Li Ning's defensive stance: ushered in the US private equity fund TPG investment

Li Ning's defensive stance: ushered in the US private equity fund TPG investment

The rest of the Spring Festival has not yet been exhausted. Li Ning, a well-known sports brand, has finally ushered in a good news for the market. Recently, Li Ning announced that it has recently introduced TPG, a US private equity fund with extensive experience in the retail industry, as its strategic investor. After this news came out, Li Ning's stock rose 21% in the next two trading days.
The rest of the Spring Festival has not yet been exhausted. Li Ning, a well-known sports brand, has finally ushered in a good news for the market. Recently, Li Ning announced that it has recently introduced TPG, a US private equity fund with extensive experience in the retail industry, as its strategic investor. After this news came out, Li Ning's stock rose 21% in the next two trading days.

Judging from the response made by the capital market, the news that Li Ning won strategic investment can be said to have played a role in quick success. The first dose was Li Ning's promise. In China, TPG has 17 years of investment experience and has strong resources in the consumer goods and retail industries. One of the most worth mentioning is that in 2009, TPG assisted Daphne, a Taiwan-funded footwear company, in the successful transition. Therefore, people generally hope that Daphne's successful reorganization and transformation of the legend will be repeated in Li Ning.

Introducing private equity funds in the form of equity transactions, Li Ning can also obtain about 750 million yuan in investment, which is the second dose of life-saving medicine for Li Ning. For Chinese local sports brands, 2012 is the year of a four-year reincarnation of the Olympic Games. Sportswear giants have started to plan series of marketing strategies as early as last year. However, looking back at the news that Li Ning has proposed since the transition adjustment strategy, most of them are negative information that is detrimental to the company's operations. When rivals are at a standstill, if Li Ning does not change again, it is even more difficult to reverse the situation.

It can be said that this time TPG became a strategic investor of Li Ning, and it was entirely an act of boosting the confidence of both external and practical significance. Li Ning chose to announce this news to the outside world in early 2012 because 2012 is a difficult level for domestic sports brands: In 2011, there was a phenomenon of “large stocks” in domestic sports brands collectively. In the year, the pressure of shipping and new orders will appear on major brands.

When major brands buy inventory at a low price, the competition for local sports brands will become fiercer, and brands that are less famous will be more difficult. In addition, in recent years, brand owners have been frenzied to open stores to push up rents and operating costs of retail stores. Even if it is a listed company with financing channels that can ease the pressure on the capital chain, the days are not necessarily better.

In China, the environment of sportswear shoes market has created a series of brands such as Anta, Peak, 361° and Xtep. TPG has brought confidence and money to Li Ning. Whether this move can change the fate of its decline, I am afraid that the answer will come to an end at the end of the year. Therefore, Li Ning must face a higher profile than its rivals this year when it comes to the Olympic year. Of course, unlike 4 years ago, this time it should be called defensive posture.

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