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Li Ning, the well-known sports apparel brand, has recently expanded its business into real estate through a newly established subsidiary. However, recent statements from officials in Shenyang’s Heping District suggest that the company may be facing challenges in this new venture.
On September 14, local government representatives in Heping District stated, “We are not aware of any plans for the reconstruction of old districts.†This response came in reaction to reports that a company linked to Li Ning, which is associated with a 4 billion yuan investment, might be involved in urban redevelopment projects. The statement raised questions about the feasibility of Li Ning's real estate ambitions.
Li Ning's entry into real estate began with complex share investments. In June, the company acquired a large stake in JE Energy through a joint venture with his brother. Later, JE Energy purchased shares in Li Ning Co., Ltd., leading to a conversion of some preferred shares into ordinary ones. As a result, the Li Ning brothers became the controlling shareholders of Yeah Energy.
Following this, energy-saving company announced that Li Ning would enter the real estate sector. They signed an agreement with a Shenyang-based seller, acquiring 99% of Shenyang Zhaohao Industrial Park and 100% of Shenyang Zhaohao Property Investment. A major project named “Eco-city†was also introduced, aiming to develop a 1 million square meter urban reconstruction project in Heping District, with an estimated investment of 4 billion yuan over 5 to 8 years.
However, local authorities remain skeptical. Officials from the Heping District government and the Urban Construction Bureau have denied any knowledge of large-scale urban reconstruction projects. A spokesperson from the Heping District Information Center confirmed that no final site has been decided yet, and such decisions are expected to take at least two more years.
The announcement also indicated that the project is still in the planning stage. While the government will assist in land acquisition, it must go through an auction process. The seller has promised that the land will be sold through public auctions or listings.
Industry analysts note that entering real estate requires both capital and land. For Li Ning, raising 4 billion yuan is a significant challenge. According to recent financial reports, the company holds 14.36 billion yuan in cash, but this amount seems insufficient for such a massive project. Additionally, the company needs funds to sustain its core business operations.
In response, Li Ning stated that the capital required for new ventures is substantial, and they are exploring various financing methods. However, specific strategies are still under consideration.
This is not the first time a clothing brand has ventured into real estate. Companies like Youngor have been active in the real estate market since the early 1990s, while companies like TCL, Midea, and Gree have also expanded into real estate for years.
While real estate can offer high profit margins—often between 30% and 40%—it is unclear whether this applies to apparel companies. Li Ning’s gross profit margin stands at around 47.9%, significantly higher than that of real estate companies. However, the competitive landscape in the apparel industry is intense, with growing pressure from domestic and international rivals.
In a press conference, Li Ning mentioned that the sports industry extends beyond just sportswear, involving real estate and emerging technologies. Facing competition, the company may be pursuing expansion as a strategic move.
August 29, 2025