• H1 loss of CNY242,000 versus CNY562.6m
  • Revenue up 16.1% to CNY3.64bn
  • Company aims for profit by year-end
Li Ning says it aims to return to profit by the year-end

Li Ning says it aims to return to profit by the year-end

Chinese sporting goods business Li Ning has said it aims to return to profit by the end of 2015, after revenue growth helped to narrow its first-half loss.

The company's loss amounted to CNY242,000 (US$37,820) for the six months to 30 June, compared to a loss of CNY562.6m in the same period last year.

Revenue increased 16.1% to CNY3.64bn from CNY3.14bn a year ago, helped by strong performances in each of its five core sports categories. The company's namesake brand saw revenue grow 17% to CNY3.13bn from CNY2.67bn.

Li Ning said it made "good progress" with its 'closed loop' cycle and continued to improve operations. Broken down into product segments, Li Ning brand sales of footwear increased 21.4%, apparel was up 12.5%, while equipment/accessories rose 13.9%.

The group's Double Happiness brand saw revenue grow 10.4%, while its other brands, including Lotto, Kason, Aigle and Z-DO, were up 13.5%.

Gross margin improved slightly to 44.9% from 44.6% last year.

"Steady revenue growth and operational efficiency improved in the first half of 2015 helping to reduce losses significantly, and lay the foundations for achieving full year profitability," said group executive chairman and interim CEO Li Ning.

Li Ning said it will expand its sales network mainly in the southern region in the second half of the year, while maintaining a reasonable inventory level.

It will introduce new sports life products under a blue and white coloured namesake label, targeting the mass market. The group will also expand its network of independent mass market sports life stores, and launch price competitive products to attract young and trend conscious consumers.