Li Ning Company (2331) H2 2025 earnings summary

Executive summary

• Revenue increased by 3.2% year-over-year to RMB 29.598 billion, with net profit at RMB 2.936 billion and a net profit margin of 9.9%.

• Gross margin was 49.0%, down 0.4 percentage points year-over-year, reflecting deeper discounts and weak demand.

• Operating profit margin improved to 13.2%, up 0.4 percentage point year-over-year.

• Cash flow from operating activities remained robust at RMB 4.852 billion, and net cash increased to RMB 19.974 billion.

• Dividend payout ratio maintained at 50%, with total annual dividend of HKD 0.5695 per share.

Financial highlights

• Gross profit increased 2.4% to RMB 14,489 million; EBITDA was RMB 6,161 million, down 3.4% year-over-year.

• Cash and cash equivalents surged to RMB 16,717 million; current ratio improved to 2.85.

• Average working capital as a percentage of revenue was 7.7%; cash conversion cycle was 37 days.

• Advertising and marketing expenses rose, with the expense ratio up to 10.7%, mainly due to Olympic sponsorship.

• Net profit attributable to equity holders was RMB 2,936 million, down 2.6% from the prior year.

Outlook and guidance

• Anticipates high single-digit revenue growth for 2026, with net profit margin expected in the high single-digit range.

• Plans to increase investment in brand building, Olympic marketing, and technology-driven product upgrades.

• Focus remains on core product categories, innovation, and expanding into new growth areas.

• Emphasis on improving operational quality, optimizing channel layout, and accelerating inventory turnover.

• Strengthening talent, finance, and digital intelligence as core support capabilities.