Li Ning Company (2331) H1 2025 earnings summary

Executive summary

• Revenue grew 3.3% year-over-year to RMB14.817 billion for the six months ended 30 June 2025, with net profit at RMB1.737 billion and a net margin of 11.7%, despite a challenging macro environment and higher effective tax rate.

• Gross profit margin decreased by 0.4 percentage points to 50.0%, reflecting deeper discounts, channel mix shifts, and increased promotional activity.

• EBITDA rose 2.0% year-over-year to RMB3.51 billion, with an EBITDA margin of 23.7%.

• Interim dividend of RMB33.59 cents per share declared, with a 50% payout ratio.

• Maintained strong cash reserves and focused on core product categories, brand development, and prudent expense control.

Financial highlights

• Operating profit increased 1.5% year-over-year to RMB2.44 billion; operating profit margin was 16.5%.

• Net operating cash inflow was RMB2.411 billion; cash and equivalents rose to RMB11.8 billion.

• Basic EPS was 67.4 RMB cents, down 11% year-over-year.

• Inventory turnover was 61 days, improving by 1 day year-over-year; cash conversion cycle steady at 31 days.

• Net cash position improved to RMB19.191 billion, up 5.7% from year-end 2024.

Outlook and guidance

• Focus on product innovation, channel optimisation, digital transformation, and long-term growth.

• Plans to accelerate R&D, expand in women’s, outdoor, and youth sports, and deepen Olympic marketing.

• Cautious outlook for the second half due to higher expected expenses, including Olympic sponsorships.

• Continued focus on prudent management, channel efficiency, and sustainable long-term growth.