August 2008

Annual Results Announcement

08Interim Results Announcement

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Agenda

Financial Highlights

Business Review

Strategies and Plans

Open Forum

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Financial Highlights

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Financial Highlights

(RMB '000) 2008 2007 Change (%)

Turnover 2,107,078 1,552,907 +35.7

Gross profit 514,862 385,049 +33.7

Profit attributable to equity holders 263,646 265,937 -0.9

Basic EPS (RMB cents) 21cents 21 cents -

Six months ended 30 June

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265.9 263.6

2007 20086 months ended 30 June

RMB Mn

Sustainable Turnover Growth

Profit Attributable to Equity HoldersProfit Attributable to Equity Holders

1,552.9

2,107.1

2007 20086 months ended 30 June

RMB Mn

TurnoverTurnover

+35.7%

+35.7%

Stable growth in sales was attributable to:– Continuous and rapid increase in sales of sports wear– Globalized expansion in sales market with Mainland China playing a promi

nent role

Profit attributable to equity holders remained stable

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6 months ended 30 June

Gross Profit MarginGross Profit Margin

Stability of Gross Profit

24.8%24.4%

2007 2008

Gross profit margin slightly decreased by 0.4 pct, due to– Continuous rapid appreciation of RMB– Reduction of export tariffs refund rate– Surge in the price of resources– Margin pressure was offset by improved internal efficiency and successful

adjustment of product mixNet profit margin decreased from 17.1% to 12.5% due to the increasing income tax expense and loss in transactions of derivatives instruments during the period

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Turnover Breakdown by Products

6 months ended 30 June

2008 2007 Change

RMB'000 % RMB'000 % RMB'000 %

By products

Casual wear 954,282 45.3% 1,082,993 69.7% (128,711) (11.9%)

Sports wear 952,731 45.2% 356,192 23.0% 596,539 167.5%

Lingerie 121,151 5.7% 71,298 4.6% 49,853 69.9%

Other knitting products 78,914 3.8% 42,424 2.7% 36,490 86.0%

Total 2,107,078 100% 1,552,907 100% 554,171 35.7%

Significant growth in sports wear contribution was attributable to substantial increase in OEM manufacturing for renowned sports brands (Adidas, Nike, Puma and Kappa) as a result of increasing proportion of high-end products.

Efficiently adjusted product portfolio and client base by reducing sales of lower profit margins products, leading to a decrease in casual wear sales

Lingerie business has delivered solid performance in response to the demand in Japan

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Contribution from Japan decreased by 5.9% owing to adjustment in product and client base in order to maintain the satisfactory profitability level

Continuous growth in the Europe and other markets, including Hong Kong, Korea and Australia, was attributable to the market diversification strategy and the global market demand from certain customers

Domestic sales reported robust growth attributable to the demand of high-end sports wear and favorable impact of 2008 Beijing Olympics Game, driving demand for sports apparel from renowned brand names etc

Turnover Breakdown by Regions

6 months ended 30 June

2008 2007 Change

RMB'000 % RMB'000 % RMB'000 %

Japan 1,016,746 48.3% 1,080,189 69.6% (63,443) (5.9)%

Europe 294,306 14.0% 183,439 11.8% 110,867 60.4%

United States 93,122 4.4% 74,655 4.8% 18,467 24.7%

Other countries 180,127 8.5% 94,167 6.1% 85,960 91.2%

Domestic market 522,777 24.8% 120,457 7.7% 402,320 334.0%

Total 2,107,078 100% 1,552,907 100% 554,171 35.7%

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Healthy Financial Position

2008 2007

Inventory turnover days 90 94

Debtor turnover days 29 26

Creditor turnover days 38 49

For the 6 months ended 30 June

2008 2007

Gearing ratio (debt to equity) (%) 41.4% 30.9%

Cash and Cash Equivalent (RMB Mn) 312.0 118.2

Net assets (RMB Mn) 2,529 2,281

Total assets (RMB Mn) 4,620 3,467

For the 6 months ended 30 June

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Business Review

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Robust Growth of the PRC Market

Benefited from:– 2008 Beijing Olympics Games– Increasing demand of high-ended sports wear in PRC market– Availability of more sports wear products manufactured by the Group for the

sales in domestic market for internationally renowned clients

Mitigated the impact on RMB appreciation & decrease of VAT refunds

475.9

87.128.7

2006 2007 2008

6 months ended 30 June

Garment sales contribution by domestic market Garment sales contribution by domestic market

CAGR: +407%RMB mn

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Sports wear customersSports wear customers

Casual wear customersCasual wear customers

Two renowned sports wear customers, ADIDAS and NIKE, accounted for 32.5% (1H2007: 15.6%) of Group’s total turnover, while PUMA and KAPPA also began to contribute significantly in terms of sales

Successfully established a more diversified and risk-resistant customer structure

Continue to strengthen strategic partnership with the international renowned brands including Marks & Spencer, the largest chain store in the UK, and SEPTWOLVES, a renowned causal wear brand in the PRC, during the period

Rationalization of Client Base

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Strategies and Plans

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Achieve industry integration and structural adjustment to counteract the pressure arising from RMB appreciation

and increasing production costs

Further adjust product portfolio, market layout and customer mix to enhance negotiating power in respect of orders received and improve profitability

Optimize manufacturing process through perfecting logistics, increasing fabric utilization rate and enhancing manufacturing efficiency of apparel production process in order to strengthen our overall competitiveness

Enhancement of Administrative Standards

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Lingerie wearLingerie wear

SportsSports wear wearCasualCasual wear wear

Flexible Deployment of Production Capacity

Intend to establish a woven garment processing factory in Zhejiang to diversify OEM services products apart from providing basic knitwear to customers, boosting the proportion of sports wear sales

Production capacity in the Cambodia manufacturing base will be adjusted in accordance with the demand of major customers to capture market trend

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Europe

Asia

US

Further Expansion in Domestic Market & Balanced Development in Non-quota Markets

The US is expected to remove its transitional garments quota restriction by 2009 followed by the withdrawal of garment quota in the EU this year. The Group will develop in the American and European markets to secure the demand of high-ended orders from major customers

Greater efforts in increasing sales contribution from domestic market to mitigate the impact on RMB appreciation

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Improvement of Integrated Competitiveness

The Most Competitive Textile & Garment

Manufacturer In the World

Enhancement of

administrative standards

Flexible deployment of

production capacity

Further expansion in domestic market & balanced development in

non-quota markets

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Open Forum