Li Ning reaches break-even point
Hong Kong listed Chinese sportswear giant Li Ning has issued a positive profit warning, with increased sales and a one off gain pushing it back into the black.
In a statement to the Hong Kong stock exchange, Li Ning says that based on the latest review of the unaudited management accounts of the group for the 11 months to November 30, and subsequent trading information available, “the group is expected to record an approximate break-even in terms of profit and loss” for the full year, compared to a loss of RMB781,481,000 (US$118 .7 million) for the previous full year.
The estimates do not take into account a net gain arising from the disposal of 10 per cent in Double Happiness announced on October 25, as this transaction has yet to be completed.
“The board believes that the expected turnaround in operating results is principally due to an increase in both the sales revenue and gross profit of the group and a decrease in expense ratio in 2015.
“These are products of the group’s commitment to improving direct retail store operating efficiency and profitability, enhancing long-term relationships with channel partners, as well as expanding eCommerce business.”
Full details of the company’s 2015 performance will be announced in March.