China Li Ning shares fall most in 2 years on order drop

Li Ning Co. plunged the most in more than two years in Hong Kong trading after the Chinese sportswear maker set up by a former Olympic gymnast of the same name said orders declined.

Li Ning fell 10 percent to HK$19.12 as of 10:39 a.m. on the city s stock exchange, headed for the largest drop since November 2008. The stock has lost 35 percent this year, compared with a 3.4 percent gain for the benchmark Hang Seng Index.

Orders for the second quarter of 2011 have fallen, and operating costs are rising, the Beijing-based company said, citing the results of its trade fair. Order volumes of apparel declined by more than 7 percent from a year earlier, and that for footwear fell 8 percent, according to the statement issued Dec. 17 after the market s close.

Forecasts for growth in the coming year had become more conservative for Li Ning s distributors, Chief Executive Officer Zhang Zhiyong said in the statement. The retail environment for the sporting goods industry this year is faced with heavy pressure, Zhang said.