Chinese sportswear brand Li Ning made a "small profit last year, ending three years of annual losses," according to Patti Waldmeir of the FINANCIAL TIMES. The company -- a household name on the Chinese high street -- reported net profit attributable to equity holders of $2.2M for '15, reversing from a loss of 781M yuan the previous year. Revenue grew 17% over the same period to nearly 7.1B yuan ($1.1B), Li Ning said, while its debt to equity ratio fell to 109.7 from 198.3 in '14. The results sent shares in Li Ning up more than 7% in Thursday morning trading in Hong Kong. The brand has "struggled to shake off the image of a producer of cheap sports shoes that are little more than western knock-offs." Li Ning said in a filing to the Hong Kong stock exchange that retail, wholesale and ecommerce outlets "all recorded double-digit revenue growth last year." The company "also credited its improved performance to the rapidly rising popularity of health pursuits, fitness and sports on the mainland." Li Ning said, "Supportive national policies (in China) stood the sportswear industry in good stead. Meanwhile, the initiative to lead an eco-friendly life has deeply implanted the idea of pursuing a healthy lifestyle in the hearts of people." Ben Cavender of China Market Research said, "I think Li Ning’s improved fortunes are mostly a product of finally getting their inventory under control and doing a better job of optimizing store count and location." Chen Ke, a Shanghai-based retail partner at Roland Berger, said, "The booming Chinese sports industry will surely prompt demand for more sportswear. Li Ning will benefit from the growth in the industry but in the future it will face intensified competition" (FT, 3/17).
