Li Ning's business mind seems to be no less than his sporting talent. Yesterday, Li Ning Co., Ltd. (2331.HK, hereinafter referred to as “Li Ning Company”) announced that it transferred 80% of the shares of subsidiary Beijing Trends Sports Development Co., Ltd. (hereinafter referred to as “Beijing Dongxiang Company”) to Shanghai Titan Company at a consideration of 4481.4. Ten thousand yuan.

At the same time, Li Ning also revealed that it has reached an agreement with the world-famous Philippine Philippine IGLE InternationalS.A to release an agreement, the two sides hold 50% stake in the formation of joint ventures, with a total investment of about 46.95 million yuan. The joint venture owns the franchise of manufacturing, marketing and selling AIGLE brand outdoor leisure activities and extreme sports apparel and footwear products in China for a period of 50 years. People in the industry believe that this "one out of one move" is quite new to Li Ning. Its new brand of investment in the sale of KAPPA franchise rights not only saves time and effort, but also grabs the field of “outdoor sports” concept items that are currently hot in China.

Previously, Li Ning's main business has two major brands, one is the "Li Ning card" that was created by itself and the other is the "KAPPA" brand (exclusively operating in mainland China and Macau). The KAPPA brand is currently owned by the BasicNet Group. “The KAPPA concession agreement is a short-term arrangement between the company and the BasicNet Group, and it will expire in one and a half years. From the long-term benefits, the cooperation between the two parties does not enable Li Ning to share the added value of KAPPA brand investment. Li Ning company related sources disclosed to reporters.

The reporter learned from the investigation that in 2004, Li Ning’s turnover reached 1.878 billion yuan, and its net profit margin was 7.1%. KAPPA's operating income was 106 million yuan, accounting for 5.6% of total turnover. In 2003, this ratio was only 3.1%. In comparison, in the equity transfer, Li Ning Company, which sells 80% of Beijing Dongxiang Company’s shares, can obtain 8.614 million yuan, and Shanghai Li Ning Company obtained another 36.2 million yuan after transferring the debt owed by Beijing Moving Company to Shanghai Titan Company. The company can cash out a total of 44.814 million yuan. The industry believes that this is a very good deal.

At the same time, AIGLE, an equity-based outdoor sports brand, is an adjustment made by Li Ning to re-establish its corporate strategy and implement a multi-brand strategy. A person from the investment community analyzed that Li Ning's cooperation with AIGLE International S.A. forms a capital bond that will more effectively increase its market competitiveness and company value. The 50-year franchise of the AIGLE brand is more attractive than the expiring KAPPA franchise. Over time, the intangible value of the international brand will be owned by Li Ning.

Beijing Dongxiang Company is funded and established by Shanghai Li-Ning Sports Goods Co., Ltd. and Beijing Jiali Wind Sports Development Co., Ltd. It is mainly engaged in the development, manufacture, sale and operation of products related to the well-known Italian sports brand KAPPA. Its exclusive operating rights expire at the end of 2007.