TPG Capital LP Has Been Fully Sold To Li Ning Co.

According to the world clothing and shoe net, Reuters's IFR said the private Holdings Company TPG Capital LP has sold its full stake in Li Ning Co Ltd (2331.HK) and withdrew its capital after the final cash of about HK $885 million.

It is learned that before the paction is held.

(2331.HK) the TPG Capital LP LP of 7.8% shares has sold all the remaining 168 million 600 thousand shares, and the trading price of HK $5.25 per share is 1.9% lower than that of Lining (2331.HK) closing price of HK $5.35.

The private-equity fund had been undersigned in mid January, when it sold 114 million shares at HK $4.73-4.80 per share and cashed HK $5.39-5.47. The median paction price was 3.6% higher than the closing price of the previous day.

TPG Capital LP in January 2012 Lining's performance and share price fell to a low point, subscribed to the group's 561 million yuan of convertible bonds, which accounted for 12.1% of the shares after changing into shares, and GIC Private Ltd., Government Investment Company Singapore also increased its stake in Lining to 8%.

At that time, Lining was in urgent need of life-saving funds to deepen the strategic reform and business restructuring announced in 2011, but it did not return to profitability until 2015, and its performance improved further last year.

Data show that in 2016, the group's adjusted net profit surged 22 times to 330 million yuan over the same period last year, and its revenue also increased by 11.6% to 8 billion 715 million 500 thousand yuan, and Lining's brand income rose 13.7% to 7 billion 925 million 400 thousand yuan.

Gross margin increased 120 basis points to 46.2%, and operating margins increased by 260 basis points to 4.8%.

This year, the group plans to open 300-500 stores. Last year the new store has 300 stores. By the end of the year, there will be about 6500 stores. The group will also focus on improving the efficiency of the store.

The growth rate of the channel is expected to slow down to 35%-40% due to fierce competition in the industry, but the expected revenue will rise to 20%-25% in the next one or two years.

Analysts believe that the sale of all holdings by TPG Capital LP, which has eliminated market worries this time, has improved significantly in the two quarter of 4 and May compared with the first quarter. Many big companies have given Lining (2331.HK) the highest rating. The stock closed at HK $5.84 today and soared 9.16% throughout the day.

Deutsche Bank AG Deutsche Bank, Citigroup Inc. Citigroup and Credit Suisse Group AG, Credit Suisse, have pointed out that the group has achieved about 5% of same store sales growth in the past two months. The median declines in the first quarter are now recovering, and e-commerce has more than 50% growth.

Credit Suisse estimates that in the first half of fiscal year, Lining's revenue growth can reach double digits, and the discount will be reduced.

Portfolio improvement and leverage will boost short-term profits in the next two years.

Credit Suisse raised the target price of Lining (2331.HK) from HK $6 to HK $6.5, reiterated the "win win" rating.

Deutsche Bank and Citigroup both maintain the "buy" rating and the target price of HK $5.5 and HK $6.86 respectively.

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