.2% to RMB14,457 million
– Gross profit margin maintained flat to last year
– The operating leverage has been enhanced continuously, while the operating profit margin has been driven to 15.2% and increased by 410
basis points
– Operating cash flow decreased by 21.1%, yet still achieved positive amount of RMB2,763 million
– Continued improvement in working capital:
Gross average working capital improved (reduced) by 11% while revenue increased by approximately 4.2%
Cash conversion cycle further improved (shortened) by 6 days (2019: 26 days/2020: 20 days)
• The Board has recommended payment of a final dividend of RMB20.46 cents per ordinary share of the Company issued or to be issued
upon conversion of convertible securities for the year ended 31 December 2020 (2019: RMB15.47 cents).
OPERATIONAL HIGHLIGHTS
• Continued operation improvement mitigated certain extent of the negative impact from the COVID-19.
• The retail sell-through for the overall platform recorded low-single-digit increase, including online and offline channels.
• Channel inventory recorded mid-single-digit increase, while Company inventory decreased mid-singledigit.
• Offline channel new product sell-through down low-single-digit driven by sales volume decline:
– Average selling price (ASP) registered a mid-single-digit increase notwithstanding a very promotional retail environment – Sell-out rate: 6-
month declined over 4 percentage points, 3-month declined approximately 1 percentage points
FINAL DIVIDEND

Published: May 2022
The Board has recommended the payment of a final dividend of RMB20.46 cents per ordinary share of the Company issued or to be issued
upon conversion of convertible securities for the year ended 31 December 2020 (2019: RMB15.47 cents). The proposed dividend payment is
subject to approval by the shareholders of the Company at the forthcoming annual general meeting ("AGM) to be held on 11 June 2021 and is
payable in Hong Kong Dollars based on the official exchange rate of Renminbi against Hong Kong Dollars as quoted by the People's Bank of
China on 11 June 2021. Such dividend will not be subject to any withholding tax. Upon shareholders' approval, the proposed final dividend will
be paid: (i) on 29 June 2021 to ordinary shareholders whose names shall appear on the register of members of the Company on 21 June
2021(ii) on 29 June 2021 to holders of convertible securities issued under the open offer of offer securities of the Company as set out in the
listing documents of the Company dated 9 January 2015 which will remain outstanding on 21 June 2021and (iii) on 5 July 2021 (i.e. the third
business day after 29 June 2021) to holders of convertible securities issued under the open offers of convertible securities of the Company as
set out in the listing documents of the Company dated 27 March 2013 which will remain outstanding on 21 June 2021. For the avoidance of
doubt, any convertible securities subject to a conversion notice completed, executed and deposited on or before final dividend record date
(being 21 June 2021) shall be entitled to the distribution of such final dividend of the Company. For details of calculation of distribution of the
final dividend entitled under the convertible securities, please refer to the listing documents of the Company dated 27 March 2013 and 9
January 2015 respectively. The Company did not declare interim dividend for the six months ended 30 June 2020.
Revenue
The Group's revenue for the year ended 31 December 2020 amounted to RMB14,456,971,000, representing an increase of 4.2% as compared
to that of 2019, with a rather stable increment. In 2020, the COVID-19 pandemic posed high risks to the world. The Group's overall sales
revenue also failed to meet the expected target as a result of this special public health emergency. In light of the sudden outbreak of the
pandemic, the Chinese government adopted a series of stringent prevention and control measures, resulting in a gradual recovery from the
epidemic nationwide starting from March 2020 with orderly resumption of work and production. The Group seized the opportunities arising
from the continuous recovery under the Chinese government's efforts in promoting various work in relation to economic development and
continued to develop products featuring our unique sports DNA and Chinese elements with a focus on the needs of the end-consumers. As a
result, the growth rate of omni-channel sell-through turned positive in the second half of the year, demonstrating a healthy post-pandemic
recovery, among which: (a) as retail sell-through was impacted by the COVID-19 pandemic, the Group focused on cost control and inventory
management and reduced the amount of orders in some of the trade fair orders after comprehensive negotiations with franchised
distributors to avoid backlog in channel inventory, resulting in a small increase in the revenue of franchised distributors during the year as
compared with that of last year(b) as majorities of the directly-operated stores of the Group were located in metro and high-tier cities which
were more severely impacted by drop in offline physical traffic, a decrease of 9.7% in sales revenue from direct operation was recorded. As
the pandemic abated in the second half of the year, the desire to buy of endconsumers increased and the Group vigorously launched various
promotional events, which led to a recovery of sales from directly-operated storesand (c) the e-commerce channel is an important channel of
the Group to solicit business. The investments in online product development and efforts made in strengthening online interaction with
consumers in recent years have generated promising returns, which significantly outperformed the offline channel. During the COVID-19
pandemic, the Group has stepped up the efforts in transforming offline traffic to online channels and improving the efficiency of online
channels, contributing to a growth in revenue of 29.9% from the e-commerce channel. The Company will continue to monitor the situation of
the COVID-19 pandemic around the world and the economic policies adopted by the Chinese government in the post-pandemic era and adjust
the Group's operating strategies in a timely manner so as to better respond to the severe challenges brought by the COVID-19 pandemic and
the complicated and ever-changing environment in China and overseas.
Cost of Sales and Gross Profit
For the year ended 31 December 2020, the overall cost of sales of the Group amounted to RMB7,362,627,000 (2019: RMB7,064,168,000), and
the overall gross profit margin was 49.1% (2019: 49.1%). Affected by the COVID-19 pandemic during the year, the Group increased the
discounts offered due to the very promotional retail environment. Meanwhile, the decreased percentage of sales revenue from direct
operation also brought adverse impact on the overall gross profit margin. This negative impact was offset by new retail product tag price
markup. Therefore, the gross profit margin for the year maintained flat to last year due to the aforesaid factors.
Distribution Expenses
For the year ended 31 December 2020, the Group's overall distribution expenses amounted to RMB4,424,718,000 (2019: RMB4,445,070,000),
accounting for 30.6% (2019: 32.0%) of the Group's total revenue. Despite the online channels achieved satisfactory performance in general
during the outbreak of the COVID-19 pandemic and the related commissions and logistics expenses have increased accordingly, as well as the
increase of depreciation charges in relation to assets of points of sale in recent years as a result of the Group's effort in building up trendy and
efficient stores, the percentage of distribution expenses to revenue dropped by 1.4 percentage points during the year, which is mainly
attributable to: (1) bonuses of direct sales staff and outsource fees for human resources in stores have decreased in accordance with the
decrease in revenue of offline stores(2) variable rentals have decreased in accordance with the decline in sales revenue from retail terminal
during the outbreak of the COVID-19 pandemic, while certain stores enjoyed rent concessions, which has effectively reduced the rental

Published: May 2022
expensesand (3) the Group has also effectively controlled advertising and marketing expenses and daily expenses for sales staff. In view of the
above, the overall distribution expenses have decreased by RMB20,352,000 as compared to last year.
Administrative Expenses
For the year ended 31 December 2020, the Group's overall administrative expenses amounted to RMB805,058,000 (2019: RMB968,264,000),
accounting for 5.6% (2019: 7.0%) of the Group's total revenue with a year-onyear decrease of 1.4 percentage points. Administrative expenses
mainly comprised of staff costs, management consulting fees, office rental, depreciation and amortisation charges, technological
development fees, taxes and other miscellaneous daily expenses. The decrease in administrative expenses is mainly attributable to: (1) as
affected by the COVID-19 pandemic, in order to minimise the pressure currently facing and will be faced by the Group in the future due to the
pandemic, the Group focused on various costs and expenses control during the year. Through effective management measures, the Group has
reduced the expenses in relation to bonuses of officers, consultation fee expenses, travel costs and other expenses, achieving overall
profitability indicators(2) as affected by the COVID-19 pandemic, the Group has also controlled its investment in research and development
during the year, resulting in an overall decrease in relevant technological development expensesand (3) the Group has made provision for the
one-off goodwill impairment not related to operation of RMB36,394,000 in aggregate resulting from the realignment of the Group's overall
channel structure last year, while there was no such provision during the year. Consequently, the Group's overall administrative expenses
have decreased.
Share of Profit of Investments
Accounted for Using the Equity Method For the year ended 31 December 2020, the Group's share of profit of investments accounted for using
the equity method amounted to RMB83,487,000 (2019: RMB343,469,000). The Group shared the one-off gain of RMB269,925,000 in relation
to the resumption of a land parcel held by Shanghai Double Happiness Co., Ltd. ("Double Happiness, an associate of the Group) last year.
Significant Investment As of 31 December 2020, the significant investment held by the Group is the 47.5% equity interest in Double Happiness
(31 December 2019: 47.5%). The cost of the Group's investment in Double Happiness is RMB587,335,000 (31 December 2019:
RMB587,335,000). As of 31 December 2020, the carrying value of the interest in Double Happiness held by the Group calculated using the
equity method is RMB933,478,000 (31 December 2019: RMB916,959,000), representing a percentage of approximately 6.4% (31 December
2019: 7.3%) of the Group's total assets. Double Happiness is principally engaged in manufacturing and sales of sports products. As a world-
renowned brand of table-tennis related products, the Double Happiness brand owned by it is the supplier of equipment and gears for use in
various major tournaments in the PRC or globally. The Double Happiness brand products are mainly sold by means of wholesale and
integrated sports goods shops. Double Happiness has relatively stable customer base in nearly 30 provinces and municipalities in the PRC. It
has put more resources in expanding its business presence in online sales in recent years. Leveraging its excellent product R&D and design
capabilities and long-established brand popularity, the Double Happiness brand manages to maintain its leading position in the domestic
market of similar products consistently. The investment in Double Happiness will create synergy with Li Ning brand in terms of sales and
marketing of brand products, tournament sponsorship and channel expansion.
Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) and the Adjusted EBITDA
For the year ended 31 December 2020, the Group's EBITDA amounted to RMB3,292,272,000 (2019: RMB2,707,649,000), representing a year-
on-year increase of 21.6%. For the year ended 31 December 2020, the adjusted EBITDA amounted to RMB3,292,272,000 (2019:
RMB2,474,118,000), representing a year-on-year increase of 33.1%. Despite the impact of the COVID-19 pandemic, the Group actively
adopted the measures of controlling costs and expenses, coupled with the increased subsidies received from the government, therefore the
Group has achieved relatively satisfactory results performance.
Reconciliations of EBITDA and the Adjusted EBITDA to profit for the year are as follows:
Finance Expenses- Net
For the year ended 31 December 2020, the Group's net finance expenses amounted to RMB31,591,000 (2019: RMB30,132,000). The slight
increase in net finance expenses was mainly due to the increase in the Group's interest expenses recognised on lease liabilities as a result of
the increase in the average number of stores capitalised as compared to last year. However, the aforesaid impact was partially offset by the
increase in interest income arising from the increase in the capital balance of the Group.
Income Tax Expense
For the year ended 31 December 2020, the income tax expense of the Group amounted to RMB549,381,000 (2019: RMB357,403,000) and the
effective tax rate was 24.4% (2019: 19.3%). Currently, the Group's income tax expense is almost in line with the standard level.
Overall Profitability Indicators

Published: May 2022
During the year, the Group's sales revenue slightly improved and gross profit margin remained flat as compared to last year, while expense
ratio decreased through its effective control over costs and expenses, thus the overall profitability indicators for the year ended 31 December
2020 improved significantly. During the year, the Group's profit attributable to equity holders amounted to RMB1,698,484,000 (2019:
RMB1,499,139,000and RMB1,265,608,000 after excluding the one-off profit and loss not related to operation), representing a yearon-year
increase of 13.3% (a year-on-year increase of 34.2% after excluding the one-off profit and loss not related to operation). The margin of profit
attributable to equity holders was 11.7% (2019: 10.8%and 9.1% after excluding the one-off profit and loss not related to operation). The
return on equity attributable to equity holders was 21.5% (2019: 23.2%and 19.9% after excluding the one-off profit and loss not related to
operation).
Provision for Inventories
The Group's policy in respect of provision for inventories for 2020 was the same as that in 2019. Inventories of the Group are stated at the
cost or net realisable value, whichever is lower. In the event that net realisable value falls below cost, the difference is taken as provision for
inventories. The Group considers that this policy can ensure appropriate provision for inventories made by the Group. As at 31 December
2020, the accumulated provision for inventories was RMB113,133,000 (31 December 2019: RMB132,687,000). During the second half of the
year, in order to minimise the impact of the COVID-19 pandemic, the Group focused on the inventory turnover of old products and made
timely adjustments on new products inventory to reduce the number of orders. The balance of the provision for inventories decreased along
with the decrease in gross value of inventories. The Group will continue to monitor the changes in inventory ageing so as to improve the
inventory ageing structure.
Expected Credit Loss Allowance
The Group's policy in respect of expected credit loss allowance for 2020 was the same as that in 2019. The expected credit loss allowance was
recorded at an amount equal to the lifetime expected credit losses of the trade receivables that do not contain a significant financing
component, and 12 months expected credit losses or lifetime expected credit losses of other receivables, depending on whether there has
been a significant increase in credit risk since initial recognition. As at 31 December 2020, the accumulated expected credit loss allowance was
RMB287,344,000 (31 December 2019: RMB267,315,000), among which the accumulated expected credit loss allowance for trade receivables
was RMB280,437,000 (31 December 2019: RMB258,193,000) and the accumulated expected credit loss allowance for other receivables was
RMB6,907,000 (31 December 2019: RMB9,122,000). The trade receivables and other receivables written off during the year as uncollectible
and the effect of exchange rate amounted to RMB10,437,000 (2019: RMB8,871,000). The overall settlements from franchised distributors
were satisfactory, while the gross value of trade receivables remained stable with a slight increase in revenue. Nevertheless, due to the
uncertainty resulting from COVID-19 pandemic, the expected credit loss allowance increased. The Group will continue to strengthen its
cooperation with franchised distributors in response to the negative impact may be brought by the pandemic in the future.
BUSINESS REVIEW
2020 was an extraordinary and unforgettable year. Affected by the COVID-19 pandemic, the world has undergone significant changes in many
aspects, including the global economy, politics and livelihood as well as operating modes of enterprises. With the endeavor of the Chinese
government and the general public in the past year, the Chinese economy was the first economy to recover from the worldwide COVID-19
pandemic with its economic aggregate exceeding RMB100 trillion, which indicates a new level of social productivity. Although the sports
industry was under short term pressure during the pandemic, the sports consumption market in the PRC remained active under the support
and promotion of national policies and governments at all levels. Further, the COVID-19 pandemic has enhanced public awareness of fitness
and health across China, resulting in an increase in consumption demand for sports and health products and in turn provided an additional
boost to sports consumption. Against such backdrop, we continued to focus on LI-NING's experience value and optimized our marketing
strategies based on the individual needs of consumers, thereby enhancing consumer experience continuously. Meanwhile, we strengthened
the core values of our brand and products with a focus on creating professional reputation of our products, and strived to keep ourselves
abreast of fashion trends. During the year, in conjunction with the prevention and control measures for the COVID-19 pandemic, the Group
strictly implemented effective internal and external control and stepped up its efforts in increasing revenue and reducing cost. By seizing
every potential business opportunity, the Group has realized positive revenue growth and continuous improvement of profitability and
maintained positive growth momentum in this extraordinary year. During the year, adhering to the core strategy of "Single Brand, Multi-
categories, Diversified Channels, we supported and deepened LI-NING's experience value comprehensively through consistent efforts in
optimizing and upgrading our products, channels and retail capability, as well as supply chain. In terms of products, we placed emphasis on
the professional aspects and highlighted the professional sports attributes of our products. Extra efforts have been made in research and
development of sports technology with an aim to optimize product performance continuously. Meanwhile, we paid close attention to the
aspect of cultural creativity and latest fashion trends in an attempt to inject new vitality into our professional sports products through
fashionable elements and diversified styles, which has not only offered diversified consumption experience to consumers, but also enhanced
our brand value. In terms of channels, we continued to optimize the structure of channels and stressed on enhancing the retail efficiency of
our stores with diversifying development in various channels as our main focus. In the post-pandemic era, we accelerated the deployment of
new retail businesses and consolidated the advantages of our online and offline platforms, which has effectively strengthened differentiated

Published: May 2022
consumption interaction and services. In terms of supply chain, we perfected the supply chain management system which is driven by
business needs and continuously established our own supply chain system to increase flexibility of our supply. We also advanced changes to
our supply chain system from passive production to proactive production.
Latest operational update for the fourth quarter of 2020
For the fourth quarter ended 31 December 2020, in respect of LI-NING point of sale ("POS) (excluding LINING YOUNG) which have been in
operation since the beginning of the same quarter of last year, the samestore-sales for the overall platform registered a low-teens growth on
a year-on-year basis. In terms of channels, retail (direct operation) channel registered a high-single-digit growth and wholesale (franchised
distributors) channel registered a mid-single-digit growth, while the e-commerce virtual stores business registered a lowthirties growth on a
year-on-year basis. For the fourth quarter ended 31 December 2020, the retail sell-through of LI-NING POS (excluding LI-NING YOUNG) for the
overall platform increased by mid-teens on a year-on-year basis. In terms of channels, offline channel (including retail and wholesale)
registered a low-teens growth, with retail channel increased by midsingle-digit and wholesale channel increased by low-teens, while the e-
commerce virtual stores business registered a mid-thirties growth. As at 31 December 2020, the total number of LI-NING POS (excluding LI-
NING YOUNG) in China amounted to 5,912, representing a net decrease of 140 POS since the end of previous quarter and a net decrease of
537 POS since the beginning of this year. Among the net decrease of 537 POS, direct retail accounts for a net decrease of 143 POS, and
wholesale accounts for a net decrease of 394 POS. As at 31 December 2020, the total number of LI-NING YOUNG POS in China amounted to
1,021, representing a net decrease of 31 POS since the end of previous quarter and a net decrease of 80 POS since the beginning of this year.
Extensively implementing the strategy of "Single Brand, Multi-categories, Diversified Channelsto enhance the efficiency of products and
channels.
NEW BUSINESS LI-NING YOUNG
Adhering to the corporate vision and group strategy, LI-NING YOUNG continued to explore and enhance brand image in 2020. It positioned
itself to be "the fashionable professional sports kidswear brand originated from Chinaand optimised the business model to drive brand
growth. – In respect of products, the Company launched professional sports products for kids enjoying sports. Based on this scenario, it
developed technology with professional functions for children, provided professional competition equipment for young athletes in China, and
built the reputation as a professional sports brand for kids with a focus on basketball and running products. At the same time, its lifestyle
products were supported by the professional sports business. The Company centred its kidswear business around sports lifestyle elements
and developed hero products to sustain business growth. – In terms of the supply chain, the Company continued to develop and enhance
supply chain resources to improve the supply chain system of the kidswear business. We consolidated our production processes and
resources advantages to minimise product cost, boost product efficiency, ensure product quality, optimize production procedures, promote
the flexible response of the supply chain system and facilitate efficiency upgrade. – For channel development, we focused on the mid-to-high
tier market, strengthened the shopping mall and clearance channels, and improved store image to promote channel efficiency and health. In
line with the omni-channel strategy of the Company, we actively expanded new retail channels and adapted to external changes to explore
new sales channels and business opportunities. – For brand marketing, we explored specific promotion and sales channels for kidswear such
as Mama's Community and members of Wechat groups by fully leveraging and consolidating promotion resources, including current KOLs,
sports experts, celebrities and business partners, as well as making use of various digital marketing platforms, with reference to the special
features of the kidswear business, thereby continuously exploring new sales channels while expanding brand and product influence. As of 31
December 2020, LI-NING YOUNG business covered 29 provinces, municipalities and autonomous regions with a total of 1,021 stores. Looking
forward, we will continue to intensely develop our kidswear business. Leveraging the LI-NING brand, we will enhance the marketing efforts of
the kidswear brand, take a product-focused approach to upgrade core product technology and design, and advance the exploration of market
demands and product categorization. Consistent efforts will be devoted to channel expansion, retail operations and supply chain resources, so
as to develop LI-NING YOUNG into a leading professional sportswear brand for kids in China.
HUMAN RESOURCES
In 2020, based on the strategic focus of the Company, the human resources department formulated targeted human resources strategy and
continued to optimize the organisation, incentive, talent management and corporate cultural system to cater to business needs. – Regarding
organisational development, in order to enhance operation efficiency, the Company has enhanced its retail operation and product control and
management capability by establishing two major business units, namely direct operation and wholesale, to reinforce the functions of the
sales headquarters. Moreover, the apparel and footwear research and development center has been established to speed up the
enhancement of product research and development capability, while respective business departments for badminton and table tennis have
been set up to promote the development of the multi-categories strategy. – In terms of talent management, the Company controlled the
number of basic staff and actively recruited mid- to high-end talents in an effort to accelerate the improvement of the overall capability of its
staff. It has also expedited the nurturing of internal talents and building its talent reserves by training management trainees and retail talents
on an ongoing basis. – In terms of remuneration and benefits, in line with the changes of business model, the Company optimized the
incentive sharing system by focusing its resources on core staff. As such, incentive resources have been redirected towards staff in core
positions that is able to drive performance growth and enhance organizational capabilities, thereby encouraging staff to create value with
their job positions. – Regarding culture and staff relationship, the Company improved its business and culture management system to

Published: May 2022
stimulate organizational and employees' vitality, and continued to optimize its welfare schemes and career development system, aiming to
further develop the core values of the Company, improve staff satisfaction and engagement and increase its staff's sense of honor and
mission. In the future, we will optimize our organisational efficiency and accelerate the development of talent teams with the aim of achieving
sustainable growth of the Company and enhancing sustainable profitability. In addition, we will establish a new incentive mechanism based
on new short-term goals and medium- and long-term strategic plans to reinforce the nurturing of retail talents. We will effectively manage
the investments in human resources, while continuing to strengthen our organisational capacity, strictly manage and control the number of
staff and enhance the overall performance and efficiency of staff so as to give full support to the Company's strategic goal. As at 31 December
2020, the Group had 3,625 employees (31 December 2019: 3,783 employees), among which 3,466 employees were at the Group's
headquarters and retail subsidiaries (31 December 2019: 3,610 employees), and 159 employees were at other subsidiaries (31 December
2019: 173 employees), and 159 employees were at other subsidiaries (31 December 2019: 173 employees).
OUTLOOK
In addition to being an extraordinary year, the Year 2020 also marked the 30th anniversary of establishment of LI-NING brand. Having gone
through multiple ups and downs in the industry, we are ever more focused and confident to cope with challenges encountered. In 2021, we
will consistently adhere to the strategy of "Single Brand, Multi-categories, Diversified Channels, remain devoted to create LI-NING's
experience value and strengthen the core business in all aspects in order to promote sustainable business growth of the Group: – In respect of
products, we will continue to focus on product functions and technological innovation. At the same time, we will enhance our capability of
precisely analyzing fashion trends and sports cultures, striving to provide consumers with diversified consumption experience, enhance
consumers' loyalty and deepen our brand influence– In respect of channel development, we will focus on enhancing the efficiency and
promoting the development of big stores with high efficiency. We will also accelerate the synergistic operation of the omni-channel by
establishing diversified sales channel network and optimizing the structure of channels, so as to maximize the efficiency of our sales channels–
In respect of retail operation and supply chain, we will optimize the standards of store operation and improve store management ability, as
well as improve the online and offline integrated operation mode on the basis of both product and consumption experience. Meanwhile, we
will continue to consolidate and optimize the supply chain system to continue enhancing the capability in terms of our own supply chain
management and research and development regarding application of technology and knowledge– In respect of marketing, we will make full
use of digitalization to further strengthen our comprehensive marketing layout with an aim to expand the consumer coverage. Based on
actual consumption demand, we will keep abreast of hot topics and trends to increase popularity of our brand and convey our brand value– In
respect of new business, enhancing single store profitability will remain as our major development goal. We will make reasonable and
prudent use of resources to explore business opportunities and market potential, in order to foster new opportunities for the Company's
profit growth in the long run. Along with the continuous growth of the national economy and national consumption, sports consumption has
become the key driving force of the sports industry and plays a vital role in nurturing healthy lifestyle. We strongly believe that there will be
promising prospects and strong demand for the sports industry in the future. As we headed into the end of 2020, although the COVID-19
pandemic has yet come to an end, the development of vaccine was a "morale boosterto the general public. Hence, the socioeconomic and
consumption sentiment in the PRC improved gradually amid strict and orderly implementation of measures for pandemic prevention and
control. In view of consumers' demand for diversified products in respect of physical and mental health and living standards, the sports
industry has achieved breakthroughs and advancement continuously and becomes widely accepted by the general public in a more
diversified, refined and commercialized manner. As one of the leading enterprises in the professional sports industry in the PRC, the Group
kept pace with industry development to constantly capture new opportunities and embrace new challenges and developments. Under the
strong support of the national policies, we will continue to proactively explore and broaden room for business development, establish a more
professional and unique image for LI-NING brand, and bring the spirit of "Anything is Possibleinto real practice.

Published: May 2022
Section 5 – Appendix
The data and analysis within this report is driven by GlobalData.
GlobalData gives you key information to drive sales, investment and deal making activity in your business.
Our coverage includes 200,000 + reports on 185,000+ companies (including 150,000+ private) across 200+ countries and 29 industries. The
key industries include Alternative Energy, Oil & Gas, Clean Technology, Technology and Telecommunication, Pharmaceutical and Healthcare,
Power, Financial Services, Chemical and Metal & Mining.
Methodology
GlobalData company reports are based on a core set of research techniques which ensure the best possible level of quality and accuracy of
data. The key sources used include:
• Company Websites
• Company Annual Reports
• SEC Filings
• Press Releases
• Proprietary Databases
Currency Codes
Currency Code Currency
CNY Renminbi
GlobalData
Ratio Definitions
Capital Market Ratios
Capital Market Ratios measure investor response to owning a company's stock and also the cost of issuing stock.
Price/Earnings (P/E) ratio is a measure of the price paid for a share relative to the annual income earned
per share. It is a financial ratio used for valuation: a higher P/E ratio means that investors are paying more
Price/Earnings Ratio
for each unit of income, so the stock is more expensive compared to one with lower P/E ratio. A high P/E
(P/E)
suggests that investors are expecting higher earnings growth in the future compared to companies with a
lower P/E. Price per share is as of previous business close, and EPS is from latest annual report.
Calculation: Market Cap / Net Income
Enterprise Enterprise Value/EBITDA (EV/EBITDA) is a valuation multiple that is often used in parallel with, or as an
Value/Earnings before alternative to, the P/E ratio. The main advantage of EV/EBITDA over the PE ratio is that it is unaffected by a
Interest, Tax, company's capital structure. It compares the value of a business, free of debt, to earnings before interest.
Depreciation & Price per share is as of previous business close, and shares outstanding last reported. Other items are from
Amortization latest annual report.
(EV/EBITDA) Calculation: {(Market Cap + Debt + Minority Interest + Preferred Stock (Redeemable + Non-
Redeemable) - Cash & Cash Equivalents)} / (Operating Income + Depreciation + Amortization)
Enterprise Value/Sales (EV/Sales) is a ratio that provides an idea of how much it costs to buy the company's
sales. EV/Sales is seen as more accurate than Price/Sales because market capitalization does not take into
account the amount of debt a company has, which needs to be paid back at some point. Price per share is
Enterprise Value/Sales as of previous business close, and shares outstanding last reported. Other items are from latest annual
report.
Calculation: {(Market Cap + Debt + Minority Interest + Preferred Stock (Redeemable + Non-
Redeemable) - Cash & Cash Equivalents)} / Revenue
Enterprise Enterprise Value/Operating Profit measures the company's enterprise value to the operating profit. Price

Published: May 2022
Value/Operating Profit per share is as of previous business close, and shares outstanding last reported. Other items are from latest
annual report.
Redeemable) - Cash & Cash Equivalents)} / Operating Income
Enterprise Value/Total Assets measures the company's enterprise value to the total assets. Price per share
Enterprise Value/Total is as of previous business close, and shares outstanding last reported. Other items are from latest annual
Assets report.
Redeemable) - Cash & Cash Equivalents)} / Total Assets
Dividend Yield shows how much a company pays out in dividends each year relative to its share price. In
Dividend Yield
the absence of any capital gains, the dividend yield is the return on investment for a stock.
Calculation: Annual Dividend per Share / Price per Share
GlobalData
Equity Ratios
These ratios are based on per share value.

Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of
Earnings per Share (EPS)
common stock. EPS serves as an indicator of a company's profitability.
Calculation: Net Income / Weighted Average Shares
Dividend per Share Dividend is the distribution of a portion of a company's earnings, decided by the board of
directors, to a class of its shareholders.
Dividend Cover Dividend cover is the ratio of company's earnings (net income) over the dividend paid to shareholders.
Calculation: Earnings per share / Dividend per share
Book Value per Share measure used by owners of common shares in a firm to determine the level of safety
Book Value per Share associated with each individual share after all debts are paid accordingly.
Calculation: {Shareholders Equity - Preferred Stock (Redeemable + Non-Redeemable)} / Outstanding
Shares
Cash Value per Share is a measure of a company's cash (cash & equivalents on the balance sheet) that is
Cash Value per Share
determined by dividing cash & equivalents by the total shares outstanding.
Calculation: Cash & equivalents / Outstanding Shares
GlobalData
Profitability Ratios
Profitability Ratios are used to assess a company's ability to generate earnings, based on revenues generated or resources used. For
most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that
the company is doing well.
Gross margin is the amount of contribution to the business enterprise, after paying for direct-fixed and
Gross Margin
direct-variable unit costs.
Calculation: (Gross Profit / Revenue}*100
Operating Margin Operating Margin is a ratio used to measure a company's pricing strategy and operating efficiency.
Calculation: (Operating Income / Revenue) *100
Net Profit Margin is the ratio of net profits to revenues for a company or business segment - that shows
Net Profit Margin
how much of each dollar earned by the company is translated into profits.
Calculation: (Net Profit / Revenue) *100
Profit Markup Profit Markup measures the company's gross profitability, as compared to the cost of revenue.
Calculation: Gross Income / Cost of Revenue
PBIT Margin (Profit Profit Before Interest & Tax Margin shows the profitability of the company before interest expense &

Published: May 2022
Before Interest & Tax) taxation.

Calculation: {(Net Profit+Interest+Tax) / Revenue} *100
PBT Margin (Profit
Profit Before Tax Margin measures the pre-tax income over revenues.
Before Tax)
Calculation: {Net Income Before Tax / Revenue} *100
Return on Equity measures the rate of return on the ownership interest (shareholders' equity) of the
Return on Equity common stock owners.
Calculation: (Net Income / Shareholders Equity)*100
Return on Capital Employed is a ratio that indicates the efficiency and profitability of a company's capital
Return on Capital
investments. ROCE should always be higher than the rate at which the company borrows; otherwise any
Employed
increase in borrowing will reduce shareholders' earnings.
Calculation: Operating Income / (Total Assets – Current Liabilities) * 100
Return on Assets is an indicator of how profitable a company is relative to its total assets, the ratio
Return on Assets
measures how efficient management is at using its assets to generate earnings.
Calculation: (Net Income / [Current Year Total Assets + Last Year Total Assets)/2])*100
Return on Fixed Assets measures the company's profitability to its fixed assets (property, plant &
Return on Fixed Assets
equipment).
Calculation: (Net Income / [Current Year Fixed Assets + Last Year Fixed Assets)/2]) * 100
Return on Working
Return on Working Capital measures the company's profitability to its working capital.
Capital
Calculation: {Operating Income / (Current Assets-Current Liabilities)} * 100
GlobalData
Cost Ratios
Cost ratios help to understand the costs the company is incurring as a percentage of sales.
Operating costs (% of Operating costs as percentage of total revenues measures the operating costs that a company incurs
Sales) compared to the revenues.
Calculation: (Operating Expenses / Revenue) *100
Administration costs (% Administration costs as percentage of total revenue measures the selling, general and administrative
of Sales) expenses that a company incurs compared to the revenues.
Calculation: (Administrative Expenses / Revenue) *100
Interest costs (% of Interest costs as percentage of total revenues measures the interest expense that a company incurs
Sales) compared to the revenues.
Calculation: (Interest Expenses / Revenue) *100
GlobalData
Liquidity Ratios
Liquidity ratios are used to determine a company's ability to pay off its short-terms debts obligations. Generally, the higher the value
of the ratio, the larger the margin of safety that the company possesses to cover short-term debts. A company's ability to turn short-
term assets into cash to cover debts is of the utmost importance when creditors are seeking payment. Bankruptcy analysts and
mortgage originators frequently use the liquidity ratios to determine whether a company will be able to continue as a going concern.
Current Ratio measures a company's ability to pay its short-term obligations. The ratio gives an idea of the
company's ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash,
Current Ratio inventory, receivables). The higher the current ratio, the more capable the company is of paying its
obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they
came due at that point.
Calculation: Current Assets / Current Liabilities
Quick Ratio Quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets.

Published: May 2022
Calculation: (Current Assets - Inventories) / Current Liabilities

Cash ratio is the most stringent and conservative of the three short-term liquidity ratio. It only looks at the
most liquid short-term assets of the company, which are those that can be most easily used to pay off
Cash Ratio
current obligations. It also ignores inventory and receivables, as there are no assurances that these two
accounts can be converted to cash in a timely matter to meet current liabilities.
Calculation: {(Cash & Bank Balance + Marketable Securities) / Current Liabilities)}
GlobalData
Leverage Ratios
Leverage ratios are used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to
measure its ability to meet financial obligations. There are several different ratios, but the main factors looked at include debt, equity,
assets and interest expenses.
Debt to Equity Ratio is a measure of a company's financial leverage. The debt/equity ratio also depends on
Debt to Equity Ratio the industry in which the company operates. For example, capital-intensive industries tend to have a higher
debt-equity ratio.
Calculation: Total Debt / Shareholders Equity
Debt to capital ratio gives an idea of a company's financial structure, or how it is financing its operations,
along with some insight into its financial strength. The higher the debt-to-capital ratio, the more debt the
company has compared to its equity. This indicates to investors whether a company is more prone to using
Debt to Capital Ratio
debt financing or equity financing. A company with high debt-to-capital ratios, compared to a general or
industry average, may show weak financial strength because the cost of these debts may weigh on the
company and increase its default risk.
Calculation: {Total Debt / (Total Debt + Shareholders Equity)}
Interest Coverage Ratio is used to determine how easily a company can pay interest on outstanding debt,
Interest Coverage Ratio
calculated as earnings before interest & tax by interest expense.
Calculation: Operating Income / Interest Expenses
GlobalData
Efficiency Ratios
Efficiency ratios measure a company's effectiveness in various areas of its operations, essentially looking at maximizing its use of
resources.
Fixed Asset Turnover ratio indicates how well the business is using its fixed assets to generate sales. A
higher ratio indicates the business has less money tied up in fixed assets for each currency unit of sales
Fixed Asset Turnover
revenue. A declining ratio may indicate that the business is over-invested in plant, equipment, or other
fixed assets.
Calculation: Revenue / [Current Year Fixed Assets + Last Year Fixed Assets)/2]
Asset turnover ratio measures the efficiency of a company's use of its assets in generating sales revenue to
Asset Turnover the company. A higher asset turnover ratio shows that the company has been more effective in using its
assets to generate revenues.
Calculation: Revenue / [Current Year Total Assets + Last Year Total Assets)/2]
Current Asset Turnover Current Asset Turnover indicates how efficiently the business uses its current assets to generate sales.
Calculation: Revenue / [Current Year Current Assets + Last Year Current Assets)/2]
Inventory Turnover ratio shows how many times a company's inventory is sold and replaced over a period.
Inventory Turnover A low turnover implies poor sales and, therefore, excess inventory. A high ratio implies either strong sales
or ineffective buying.
Calculation: Cost of Goods Sold /[Current Year Inventory + Last Year Inventory)/2]
Working Capital Working Capital Turnover is a measurement to compare the depletion of working capital to the generation
Turnover of sales. This provides some useful information as to how effectively a company is using its working capital
to generate sales.

Published: May 2022
Calculation: Revenue / (Current Assets – Current Liabilities)

Capital Employed Capital employed turnover ratio measures the efficiency of a company's use of its equity in generating sales
Turnover revenue to the company.
Calculation: Revenue / (Total Assets – Current Liabilities)
Capex to Sales ratio measures the company's expenditure (investments) on fixed and related assets'
Capex to sales
effectiveness when compared to the sales generated.
Calculation: (Capital Expenditure / Revenue) *100
Net income per Net income per Employee looks at a company's net income in relation to the number of employees they
Employee have. Ideally, a company wants a higher profit per employee possible, as it denotes higher productivity.
Calculation: Net Income / No. of Employees
Revenue per Employee measures the average revenue generated per employee of a company. This ratio is
Revenue per Employee most useful when compared against other companies in the same industry. Generally, a company seeks the
highest revenue per employee.
Calculation: Revenue / No. of Employees
Efficiency Ratio is used to calculate a bank's efficiency. An increase means the company is losing a larger
Efficiency Ratio percentage of its income to expenses. If the efficiency ratio is getting lower, it is good for the bank and its
shareholders.
Calculation: [Non-interest expense / (Net Interest Income + Non-Interest Income)] * 100
GlobalData
Notes
• Financial information of the company is taken from the most recently published annual reports or SEC filings
• The financial and operational data reported for the company is as per the industry defined standards
• Revenue converted to USD at average annual conversion rate as of fiscal year end
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Li Ning Co LTD (2331)

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Li Ning Co Ltd (2331)

Financial and Strategic SWOT Analysis Review

Report Code: GDCPG30975FSA

Li Ning Co Ltd Global Sports Equipment Market Counterfeit Products Market

Market Cap (million CNY) 132,563

Source: Annual Report, Company Website, Primary and Secondary

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Ratio Definitions .......................................................................................................................................................................... 39

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Section 1 - About the Company

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Li Ning Co Ltd - Key Employees

Name Job Title Board Level Since Age

LI Ning Chairman, Joint Chief Executive Executive Board 2015 59

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Li Ning Co Ltd - Key Employee Biographies

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Li Ning Co Ltd - Major Products and Services

Li Ning Co Ltd, Major Products and Services

Apparel for Men and Women

Outdoor Sports Products

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Li Ning Co Ltd - History

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Li Ning Co Ltd - Company Statement

Continue to optimize the operation model leading to ongoing improvement in profitability

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Li Ning Co Ltd - Locations And Subsidiaries

Other Locations & Subsidiaries

Li Ning Co Ltd, Other Locations

Unit 3301, 33/F., BEA Tower

Li Ning Co Ltd, Subsidiaries

Shanghai Yue Ao Sports Goods Co., Ltd. RealSports Pte Ltd.

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Chongqing Yue Ao Sports Goods Sales Co., Ltd

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Section 2 – Company Analysis

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Li Ning Co Ltd - Business Description

Product Category: Equipment and Accessories

Product Category: Footwear

Geographical Segment: International

Geographical Segment: The PRC

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Geographical Segment: The PRC Market

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Li Ning Co Ltd - Corporate Strategy

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Li Ning Co Ltd - SWOT Analysis

Li Ning Co Ltd - Strengths

Strength - Financial Performance

Strength - Liquidity Position

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Li Ning Co Ltd - Weaknesses

Weakness - Huge Debt

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Li Ning Co Ltd - Opportunities