Looking back to the past year, China's macroeconomy showed a trend of moderate recovery. Yet, the positive impacts brought by the improvement of residents' income still take time to manifest, hence there is still much growth potential in residents' consumption. The consumer sports goods market in China also faced certain challenges accordingly.


In 2023, we made steady progress and proactive planning, resulting in a steady revenue growth of 7.0% to RMB27,598 million (2022: RMB25,803 million). The overall gross profit increased by 6.9% to RMB13,352 million (2022: RMB12,485 million), with the gross profit margin remained the same as the previous year at 48.4%. Net profit attributable to equity holders was RMB3,187 million with net profit margin of 11.5%.

Despite the challenging operating environment, our cash generating capability remained strong. During the year, the Group maintained a healthy cash flow position with net operating cash inflow of RMB4,688 million (2022: RMB3,914 million). As of 31 December 2023, our cash and cash equivalents, restricted bank deposits and long-term and short-term bank deposits totalled RMB17,976 million, which fully demonstrated the sound risk prevention capability and high stress tolerance of the Group.

The Board has recommended the payment of final dividend of RMB18.54 cents per ordinary share for the year ended 31 December 2023, together with the interim dividend of RMB36.20 cents per ordinary share paid in September 2023, the total dividend for the year ended 31 December 2023 will amount to RMB54.74 cents per ordinary share or a total dividend payout ratio of 45%.


Continuing to pursue the core strategy of "Single Brand, Multi-categories, Diversified Channels", the Group has given play to its prominent competitive edges in the industry and its even stronger resilience in the evolving business environment. During the year, the Group continued to upgrade Li-Ning's experience value with a focus on professional sports in the five core categories, namely basketball, running, fitness, badminton and sports casual. Through its efforts dedicated to brand reputation and product innovation, the Group has developed a comprehensive layout of functional products and demonstrated the sports DNA of the brand.

With professionalism as the core of the brand's DNA, Li-Ning pursued improvement in the quality, functional features and fashionable style of products by continuously ramping up investment in research and development. During the year, we introduced the new COMFOAM soft bounce technology that renders significant improvement in comfortability of our footwear products. We also launched an innovative midsole structure featuring Li-Ning Carbon Core Drive System (李寧碳核芯助力系統), a system that integrates "Full BOOM" (全掌䨻) and "Impact Carbon Plate" (衝擊碳板) for enhanced sports performance. Meanwhile, China LI-NING, the fashionable product line under LI-NING brand, partnered with international artists and high-end fashion brands and launched various products with unique designs. Extra emphasis has been placed on skiing, skateboarding and other niche sports trends with an aim to attract young consumers with the brand's professionalism and product designs.

Focusing on the children's sports market, LI-NING YOUNG pursued the philosophy of integrating sportsmanship with Chinese culture, and is committed to becoming the leading professional sportswear brand for kids in China. In 2023, LI-NING YOUNG further implemented its mid-to-long term business plans and strategic goals with a focus on the sports-centric strategy. The Group devoted focused efforts in stepping up the development of professional sports product lines and continued to enhance channel efficiency, with a view to promoting business growth. The brand recorded a higher sell-through mix in high-end market, and a number of high yield flagship stores were successfully opened in major cities, which further consolidated its market position. Meanwhile, LI-NING YOUNG actively streamlined and optimized its product lines, particularly its professional products of core sports sectors, such as basketball, running and football. While pursuing functionality, LI-NING YOUNG continued to innovate its design and ingeniously blended Chinese cultural elements with modern aesthetics to launch professional and fashionable children's collections, in a bid to further strengthen its brand image and market competitiveness.

LI-NING 1990, an independent high-class fashionable sporty styled brand under the Group's "Single Brand" strategy, represented the epitome of LI-NING's high-end sports fashion line with thirty years of brand precipitation and professional technology. Over the past year, LI-NING 1990 accomplished remarkable results in product innovation, market diversification, customer development and brand upgrade. Currently, LI-NING 1990 has opened 36 stores in trendy business districts and high-end shopping centers in 23 key cities across China to highlight its positioning as a premium fashionable sporty styled brand. LI-NING 1990 strengthened its brand DNA and launched a new golf product line that integrated both professional sports attributes and unique fashion styles to reinforce the brand's presence in the high-end sports sector. We believed that by capitalizing on the trend of diversified demand and personalized consumption, coupled with close interaction with consumers and persistent innovation, the brand will usher the Group to a new peak in development.


In 2023, the Group was committed to expanding the core business districts and optimizing its store layout. Focusing on the core cities, core business districts and core commercial entities across the country, the Group preferred core locations and achieved an expansion of more than 1,660 big stores. By expanding the advantages and optimizing the structure of the high-tier markets, and making precise planning and key breakthroughs in the focused core commercial entities across the country, the Group recorded an increase in the occupancy rate of the core commercial entities to nearly 90% in 2023. Continuing to upgrade the visual image of stores with the successful launch of the new ninth generation store image, we have provided a better product experience, shopping experience and sports experience for consumers.

In respect of retail operation, through continuous exploration and optimization of the single-store operation model, the Group has upgraded the single-store operation model to the stage 2.0, forming a comprehensive optimized system from planning to execution, and from process to result. The systematic realization of the store sales planning business and the steady progress of the store manager-centred management mechanism have laid a solid foundation for enhancing single-store performance and product management capabilities. The Group's standardization tools, such as "LI-NING Retail Operation Manual", have enhanced the efficiency of the practical use of retail operation standards and improved the standards execution capability of stores through internal monitoring.

In addition, we are monitoring the demands of emerging markets, improving our channels and product matrix based on changes in market demand, and will gradually tap the new growth potential in lower tier markets and international markets.


Looking ahead to 2024, we will encounter new challenges and opportunities. Despite the uncertainties in the current international landscape, we believe that with the austerity control measures adopted by the government, China's economy will demonstrate a stable and positive growth trend, while the consumer market will also witness a prosperous recovery. We will seize opportunities arising from the market recovery and plan for high-quality development, efficient expansion and enhancement of brand competitiveness in the professional field. Meanwhile, we will also explore a new future of international business growth by establishing presence overseas with our base in China.

In the forthcoming year, we will continue to strengthen our retail operations, actively promote digital transformation, enhance service efficiency and optimize the shopping experience for our customers through the application of advanced technologies and innovative solutions. In addition, by further increasing our investment in R&D, we will keep abreast of the fashion trends and incorporate the spirit of innovation and vigour into our brands. We are committed to continuously launching high-performance and fashionable products to satisfy consumers' dual pursuit of quality and trendiness, ensuring that the Li-Ning brand is always at the forefront of the times.

As the founder of the Company, I am grateful for the support of our shareholders and all stakeholders. Looking ahead, we will continue to enhance our corporate governance, strengthen our sense of social responsibility and endeavour to actively contribute to society. We are committed to upholding the principles of integrity and sustainability to ensure that the Company makes positive economic, social and environmental contributions.

Last but not least, I would like to express my sincere gratitude and respect to all our dedicated employees, whose diligence and dedication have made Li-Ning what it is today. In the future, my management and I will join efforts with you to lead the Company in its constant pursuit of excellence, allowing "Anything is Possible".

Li Ning
Executive Chairman and Joint Chief Executive Officer
Hong Kong, 19 March 2024

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