In 2022, the increasingly complex and severe international environment and the recurring pandemic imposed multiple challenges to the macroeconomy. Throughout the year, despite domestic and external pressures, the national economy maintained a recovery momentum and operated within a reasonable range as a whole. Affected by the recurrent and widespread pandemic outbreak, the operation of domestic consumption market last year proved volatile as the consumption market was again dampened due to the resurgence of the pandemic in the fourth quarter while showing a gradual recovery trend in the first three quarters. Nonetheless, the growth of the online consumption sector in the consumption market maintained at a healthy level with the consumption of certain upgraded product categories outperformed the overall market, demonstrating a resilient growth of the consumption market. Driven by the implementation of various economic stabilization policies and measures as well as the continuous optimization of pandemic prevention and control measures in China, the market vitality was stimulated and the consumption demand of residents is expected to be further unleashed. During the year, continuing to pursue the core strategy of "Single Brand, Multi-categories, Diversified Channels", the Group optimized the technological research and development of products, enhanced the operating efficiency of retail channels and improved the stability and flexibility of the supply chain while consolidating the brand and product competitiveness and maximizing LI-NING's experience value.

According to the National Bureau of Statistics, China's GDP in 2022 registered a year-on-year growth of 3.0% and the effective growth rate of residents' per capita disposable income in China reached 2.9%. Driven by the continuously improving household living standard, consumption structure was further optimized. In 2022, the Beijing Winter Olympics was successfully held. Chinese athletes achieved breakthroughs and remarkable results during the Winter Olympics, further encouraging the general public to participate in sports games. The Outline for the Strategic Plan for Expanding Domestic Demand (2022-2035) promulgated by the government during the year, which clearly proposed to promote public consumption of sports products, was expected to bring new opportunities for the growth of the sports industry. With the gradual relaxation of the pandemic control measures in China since the end of the year, we believe that it will further support the robust growth of China's sports product consumption market.

Looking back to 2022, despite the challenging operating environment resulting from the impacts of various factors such as the recurring COVID-19 pandemic, rising raw material costs and weak consumption sentiment, the Group's revenue and profit remained healthy. In particular, the Group's revenue increased from RMB22,572 million in 2021 to RMB25,803 million. During the year, the Group continued to focus on LI-NING's experience value and implemented precise marketing strategies to satisfy the individual needs of consumers, at the same time enhancing interaction with customers in innovative ways, thereby providing diversified and comprehensive services. Leveraging LI-NING brand's innate sports DNA, we have always been putting emphasis on the professional and functional features of products. Meanwhile, we were also committed to integrating professional and functional features of sports products with elements of popular fashion and cultural creativity, striving to accurately capture market and fashion trends as well as consumers' preferences in a bid to attract more young consumers and convey our brand value to consumers effectively.


In 2022, the Group’s revenue increased by 14.3% to RMB25,803 million, and the net profit margin was 15.7%. Achieving net operating cash inflow of RMB3,914 million, working capital was at a healthy level and cash conversion cycle was 30 days, which increased by 10 days year on year.

In order to satisfy consumers' increasingly diversified demand for sports consumption, we improved LI-NING's experience value comprehensively by enhancing professional performance of our products, improving channel and retail operation efficiency and strengthening supply chain capabilities. We improved product performance by devoting greater efforts in product research and development on an ongoing basis, and kept abreast of the popular fashion and cultural creativity trends, with a view to providing stylish and artistic sports products with professional functions to consumers. At the same time, we continued to optimize the channel structure and pushed forward the transformation of retail operation models while actively exploring development potential of new retail model, hence further increasing channel efficiency. We strengthened the supply chain management system and ensured that it was centered on business needs so as to enhance the responsiveness and flexibility of the supply chain.


During the year, we continued to implement the strategy of "Single Brand, Multi-categories, Diversified Channels" and enhanced the professional and functional features of our products. Leveraging our unremitting efforts on product research and development, and in pursuit of technological breakthroughs for improvement of product performance, we promoted product upgrade, introduced new products continuously and optimized user experience of our products, thus strengthening the core competitiveness of both our products and brand.

During the year, we launched the brand-new "BOOM FIBER" (䨻絲) technology for shoe uppers by applying "LI-NING BOOM" (李寧䨻) materials on shoe uppers in an innovative manner, marking an important milestone of the expansion and upgrade of "LI-NING BOOM" (李寧䨻) technology platform and a breakthrough of technological research and development of our products. Meanwhile, in addition to refinement of products' professional function for excellence, we strived to improve the fashionable design of products under LI-NING brand. "LI-NING 1990", a high-class fashionable sporty styled sub-brand, continued to explore high-end market by launching distinctive and fashionable products through successive crossover cooperation with luxury fashion brands, PIERRE HARDY and Moose Knuckles, with an aim to enhance LI-NING brand value and further develop the youth market.

The successful Beijing Winter Olympics further enhanced the public awareness and interest in winter sports. Keeping abreast of sports consumption trend, we launched the "LI-NING SNOWBOARDING" series for snowboarding products such as ski suit and pants during the year. Such products were developed and produced based on the scenario of extreme sports with a design emphasizing professional features and Chinese characteristics, and tested by athletes in various top events. We also collaborated with national and foreign top-notch snowboarders, including Canadian snowboarder Max Parrot and Chinese snowboarder Zhang Jiahao (張嘉豪), to further expand the market segment of winter sports.


In 2022, we continued to push forward the transformation of retail operation models to support channel upgrade and optimization, and reinforced product management and retail sales capabilities to enhance channel efficiency. We also continued to develop an efficient and replicable business model for single store to boost retail-end performance centering on key retail data. In addition, we created an assortment and operation management system that embodies the sporty and trendy image of LI-NING brand while enhancing the organization and cultural development of retail talent team.

In recent years, upholding the strategy of "expanding high-quality profitable stores" for channel development, LI-NING accelerated the addition of quality stores and opened landmark flagship stores in core cities to strengthen the channel layout planning at core business districts. Meanwhile, we closed loss-making and low-efficiency stores to optimize structure of channels and improve channel efficiency. In connection with the operating strategy of big stores with high efficiency, we continued to upgrade the store image by enriching the visual effects within stores to improve consumers' experience as well as strengthen recognition of and loyalty to our brand.

We have established flagship stores in various key cities across China and delivered LI-NING's experience value based on "sports experience", "product experience" and "purchase experience", to consumers by offering an access to all-new retail experiences. At the end of 2022, we launched our first flagship store in Hong Kong, namely the LI-NING flagship store on Canton Road, Hong Kong. It is envisaged to be positioned as the front-edge store of our brand in the Hong Kong market with huge consumption potential, thereby allowing consumers to fully experience the professional sports products and services of LI-NING and appreciate the brand spirit and culture of "Anything is Possible".

Meanwhile, we are committed to exploring new store models, with a view to further tapping the consumption potential in market segments. In order to render more diversified and innovative experiences for sports enthusiasts, we launched a brand-new type of stores under the LI-NING brand, i.e. the LI-NING basketball main court store, in 5 cities such as Chengdu, Kunming, Xian, Beijing and Shenyang. These stores enabled consumers to get access to the latest and most complete collection of basketball products under the LI-NING brand and offered them unique and personalized services.

In respect of the supply chain, we placed business development needs as our top priority and improved our supply chain management system, aiming to develop our own supply chain system with cost-effectiveness and reliability. We also actively pushed forward the transformation of the supply chain system from a passive production mode to a proactive production mode with more flexibility, hence enhancing the flexibility and fast response capability of the supply chain system. During the year, the Company established a more secure, reliable and synergistic regional supply system with flexible deployment and abundant production capacity, which has enhanced its resilience against supply risks. Meanwhile, the Company continued to strengthen the control over product quality so as to provide consumers with high-quality products and improve users' experience and satisfaction.


Stepping into 2023, the consumer market foresees a gradual recovery, which is underpinned by further optimization of pandemic containment policies. As such, we are cautiously optimistic about the macroeconomic outlook. We will eagerly seize the market opportunities arising from the post-pandemic recovery with accelerated pursuit of quality growth, efficient expansion and stronger brand competitiveness in the professional field. Looking forward, the Group will strive to improve the following core business focuses, place emphasis on enhancing LI-NING's experience value and strengthen retail operation capability with a view to laying a solid foundation for profit growth and sustainable development in the future, at the same time achieving real sports value:

We will continuously adopt the strategy of "Single Brand, Multi-categories, Diversified Channels" and maintain sustainable development of businesses with a focus on operation efficiency improvement, so as to enhance product and brand competitiveness, steadily improve profitability and further expand business scale;

Pursuing improvement in product functions, we will strive for innovation breakthroughs in product technologies with enhanced research and development capabilities. We will also keep abreast of fashion trends and market development to accurately identify the changes in consumer demand and further optimize their product experience. Furthermore, we will develop diversified marketing approaches and propel the implementation of digitalized marketing strategies in an effort to expand our brand influence;

We will optimize our diversified channel layout and expand the profitable stores with high quality. Besides, we will reinforce the online and offline integrated operation model to push forward omni-channel development with enhanced online and offline synergy, at the same time capturing the actual demand of consumers through application of big data analysis and information technology. In the meantime, our efforts in the development of supply chain management system and our own supply chain will continue to be scaled up;

In respect of new business, enhancing single store profitability and store efficiency will remain as our core development goals. We will make reasonable use of resources to explore market potential and create new business opportunities in order to foster new opportunities for the Company's profit growth in the long run.

LI-NING is a brand originated from China with athletes' DNA. While always upholding its Chinese characteristics, we aim to establish the LI-NING brand as Chinese consumers' first-choice sports brand and a world-class professional sports brand with fashion attributes. It was with this vision that we determined the brand strategy of "Single Brand, Multi-categories, Diversified Channels", which also supported our efforts in building the unique competitiveness of the LI-NING brand, making us one of the top players in the market.

Looking ahead, we will continue to enhance our retail operation capability and further promote the upgrade of our digitalized system. In tandem with our constant focus on the investment for research and development, we will further keep abreast of the fashion trends in a bid to further incorporate the brand with creativity and vitality. As the founder and operator of the Company, I always place much emphasis on the long-term interests of all shareholders and stakeholders, whose loyalty to the LI-NING brand is extremely significant, and be deeply grateful for their long-standing support to the Company. With continuous efforts in promoting corporate governance and corporate social responsibility, we are devoted to making contributions to the society. In the meantime, I would like to express my sincere gratitude to our dedicated and hardworking staff. The management and I will spare no efforts in steering the Company forward towards further development in the future, all the while unleashing the potential of LI-NING brand with athletes' DNA and bringing the spirit of "Anything is Possible" into real practice.

Li Ning
Executive Chairman and Joint Chief Executive Officer
Hong Kong, 16 March 2023

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