Li Ning earns 50 million Anta and Xtep's performance soars
On August 13, Li Ning (02331.HK) released the 2021 mid-year performance report.
As of June 30, Li Ning's revenue was 10.197 billion yuan, a year-on-year increase of 65%; net profit exceeded 1.962 billion yuan, a year-on-year increase of 187%; gross profit margin increased by 6.4 percentage points to 55.9%.
Many of its indicators are at the highest level in history since its listing in 2004.
Li Ning said that the gratifying results are due to the continuous return of the Group's various sales improvement measures during the epidemic.
At the same time, it has benefited from the increased demands of domestic consumers for a healthy life, and the full affirmation and strong support of domestic sports brands.
The Red Star Capital Bureau noted that not only Li Ning’s performance is improving, but from the current performance forecasts released by many domestic sports brands such as Anta (02020.HK) and Xtep International (01368.HK), revenue in the first half of the year has increased significantly.
Li Ning's revenue over 10 billion in the first half of the year, net profit soared by 187%
On August 13, Li Ning released a mid-year performance report, with multiple indicators at the highest level in history since Li Ning went public in 2004.
In terms of revenue, as of June 30, Li Ning's revenue was 10.197 billion yuan, a year-on-year increase of 65%, which means that Li Ning earned more than 50 million yuan a day in the first half of the year.
The Red Star Capital Bureau found that the clothing business has greatly increased Li Ning’s overall performance, with revenue growth of 72% year-on-year; footwear growth followed closely with revenue growth of 57%, and the two combined contributed 95% of the total revenue. .
However, these incomes are basically derived from domestic consumers, and the international market has not yet opened.
The semi-annual report shows that during the reporting period, Li Ning's international market sales were only 122 million yuan, and its revenue accounted for only 1.2%.
In terms of profitability, Li Ning's net profit in the first half of 2021 exceeded 1.962 billion yuan, a year-on-year increase of 187%; gross profit margin increased by 6.4 percentage points to 55.9%.
Li Ning explained that during the reporting period, retail discounts have improved significantly. Part of the inventory provision has been reduced due to the decline in the original value of inventories and the improvement in inventory age; in addition, the proportion of direct sales and e-commerce channels with higher gross profit margins has increased, etc. The reason led to the increase in gross profit margin.
The Red Star Capital Bureau noted that the specific reasons for the substantial increase in revenue came from the contribution of Li Ning's various sales channels.
First, the direct sales of offline terminals increased sharply by 88% year-on-year. Li Ning said this was because most of the direct-operated stores were established in second-tier and above domestic cities. The impact of the epidemic in the same period last year was particularly noticeable, and the direct-operated stores achieved a greater recovery in this period; The turnover of e-commerce channels and franchised dealers increased significantly, increasing by 77.8% and 47.7% respectively.
Although Li Ning's main flow comes from offline stores, Li Ning not only did not expand the store, but even chose to close it.
According to the financial report, as of June 30, 2021, Li Ning brand (including Li Ning core brand and Li Ning YOUNG) regular stores, flagship stores and other offline sales points totaled 6,745, a decrease of 188 from December 31 last year; 63 dealers , Reduce by 2.
Li Ning explained that the main purpose of closing stores is to optimize channels and efficiency, accelerate the construction of high-quality channels, gather large shopping malls, continue to promote the implementation of high-efficiency stores such as flagship stores, and continue store optimization to accelerate the processing of loss-making, inefficient and micro-scale stores.
After the release of Li Ning’s financial report, on August 13, Goldman Sachs released a research report that Li Ning’s performance in the first half of the year exceeded expectations and the gross profit margin was strong. It gave a 12-month target price of 103 Hong Kong dollars per share.
Anta, Xtep, etc. all have good performance
Adi, Nike's performance falls short of expectations
Since March this year, the sales of domestic sports brands have increased significantly.
Except for Li Ning, domestic brands such as Xtep, Anta, and 361 Degrees all performed well in the first half of 2021.
Anta's performance forecast for the first half of 2021 released in June showed that the company's operating profit in the first half of the year will increase by at least 55% over the same period of the previous year.
Anta said that in the first half of this year, the retail value of Anta's main brand increased by 35%-40% year-on-year, the retail value of FILA brand products increased by 50%-55% year-on-year, and the retail value of its other brand products increased by 90%-95%.
In July, Xtep International issued a profit forecast, stating that the comprehensive profit in the first half of 2021 will increase by no less than 65% year-on-year, and the year-on-year growth rate of retail sales will be around 40%-45%.
In addition, Hongxing Erke, Guirenniao and other domestic brands that once faded out of consumers' sight have once again attracted attention for donating money to help Zhengzhou during the Henan floods.
Hongxing Erke has rushed to the hot search on Weibo many times, and its Douyin live broadcast room has set a record of likes, and its sales have increased several times. At one time, the system crashed due to too many orders.
On the other hand, the performance of brands such as Adidas (ADDYY.US) and Nike (NKE.US) in the Chinese market fell short of expectations.
Adidas’s second-quarter 2021 financial report shows that group revenue increased by 52% year-on-year, of which North America’s revenue growth was 87%, Europe, the Middle East and Africa’s revenue growth was 99%, Latin America’s growth rate was 230%, and the Asia-Pacific region’s growth rate was 230%. Only 66%.
Among them, Greater China was the only region with negative revenue growth for Adi in the second quarter, with revenue falling 16% year-on-year.
The Red Star Capital Bureau learned that the Greater China Region contributed about 35% of Adidas' revenue last year, and now this proportion has dropped to 19.8%.
According to a report by AI Finance and Economics, Adidas CEO Casper Rosted has to admit that “the demand in the Chinese market has now been biased towards local Chinese brands rather than global brands.”
Nike's situation is relatively better.
On July 20, Nike released its fiscal 2021 annual report. During the reporting period, operating income was US$44.538 billion, a year-on-year increase of 19.08%; net profit attributable to common shareholders of the parent company was US$5.727 billion, a year-on-year increase of 125.56%.
Among them, Nike’s sales in Greater China were US$1.933 billion, an increase of 17% year-on-year, but this figure was still lower than Wall Street’s expectations of US$2.2 billion.
Chengdu Commercial Daily-Red Star News Reporter Yu Yao and Xie Yutong