DEAR SHAREHOLDERS,
Looking back over the past year, China's economy demonstrated resilience and stability with a clear upwards recovery trend despite an uncertain and complex international environment. A series of incremental policies were announced and effectively strengthened consumer confidence. Against this backdrop, the Group focused on its core business, strengthened technological research and innovation, improved operational efficiency, and consistently enhanced the consumer experience to ensure a stable financial performance.
STRENGTHENING THE FOUNDATION TO DRIVE STEADY GROWTH IN A COMPETITIVE ENVIRONMENT
In 2024, we made progress and drove growth, with revenue increasing 3.9% to RMB28,676 million (2023: RMB27,598 million). Overall gross profit increased by 6.0% to RMB14,156 million (2023: RMB13,352 million), with a gross profit margin of 49.4%, improving by 1 percentage point compared to the previous year. Profit attributable to equity holders was RMB3,013 million, with a net profit margin of 10.5%.
During the year, the Group maintained a healthy financial position, generating net operating cash inflow of RMB5,268 million (2023: RMB4,688 million), underscoring our strong risk management capabilities.
The Board has recommended the payment of a final dividend of RMB20.73 cents per ordinary share for the year ended 31 December 2024. Together with the interim dividend of RMB37.75 cents per ordinary share paid in September 2024, the total dividend for the year ended 31 December 2024 will amount to RMB58.48 cents per ordinary share or a total dividend payout ratio of 50%.
STAYING TRUE TO OUR ORIGINAL ASPIRATION BY CONTINUOUSLY REFINING "LI-NING'S EXPERIENCE VALUE"
2024 marked the 20th anniversary of LI-NING's listing on the Hong Kong Stock Exchange, the first mainland Chinese sports goods company to be listed there. Over the past two decades, we have remained committed to our original aspiration: delivering "LI-NING's Experience Value" through excellent sports experiences for professional athletes and consumers alike. During the year, we continued to implement our core strategy of "Single Brand, Multi-categories, Diversified Channels" with a focus on six core categories: running, basketball, fitness, badminton, table tennis and sports casual. By consistently investing in product and technological innovation, we strengthened our leading position in the industry.
2024 was a great year for sports. We launched the "In My Name"（以我為名）Olympic-themed marketing campaign which showcased our brand spirit and technological capabilities. This was complemented by the launch of themed product series and thematic retail environments, generating massive buzz and engagement which solidified our professional brand image. At the Paris Olympic Games, LI-NING sponsored and supported the national table tennis, diving, and shooting teams who achieved remarkable results. These teams accounted for nearly half of the gold medals won by the Chinese Olympic delegation, further enhancing the competitiveness and value of the LI-NING brand.
As we usher in the new year, we are excited to announce that after many years, the LI-NING brand will once again become the official sportswear partner for the Chinese Olympic Committee and the Chinese sports delegation. From 2025 to 2028, we will support the Chinese sports delegation as they compete in several leading international competitions. This partnership is not only a vote of confidence from the General Administration of Sport of China and the Chinese Olympic Committee, but also a reflection of our commitment to serving and supporting Chinese sports. We will continue to uphold our "Serve with Sportsmanship" values, promoting sportsmanship and the Olympic spirit while supporting the development of Chinese sports. Additionally, we will encourage more people to participate in sports, experience the joy of sports, and share the glory of China's Olympic dreams through our sports products and experiences.
Over the past few years, we have consistently driven technological innovation by building a technical platform focused exclusively on R&D and sports science. In May 2024, we successfully hosted the "In My Name, Tech LI-NING"（以我為名，科技李寧） technology conference where we showcased six innovative technologies: "Carbon Core"（碳核芯）, "Dual-Stage Assist Curves"（最速曲線系統）, "Super Jiang"（超級弜）, "GCU", "Super BOOM"（超䨻）and "Extreme Boom Fiber"（極限䨻絲）. We also unveiled for the first time three new innovations: the "Shadow 3"（絕影3）running shoes, the premium "Dragonflight"（龍雀）racing shoes, and dual-vent nanotechnology for rainstorm protection. The "LI-NING Technology Platform", represented by LI-NING's "BOOM"（䨻）technology, supports our brand in driving remarkable innovation in professional sports products for core sports categories. This enables us to make significant progress towards becoming a world-class professional sports brand.
FORGING AHEAD, WE BELIEVE THAT "ANYTHING IS POSSIBLE"
Looking ahead to 2025, despite an uncertain and complex international economic environment and an increasingly competitive sport goods market, we believe that China's economy will remain strong and resilient. The Chinese sports goods industry still offers significant development potential. We will leverage our deep market insights and capitalize on opportunities from our collaboration with the Chinese Olympic Committee and Chinese sports delegation to drive value creation through sports marketing. This will further enhance the functional attributes of our products and improve our brand competitiveness and influence. We will continue to focus on the Chinese market, but will also look overseas and gradually expand our presence internationally.
Specifically, we will further enhance the execution of our "Single Brand, Multi-categories, Diversified Channels" strategy and continue to delve deeply into core categories. By continuously refining our product offerings in various categories, we will create additional professional sports experiences for consumers. Exploring the unique athletic DNA of our brand and deep understanding of sports, we will continue investing in sports science research and professional product research and development to strengthen and enhance our technological innovation and application capabilities. Additionally, we will maintain our business layout and investment in emerging sports categories to address evolving sports needs, creating richer and more diverse product experiences. We will also focus on the needs of new sports consumer groups, particularly for younger generations.
As the founder of LI-NING, I have always placed the long-term interests of all shareholders at the core of everything we do. I recognize that the profound affection and steadfast support everyone has for our brand is crucial to our future development and I am immensely grateful for this. We will continue to strengthen corporate governance, actively fulfil our corporate social responsibilities, offer employees a supportive working environment and a platform to showcase their talents, and strive to create greater value in appreciation for the long-term support of our shareholders.
Last but not least, I would like to extend my sincerest gratitude to each hardworking employee. You are the foundation that ensures the steady progress of the LI-NING brand. Going forward, our management team and I will continue to work hand in hand with you, leading the Group in the pursuit of excellence, and contributing more to the development of Chinese sports. Believe that "Anything is Possible"!
Li Ning
Executive Chairman and Joint Chief Executive Officer
Hong Kong, 27 March 2025
