Li Ning Company reported its first annual operating and net loss since it went on the stock exchange in 2004, due especially to the competition and to restructuring costs. The company’s total revenues fell by 24.5 percent to 6,739 million yuan renmimbi (€839.4m) in 2012, with a particularly strong reduction in the sell-in during the second half intended to support its retail clients. The gross margin declined by 7.5 percentage points to 37.8 percent after a major writedown in inventories. Operating results before amortization (Ebitda) showed a loss of RMB1,377 million (€171.5m). Combined with numerous charges related to its ‘Transformation Plan,’ this led to a net loss of RMB1,979 million (€246.5m) for the Chinese sports company, compared with a profit of RMB385.5 million in 2011. More on this and the results of other Chinese companies (Belle International, Peak Sports, etc.) in the next issue of SGI Europe.