Lining'S Rapid Growth In Ten Years Stopped &Nbsp; Annual Revenue Is Expected To Drop By 5%.

On the 7 day, Li Ning Co issued a profit warning, and sales revenue in 2011 is expected to decrease by 5% over the same period.

Too much inventory is holding back its development.

Affected by this news, Li Ning Co stock prices fell 15.77%.

Coincidentally, Chen Yihong, who once held the position of general manager of Li Ning Co, now shares China's stock price down 7.20% on the same day.

In the first quarter of this year, China's trend of Kappa retail sales was down from last year's figure.

However, the decline in Li Ning Co performance is not the same as China's trend.

Over the past 10 years, Li Ning Co has increased its composite growth by more than 30% for ten consecutive years. Although the growth of performance in 2010 has shown signs of slowing down, Li Ning Co's revenue is 9 billion 480 million yuan, which is still up 13% year on year. In 2011, revenue growth has stopped abruptly. If we want to point out the chief culprit of this historical turn, too much inventory may be the first.

The impact of inventory problems on Li Ning Co performance has been very significant. Li Ning Co's earnings warning report shows that accounts receivable time increased by 20 days compared with the same period last year, and the turnover days of inventories could increase by about 25 days. According to the annual report of Li Ning Co, in 2010, the average period of trade receivable for the company was 52 days, with an average turnover period of 52 days.

A simple analogy, if Li Ning Co dealers sell goods and pfer money to Li Ning Co for 2 months, it may take 3 months.

Insiders told reporters that the products sold by the brand dealers could not be sold, and they could not be recovered. There was no money to buy Lining's new products, which led to a decrease in the income of Li Ning Co in the new financial year.

In 2010, Li Ning Co's inventory value was 806 million yuan, compared with 632 million yuan in 2009, an increase of 174 million yuan, an increase of 27.5% over the same period. In 2010, trade receivables amounted to 1 billion 610 million yuan, compared with 1 billion 70 million yuan in 2009, an increase of 50.5%.

The direct consequence of the shortage of dealer funds is the reduction of the order quantity of new goods.

In June, the end of June, the fourth quarter of 2011, the order volume of new products, Li Ning Co clothing and footwear products orders decreased, although the average retail price growth of more than 10%, but still made Li Ning Co annual sales revenue year-on-year decrease of about 5%.

Li Ning Co said it had accelerated its inventory problem.

Insiders say that the slowdown in China's performance is positioning, and China's positioning is in sports and fashion. This is indeed a differential positioning of the sporting goods market, but fashion is constantly changing, and more competitors are taking this road, resulting in weak growth in performance.

The stock problem of Li Ning Co is rooted in the over optimistic prospect of the sporting goods market in China, which is also a problem that other domestic sports brands need to face.

Analysts said that after the 2008 Beijing Olympic Games, Lining and other domestic sports brands were not priced internationally because their prices were closer to the actual level of Chinese consumers.

"Lining and other domestic sports products still set the growth target according to the previous growth rate, resulting in high inventory.

The inventory of some enterprises is much better than that of Li Ning Co. If we stop production, the inventory will be sold for two years.

It is time for the domestic sports brand to tighten their belts and lead a bitter life.

The analysts believe that.