Li Ning (02331) announced that on November 8, 2019, the company’s indirect wholly-owned subsidiary Li Ning Guangxi entered into an investment agreement with the Committee, and the Committee Conditionally agreed to assist Li Ning Guangxi in implementing the project after Li Ning Guangxi acquires the land use rights of the land through bidding, auction and listing.
The maximum investment amount of the project is approximately RMB 1.5 billion, including the land use for the acquisition of the land Rights costs and expenses involved in building a supply chain base. The investment amount is estimated based on the scale of the project and taking into account the investment in the construction of factories and supporting facilities, production line equipment and new technologies. The investment amount will be funded by the Group’s internal resources and capital injections from certain business partners of Li-Ning Guangxi.
Li-Ning Guangxi Shoes and Clothing Factory
According to disclosures, the project can only be carried out after Li-Ning Guangxi successfully obtains the land use rights of the land through bidding, auction and listing procedures.
The project will involve the construction of a supply chain base on the land to produce, package and develop high-end sports equipment, including but not limited to sports shoes, sports clothing and sports equipment. The land is located in an industrial land with an area of approximately 590 acres in the development zone. The investment agreement must be valid for 10 years from the date of signing.
The project is expected to increase the group’s annual production capacity of differentiated sports products as well as the research and development and technology accumulation of sports product functions, which will help the group The group continues to improve its production technology and cost management capabilities.
The new production line will help increase the production capacity and output of differentiated sports products to further expand market share. This move is also beneficial to the group’s business growth and will ultimately help the group maintain its leading position in the industry
Li Ning’s performance is outstanding
Operating data from Li Ning Company shows that in the third quarter as of September 30, 2019, Li Ning brand same-store sales recorded a high growth rate of 10%-20% year-on-year, and retail sales recorded a year-on-year growth of 30%-30%. With a low-end growth of 40%, franchised dealers’ orders in the second quarter of 2020 (excluding Li Ning YOUNG and China Li-Ning) recorded a low-end growth of 10%-20% year-on-year.
As of the third quarter of 2019, Li Ning (excluding Li Ning YOUNG) has a total of 6,564 sales outlets in China, a net increase of 142 from the second quarter and a net increase of 220 from the beginning of the year. Among the 220 net increases in sales outlets, there was a net decrease of 163 retail business outlets and a net increase of 383 wholesale business outlets. As of the third quarter, Li Ning YOUNG’s sales outlets in China totaled 926, a net increase of 54 from the second quarter and a net increase of 133 from the beginning of the year.
On May 22, Li Ning Group-Guangxi Supply Base, with an annual production capacity of 5 million pairs of sports shoes, was officially launched in the Guangxi-ASEAN Economic and Technological Development Zone.
Wang Xiaodong, member of the Standing Committee of the Autonomous Region Party Committee and Secretary of the Nanning Municipal Party Committee, Chen Gang, Vice Chairman of the Autonomous Region CPPCC, and Li Ning, Chairman of Li Ning Group, were present to congratulate.
“Guangxi is the forefront of exchanges and cooperation between China and ASEAN. We hope to combine sports industry resources and supply chain systems to create a world-class benchmark enterprise for the production of sports products and equipment here, and more It will radiate well into ASEAN and international markets.” Li Ning, chairman of Li Ning Group, said in Nanning on the 22nd.
On the same day, the supply base built by Li Ning Group in Guangxi, a leading sporting goods company, was officially opened. The base includes a project with an annual output of 5 million pairs of sports shoes built in the Guangxi-ASEAN Economic and Technological Development Zone. , as well as the Chengxin Material Factory project under construction in Laibin. In the future, it is also planned to build a project with an annual output of 10 million pieces of sportswear to form a R&D and manufacturing cluster platform covering the entire industry chain.
It is understood that the Li Ning Group-Guangxi Supply Base Project is an important part of the Nanning Li Ning Ecological Vitality Sports Industrial Park, which is positioned to include R&D and manufacturing clusters of raw materials, sports shoes, sports clothing, etc. supply base.
Li Ning Group hopes to combine its important practices, industry resources, and supply chain systems in the sports industry over the years with an international perspective, strengthen overall planning and forward-looking layout, and enhance domestic The standards and values of shoe and apparel factories actively cultivate the industrial ecology and form a sports industry chain with Chinese characteristics.
Build a green benchmark enterprise of first-class sports products and equipment in China and even the world, drive the transformation and upgrading of the manufacturing industry, and promote high-quality economic development with intelligent manufacturing.
Li Ning said in his speech that investing in his hometown is not only an inevitable need for the group’s development, but also a long-term wish.
Nanning City has good location advantages and superior business environment. The efficient and high-quality services of the Guangxi-ASEAN Economic and Technological Development Zone have enabled the construction of the Guangxi Li Ning factory to proceed smoothly and further strengthened the development of the enterprise. Confidence.
We hope to build the base into the CBD of Nanning’s sports industry, make important contributions to Nanning’s economic development and the improvement of people’s living standards, and contribute to the development of China’s sports industry and more regional sports markets. Provide important templates.
At present, the district has gathered more than 340 industrial enterprises, including 8 affiliated enterprises of the world’s top 500, involving food processing, textile and shoemaking, biomedicine, environmentally friendly home furnishing and other advantageous industries. .
Li Ning�Born in Guangxi, he has won 14 world championships and is known as the “Prince of Gymnastics”. He said in his speech at the event that this investment in his hometown is not only a necessary requirement for the development of the group, but also his long-term wish. The base will use high value-added production methods and practice the new “Made in China” concept to improve China’s domestic shoes and clothing. Dispensing factory standards and values.
Chen Gang, Vice Chairman of the Guangxi Political Consultative Conference and Chairman of the Federation of Trade Unions, expressed his appreciation for Li Ning’s investment in his hometown. He said that the opening of the base will drive the upstream and downstream development of Guangxi’s clothing and footwear industry chain, and will be instrumental in promoting the development of Guangxi’s clothing and footwear industry chain. High-quality industrial development plays an important role.
Competition in the sportswear industry will continue to intensify in the future. As consumers’ requirements for product quality increase and their sense of brand identity increases, domestic sportswear companies must increase investment in product research and development and strengthen technology. application. At the same time, brand building is carried out, but with the rising costs of labor and raw materials, small and medium-sized enterprises will be unable to survive. Well-known domestic brands such as Anta, Li Ning, and Xtep will compete fiercely in multiple fields. On the road to rapid progress, sports brands are also slowly showing their ambitions to expand the clothing segment.
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