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LI NING is seeking new opportunities amid stability.
On March 20, at the Conrad Hong Kong, LI NING's founder wore a dark suit and attended the earnings meeting with Co-CEO Qian Wei and CFO Zhao Dongsheng.
Under his and his colleagues' management, the company's operational foundation is solid, with 2025 revenue projected at 29.598 billion yuan, a year-on-year increase of 3.2%, and a net profit of 2.936 billion yuan, maintaining a net profit margin of 9.9%, which also exceeded expectations.
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LI NING is increasing its investment in top sports resources, such as the official partnership with the Chinese Olympic Committee, which the market initially estimated would significantly erode its profits.
At the earnings conference, the decision-makers led by LI NING raised the revenue guidance to a high single-digit growth rate, indicating an acceleration in growth. Coupled with stable financial performance, LI NING's stock price surged 8.6% that day, closing with a market value of 55.4 billion Hong Kong dollars.
&#34;Consolidating the foundation and actively expanding is the direction for the future.&#34;
Regarding the pace of development, Qian Wei responded that LI NING will always prioritize health and stability as the top priority, while also adopting a more proactive attitude and actions to explore opportunities in different subcategories, and will decisively invest where there is potential for business expansion.
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The space for China's sports industry remains vast.
According to Qian Wei, just in badminton rackets, 5.5 million units are sold annually, and there is ample potential in major segments such as sports leisure, women's fitness, and outdoor activities.
LI NING may have reached a turning point in a new development cycle.
Multiple Lines of Progress
For the LI NING team, there have always been suggestions to expand the brand.
The management has consistently insisted on deepening its focus on professional sports and firmly implementing the &#34;single brand, multiple categories, multiple channels&#34; strategy. The effectiveness of this strategy will be further validated in 2025.
Taking the running category as an example, leveraging unique technologies such as carbon core, fastest curve system, and LI NING's unique features, its professional running shoes are worn by top runners and are rapidly reaching a broader customer base.
According to LI NING himself, by 2025, the sales of its professional running shoes will exceed 26 million pairs, with over 11 million pairs sold from the three core new series: Ultra Light, Red Rabbit, and Flying Electric.
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&#34;The proportion of revenue from the running category has increased from 16% five years ago to 31%.&#34;
Qian Wei stated that in the highly competitive running market, one can easily fall behind. Based on professionalism, Li Ning has expanded its product matrix to include subcategories such as racing, daily training, and trail running, striving for a relative advantage.
By focusing on categories, even small niches can become big businesses.
The most prominent proof is Li Ning's badminton, which accounts for nearly 7 percentage points of revenue, with a scale of around 2 billion, and equipment revenue accounting for over 85%.
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&#34;We have taken a difficult but correct path—professional positioning.&#34;
Qian Wei mentioned that their badminton team has recently focused on professional equipment such as rackets and strings. For example, they developed the first domestically produced competitive badminton string L67N, which has continuously gained recognition from the market and professional teams, achieving an annual growth rate of around 30% as badminton sports gain popularity.
If they only pursued short-term business scale, they could easily sell T-shirts and other apparel products; however, such a business is like floating duckweed, lacking sustainability.
Thanks to the construction of the entire sports platform, the Li Ning team is transferring the ability and methodology of building advantageous categories to new categories and new demographics.
According to Li Ning himself, starting in 2025, the team will accelerate its layout in the outdoor category, focusing on three core scenarios: hiking, suburban camping, and urban commuting, primarily targeting the mass light outdoor market.
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It was revealed that since entering the outdoor category in 2024, the full-channel revenue has doubled year-on-year by 2025, and the first independent outdoor category store—COUNTERFLOW—will open in November 2025, exploring new pathways for accelerated growth.
&#34;The more sluggish the environment, the more we must persist in deepening our categories.&#34;
Regarding the relatively weak basketball market, Qian Wei responded that Li Ning will continue to invest in basketball, strengthen the core competitiveness of the category, and maintain a leading position, stating, &#34;Once the category warms up, we will be the first to rapidly expand our market share.&#34;
Currently, leveraging the expansion of multiple mainstream categories, the Li Ning platform is increasing investment and simultaneously incubating new categories in tennis and pickleball, just waiting for the right moment.
Ready to take off
In 2025, Li Ning will significantly expand top resources, with the biggest move being a renewed partnership with the Chinese Olympic Committee.
&#34;Every Li Ning employee can proudly accept this honor and mission.&#34; Last January, Li Ning, the Olympic champion, could not hide his excitement when he released an internal letter.
According to the agreement, from 2025 to 2028, the Li Ning brand will serve as the official sportswear partner for the Chinese Olympic Committee and the Chinese sports delegation
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The Milan Winter Olympics kicked off the first shot of this Olympic cycle.
During this period, Li Ning launched integrated marketing, spanning from the release of award equipment, the delegation's expedition to the entire event, accompanying and supporting the Chinese sports delegation to achieve the best performance in overseas Winter Olympics, significantly enhancing brand exposure.
According to third-party data from &#34;Miaozhen,&#34; during the Winter Olympics, the Li Ning brand ranked first in social media volume among sports brands across the internet; and third in overall social media volume across all categories.
Brokerage institutions predict that high-frequency, long-term international exposure is expected to drive terminal sales of core products, which is anticipated to provide strong support for annual performance.
Over the past year, Li Ning and his team have effectively connected this sponsorship right with products, operations, and marketing systems, expanding new categories and new demographics. For example, its newly launched &#34;Honor Gold Standard&#34; product line combines the logos of the Chinese Olympic Committee and Li Ning on the products.
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&#34;Consumers have a high recognition of the new series, which gives us a lot of confidence.&#34;
According to Qian Wei, starting from the fourth quarter of 2025, the &#34;Honor Gold Standard&#34; will be tested nationwide through pop-up and slow flash stores, with overall store performance exceeding team expectations. The product line is currently being expanded in breadth, and the first &#34;Li Ning Dragon Store&#34; is being prepared in Shanghai's central business district.
At the same time, Li Ning has added a partnership with the Chinese National Fencing Team, and deepened strategic cooperation with two top IPs: the National Space Administration's News and Publicity Center and the Palace Museum, completing key positioning.
The acquisition of a large number of top resources has led to a year-on-year increase of 445 million yuan in marketing expenses.
&#34;This indeed brings some pressure to the current financial statements; but in the medium to long term, this is something worth or necessary to do.&#34;
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Qian Wei stated at the earnings meeting that they will increase investment in core resources such as top events to continuously build momentum for medium to long-term growth.
It is worth mentioning that the management team led by Li Ning is simultaneously improving operational efficiency, which basically offsets the increase in related expenses, ensuring stable profits.
This once again indicates that Li Ning has sufficient capacity to absorb the investment in top resources, and due to the implementation of the &#34;single brand&#34; strategy, these resources can further solidify the brand's positioning at a high cost-performance ratio.
Steady Exploration
In the past few years, Li Ning's pace has been neither hurried nor anxious.
Currently, it boasts nearly 30 billion yuan in annual revenue, with net profits maintaining around 3 billion yuan, operating steadily, which basically aligns with the management's expectations
&#34;Attack where you should attack, defend where you should defend.&#34; Qian Wei stated that Li Ning's overall strategy has not changed, it does not focus on the short-term speed, but rather on sustainable and healthy growth.
Improving inventory control, product operations, and discount management efficiency are often prioritized higher in Li Ning Group.
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By 2025, its total inventory (before provisions) will be 2.852 billion yuan, with an inventory turnover period of 64 days, maintaining a low level. Among this, 79% are new products within 6 months, and only 7% are over a year old, indicating a healthy inventory age structure.
Currently, the financial resources that Li Ning can allocate are very ample.
By the end of 2025, its net cash will remain at a high level of 19.97 billion yuan, and there is almost no interest-bearing debt, with a net operating cash inflow of 4.852 billion yuan for the year.
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Nevertheless, its daily operations continue to pursue lean management.
For example, in terms of variable costs related to sales, Li Ning saved another 280 million yuan in a year, significantly alleviating the pressure from increased marketing budgets.
Of course, business challenges still exist.
For instance, with over 7,600 single stores, the monthly sales per store are about 284,000 yuan, and the overall offline revenue recorded a low single-digit decline for the year, with both foot traffic and average unit price decreasing. Qian Wei admitted that there is still significant room for improvement in the current store efficiency.
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He also publicly stated that Li Ning has not done well enough in deeply cultivating the sports leisure scene; more efforts are needed to meet the consumption demands of women and youth groups.
&#34;Under the strategy of a single brand, multiple categories, and multiple channels, our incremental growth comes from categories and channels.&#34;
Qian Wei said that while consolidating professional categories, they plan to push for more exploration in new categories and products such as sports leisure, outdoor, and Honor Gold Standard, as well as conduct more tests in new store formats and channel fields.
&#34;We hope to maintain a challenging stance, rather than a risky one,&#34; Qian Wei emphasized again.
(This article is for reference only and does not constitute investment advice)
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Li Ning Company announced at the earnings conference that it expects revenue to reach 29.598 billion yuan in 2025, with a net profit of 2.936 billion yuan and a net profit margin of 9.9%. Despite increasing cooperation with the Chinese Olympic Committee, market concerns about profit erosion arose, but Li Ning's stock price rose 8.6% on the same day. The company will continue to focus on professional sports and implement a "single brand, multiple categories, multiple channels" strategy, expecting sales of running shoes to exceed 26 million pairs, with the badminton business also performing strongly. Li Ning is at a turning point in a new development cycle

With a reserve of 20 billion in cash, LI NING is approaching a turning point in the new cycle