What is Growth Strategy and Future Prospects of Li-Ning Company?

The company allocated approximately CNY 600 million to R&D in 2024, with a total planned investment of CNY 1.2 billion for the year. This represents an increase in R&D investment to 2.4% of revenue in 2024.

Key innovations include 'Cloud Technology' in footwear and the 'Beng' midsole platform. In November 2024, a new ultra-light midsole technology was launched, focusing on the 'elasticity-to-weight ratio' concept.

The lightweight technology platform has evolved from a single technology to the parallel development of four major technologies over six years. This demonstrates a significant advancement in their product development capabilities.

In 2024, CNY 200 million was invested in green technologies, with over 50% of materials sourced from sustainable suppliers. The 'Green Production Initiative' reduced waste by 15%.

In January 2025, the company co-devised a product standard for 'Footwear Biodegradability Performance Evaluation.' By May 2025, they launched the first fully biodegradable professional sports shoes in the domestic market.

A CNY 400 million investment in customer service platforms in 2024 led to a 30% increase in engagement through digital channels. A customer feedback mobile app was also launched, boasting over 500,000 active users.

Revenue for the first half of 2025 reached RMB 14.817 billion, a 3.3% increase from RMB 14.345 billion in H1 2024.

Gross profit rose by 2.5% to RMB 7.415 billion, but the gross profit margin decreased by 0.4 percentage points to 50.0%.

Net profit attributable to equity holders was RMB 1.737 billion, down from RMB 1.952 billion in H1 2024, with a net profit margin of 11.7% compared to 13.6% previously.

As of June 30, 2025, the company maintained a strong liquidity position with cash and cash equivalents totaling RMB 11.798 billion.

The Li-Ning growth strategy involves continued investment in sports resources and brand development, aiming to capitalize on economic recovery and market stabilization for future revenue reacceleration.

Analysts foresee moderate growth in the coming years, with a focus on the company's ability to manage costs and leverage its brand in a competitive market, as discussed in the Competitors Landscape of Li-Ning.

Intense competition and a slowdown in China's sportswear sector since 2023 necessitate a focus on stability. Weak consumer sentiment has already impacted profitability, leading to an 11% drop in interim profit for the first half of 2025.

Li-Ning's higher product prices make it more susceptible to consumers trading down to more affordable options. This is a key consideration influencing its cautious revenue guidance for 2025.

Retail sell-through performance was flat in 2024, with offline channels seeing declines in both average selling price and sales volume. While e-commerce grew by mid-teens, inventory levels rose, and turnover months increased to 4.0 by the end of 2024.

To improve efficiency, the company closed 232 self-operated stores and opened 145 new ones over the past year. This move aims to reduce costs and enhance operational effectiveness.

Potential regulatory changes and vulnerabilities within the supply chain present ongoing risks. The company is actively working to mitigate these through diversification and strategic partnerships.

Li-Ning is enhancing its supply chain by focusing on high-quality resources and improving its supplier network, particularly for premium and outdoor products. A flexible supply chain strategy is in place to closely monitor market demand.