FINANCIAL HIGHLIGHTS
During the year, we pursued stable progress and took proactive measures in planning, and recorded the following operating results:
- Revenue increased by 7.0% to
- Net operating cash inflow increased by 19.8% to
- Net profit attributable to equity holders was
Working capital remained at a healthy level:
- The percentage of gross average working capital to revenue was 7.6%
- The cash conversion cycle was 35 days
The Board has recommended the payment of a final dividend of
OPERATIONAL HIGHLIGHTS
The retail sell-through for the overall platform increased by low-teens, including online and offline channels.
Channel inventory decreased by mid-single-digit comparing to end of last year. The inventory turnover and ageing structure remained at a healthy level.
Offline channel new product sell-through increased by low-teens.
Financial Results
In 2023, the Group continued to focus the core strategy of "Single Brand, Multi-categories, Diversified Channels" with a focus on professional sports in the five core categories, namely basketball, running, fitness, badminton, and sports casual. Through its efforts dedicated to brand reputation and product innovation, the Group has developed a comprehensive layout of functional products. In 2023, the Group's revenue grew steadily, demonstrating strong resilience. During the year, the Group's revenue for the year ended
In 2023, in the context of the overall recovery accompanied by challenges in the domestic market, the Group prioritized the optimization of business quality and efficiency, with a focus on the direction of steady development. During the year, the net profit attributable to equity holders was
In terms of cash flow management, the Group's net cash generated from operating activities during the year amounted to
Operational Summary
In 2023, the Group continued to focus on the core strategy of "Single Brand, Multi-categories, Diversified Channels" and optimized LI-NING's experience value continuously.
In terms of professional products, with a focus on the core categories of running, basketball, badminton, fitness and sports causal, the Group pressed ahead with innovation in sports technology and integrates Chinese culture and trendy sports designs to enhance its products trendiness. The Group also constantly improved product performance and enhanced the image of the LI-NING brand by means of technological innovation, so as to satisfy the growing consumer demand for sports products. The Group focused on building the competitive advantages of products from its core categories. Capitalizing on its continuous investment in research and development to promote product innovation, the Group strived to garner recognition among young consumers with its highly professional and fashionable quality sports products.
In respect of branding and marketing, the Group strengthened the universal marketing layout by focusing on the characteristics of the professional functions and sports casual category. Through the continuous cooperation with sports stars and professional events, the Group has reinforced the professional image of LI-NING's professional products among consumers and further scaled up its consumer groups. Moreover, LI-NING further diversified the marketing strategies for the sports causal category. A platform was also established for direct communication with consumers. Such measures have helped increase the influence of LI-NING brand and consolidate consumers' loyalty to the brand, and thus realized omni-channel and multi-dimensional exposure of its products. Meanwhile, the Group enhanced operational efficiency and competitiveness through organizational optimization and capability development, paving the way for an organizational dynamic and skill set that supported the brand's vitality.
In respect of channel management, the Group was committed to optimizing its channel structure and enhancing the channel efficiency by proactively closing low-efficiency stores, thereby improving the overall store structure. The Group continued to expand its business presence in premium shopping malls and outlets. During the year, the Group achieved a key breakthrough in premium outlets. It carefully planned the opening of stores throughout
As of
In terms of store operation, through continuous exploration and optimization of the single-store operation model, the Group has upgraded the single-store operation model to the stage 2.0, developing a system comprehensively optimized from planning to execution and from processes to results. The Group also established an additional retail operation and execution team to realize a management loop of "order giving by headquarters, information confirmation by retail end, business execution by stores and supervision by headquarters" and ensure the normalized management of business execution. Meanwhile, the development of the four core competencies in the new retail business enabled the Group to enhance interaction among communities and profitability driven by live streaming, improve the out-of-store shopping experience and upgrade the overall consumer experience through standardized content production processes and digital tools.
In respect of logistics system, the Group advanced the development of regional central warehouses and ensured transparency throughout the logistic information chain of products through logistics informatization.
In respect of supply chain, the Group has further strengthened its flexible supply system, giving play to its technological advantages in products. Focusing on building a sustainable supply chain, the Group has shifted from "passive production" to "proactive production", and created greater value through further development of the "value supply chain" by reducing wastage and enhancing efficiency. At the same time, the Group has established an equal and win-win relationship with the suppliers to jointly fulfil its environmental and social responsibilities, promoted the development of environmentally-friendly products, and continuously upgraded its product strengths through innovations to provide better consumer experience.
In respect of the e-commerce, in 2023, despite the profound changes and severe challenges faced by the entire e-commerce industry, the e-commerce team of
In terms of kidswear business,
OUTLOOK
The Group will continue to follow its core strategy, namely the "Single Brand, Multi-categories, Diversified Channels" strategy, focus on the seven major segments under business transformation, and push forward the implementation of key strategic tasks in an orderly manner, and accelerate the pace of reforms in order to further promote the growth and profitability of the LI-NING brand.
-- Implement a dual-driven strategy of merchandise and products. The Group will continue to improve its product portfolio and optimize the types of product and price matrix. Meanwhile, the Group will also continue to explore new sports scenarios, develop the market segments of sports product category, and incorporate fashion elements into its professional products to better showcase the sports fashion culture and provide consumers with diversified consumer experiences, thereby expanding the influence of the brand;
-- Enhance investment in research and development and promote innovation-driven development. The Group will continue its efforts in the research and development for improvement of product functions and technological innovation, so as to provide consumers with more professional and functional sports products integrated with fashionable elements, which will better showcase the sports fashion culture. Meanwhile, the Group will continue to optimize the professional product matrix and increase the proportion of professional products by upgrading the fabrics and enhancing the technological attributes of products;
-- Accelerate the establishment of the general e-commerce business system. The Group will strengthen cooperation with mainstream e-commerce platforms to expand online sales channels and increase brand exposure and sales. It will also further enhance the user experience and functions of e-commerce platforms, optimize the shopping process and increase the conversion rate. In addition, through precise marketing strategies, the Group is able to enhance user stickiness and loyalty, resulting in a two-way transformation of the online and offline consumption scenarios;
-- Optimize the efficient retail model. The Group will continue to optimize its efficient channel layout to provide more excellent product experience, shopping experience and sports experience. In the future, the key objective of the Group is to accelerate the rectification of low-efficiency stores with the focus on enhancing store efficiency as our main goal. On the basis of refined operations, the Group will continue to improve the efficient retail model and develop the replicability and scalability of the model, so as to provide professional safeguard for the new business layout;
-- Upgrade the supply chain system. The Group will continue to strengthen the building of fundamental supply chain capabilities and improve its structure to enhance the flexibility and rapid response ability of the supply chain in order to flexibly adapt to the market changes. It also matches with high quality supply chain resources to ensure the safety, efficiency and stability of LI-NING's supply chain. New supply chain resources will be introduced according to the changes in demands to further optimize the supply chain matrix. The Group aims to accelerate the upgrade and reform of product development progress system by continuous reform and innovation, creating competitive advantages and deeply cooperating with strategic suppliers. It also facilitates the establishment of supply chain information system to achieve the digital transformation of both upper and lower streams of supply chains;
-- Develop marketing consolidation and closed-loop consumer operation. The Group will place emphasis on the investments in marketing resources and strive to upgrade our professional brand image as well as enhance consumers' awareness of LI-NING brand with an aim to establish the brand as their first-choice professional sports brand. The Group will actively promote community operations to attract marketing traffic, and accomplish the conversion of high-quality traffic into revenue, thereby fostering a completely closed-loop consumer operation. In 2024, the Group will make full use of its professional resources to conduct universal marketing oriented with competitions and events, organize online and offline community operations to strengthen consumer awareness. Meanwhile, it will actively develop long-term relationship with customers based on brand values;
-- Carry out a comprehensive personnel system reform. By optimizing the internal management processes and incentive mechanisms, the creativity and motivation of employees will be encouraged. The Group will build an efficient and professional team by nurturing and introducing high-calibre talents. Through these measures, the Group expects to enhance the overall organizational effectiveness and ensure that the Group will maintain its leading position under fierce market competition.
Mr. Li Ning, Executive Chairman and Joint CEO of the Group, concluded, "With the continuous support and encouragement of the national policies, the Group will continue to delve into
About the Group
In addition to its core LI-NING brand, the Group also manufactures, develops, markets, distributes, sells various sports products which are selfowned by or licensed to the Group, including Double Happiness (table tennis),
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