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FINANCIAL OVERVIEW

Financial Highlights2019 2018 Changes

Revenue (RMB million) 14,810.6 10,533.5 40.3%

Gross profit (RMB million) 8,302.0 5,726.4 45.0%

Profit from operations (RMB million) 4,257.4 2,688.6 58.4%

Profit for the period (RMB million) – Excluding the share of loss of a joint venture 3,073.6 2,001.8 53.5%

Profit for the period (RMB million) – Including the share of loss of a joint venture 2,581.5 2,001.8 29.0%

Profit attributable to equity shareholders (RMB million) 2,482.7 1,944.8 27.7%

Basic earnings per share (RMB cents) 92.50 72.44 27.7%

Free cash inflow (RMB million) 2,700.6 1,223.3 120.8%

Gross profit margin 56.1% 54.3% 1.8p.p.

Operating profit margin 28.7% 25.5% 3.2p.p.

Net profit margin – Excluding the share of loss of a joint venture 20.8% 19.0% 1.8p.p.

Net profit margin – Including the share of loss of a joint venture 17.4% 19.0% 1.6p.p.

Margin of profit attributable to equity shareholders 16.8% 18.4% 1.6p.p.

Total dividends per share (HK cents) 31.0 50.0 38.0%

Dividend payout ratio 30.5% 61.0% 30.5p.p.

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Revenue

ANTA brand revenue 18.3% mainly driven by:

➢ Increasing market recognition

➢ ANTA KIDS revenue recorded significant growth

FILA brand revenue 79.9% mainly driven by:

➢ Increasing market recognition

➢ Strong performance in retail business, increase in physical stores and efficiency

➢ Development of e-commerce

Breakdown by segment

2019 1H 2018 1H Changes

Revenue(RMB million)

(% of revenue)

Revenue(RMB million)

(% of revenue) (%)

ANTA 7,589.7 51.2 6,416.7 60.8 18.3

FILA 6,537.8 44.1 3,635.1 34.4 79.9

All other brands 683.1 4.7 501.7 4.8 36.2

Overall 14,810.6 100.0 10,553.5 100.0 40.3

Revenue 40.3% to RMB14.81 billion

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Gross Profit MarginGP margin 1.8p.p to 56.1%

In Overall GP margin due to:

➢ contribution of FILA and it had higher GP

Breakdown by segment

2019 1H 2018 1H Changes

GP(RMB million) GP margin (%) GP

(RMB million) GP margin (%) in GP(%)

in GP margin(p.p)

ANTA 3,225.3 42.5 2,829.6 44.1 14.0 1.6

FILA 4,673.0 71.5 2,607.0 71.7 79.2 0.2

All other brands 403.7 59.1 289.8 57.8 39.3 1.3

Overall 8,302.0 56.1 5,726.4 54.3 45.0 1.8

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Operating Profit MarginOP margin 3.2 p.p to 28.7%

OP margin3.2% due to：

➢ Retail business contribution with higher GP margin

➢ Early receipt of government grants

➢ Operating expenses ratios (account for revenue) were relatively stable

By segment in this financial period

2019 1H 2018 1H Changes

OP(RMB million)

OP margin(%)

OP(RMB million)

OP margin(%)

in OP(%)

in OP margin(p.p)

ANTA 2,442.3 32.2 1,718.9 26.8 42.1 5.4

FILA 1,894.4 29.0 1,047.0 28.8 80.9 0.2

All other brands (79.3) (11.6) (77.3) (15.4) 2.6 3.8

Overall 4,257.4 28.7 2,688.6 25.5 58.4 3.2

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Operating Expenses RatiosA&P expenses %* 1.7 p.p to 10.0%，due to：

➢ Due to notable of overall revenue

Staff costs %* 1.2 p.p to 12.5%, due to:

➢ Staff number due to business expansion

R&D cost %* 0.4 p.p to 2.4%, due to:

➢ Due to notable of overall revenue

* In terms of revenue

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Share of Loss in Joint Venture and Margin of Profit Attributable to Equity Shareholders

Margin of profit attributable to equity shareholders 1.6 p.p to 16.8%，due to：

➢ Interest expenses

➢ Share loss in joint venture

Share of Loss in Joint Venture was RMB492 million:

➢ Net loss is expected by the Group, no adverse change to investment value

Summarised consolidated financial information of Mascot JVCo

From 26 Mar 2019 to 30 Jun 2019

(RMB million)

Revenue 3,964.1

Net loss (849.4)

Other comprehensive loss

(205.5)

As at 30 Jun 2019(RMB million)

Net assets 19,697.9

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Working Capital Management

Average inventory turnover 4 days to 87 days，due to：

➢ contribution from retail operations

Average trade receivables turnover 1 day to 34 days

Average trade payables turnover 2 days to 51 days

➢ Both remained at relatively normal levels

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2019 2018

(RMB million) (RMB million)

6 months ended 30 June

Net operating cash inflow 3,440.7 1,475.7

Capital expenditures (740.1) (252.4)

Free cash inflow 2,700.6 1,223.3

As at 30 June

Cash and cash equivalents 8,198.5 6,932.6

Fixed deposits held at banks with maturity over three months 138.7 3,165.9

Pledged deposits 159.3 158.6

Bank loans (7,568.1) (1,236.2)

Bills payable (financing in nature) (469.3) -

Net cash position 459.1 9,020.9

Liquidity and Financial Resources

Net operating cash inflow 133% to RMB3.44 billion,

which represents strong cash generation capability of the Group

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BUSINESSREVIEW

Market Review

Even with uncertainty clouding the external environment, China’s economy is in steady development

China’s Economy in 2019 1H

According to the National Bureau of Statistics of China:• GDP +6.3% to RMB45 trillion• Total retail sales of consumer goods +8.4% to RMB20 trillion

China’s Sports Industry

Despite the global economic uncertainties, consumer goods, including sportwear,remains the most resilient sector

Along with the ongoing preparation for the 2022 Winter Olympics, winter sports isbecoming more and more popular in China and hope to reach the goal of helping300 million people to participate in winter sports

However, the competition is keen amid the tremendous opportunities in sportsindustry, so it is necessary to target allocations according to the differences inpopulation, distribution channels, and consumption capabilities

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Striving for“Riding on Synergistic Incubation to Achieve Value Retailing and Internationalization”

Kick off the “Year of Synergy and Value” to implement reorganization and improve management effectiveness

ReorganizationDividend our brands into three categories for centralized management:1. Performance Sports Brand Group2. Fashion Sports Brand Group3. Outdoor Sports Brand Group

SynergyEach brand group cooperate closely with each functional department:• Each brand group has dedicated team for design,

branding, sales and distribution, withimplementation of “Category System”

• Set up organization team for retail, sourcing,production and ecommerce function

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RetailProduction

Sourcing

Ecommerce

ANTA Provides Value-for-money Functional ProductsKeeping up with technology and trends is the key to success

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• ANTA launched its brand-new Hydrogen Running Shoes. Based onFLASHLITE which is developed by ANTA, the product weighs a mere110 grams. Its unique materials provide rigidity, sturdiness, supportand durability, offering a unique and light sports experience tomass runners

• In order to the mark the 133th birthday of Coca Cola, ANTApartnered with Coca-Cola to launch a number of collaborativefootwear and apparel. The products aimed to evoke “happiness”

• As the official sportswear partner of the COC, and with the Beijing2022 Winter Olympic Games due in 1,000 days, ANTA collaboratedwith the Palace Museum’s ‘Beijing Culture Creativity’, launching“ANTA X Winter Olympic Games” products. ANTA also sponsored26 Chinese national teams in winter sports, boxing, taekwondo,gymnastics, weightlifting, wrestling, judo, surfing, water polo andgolf etc.

ANTA KIDS

ANTA KIDS provides sportswear products for children aged 0 to 14

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• As the first domestic sportswear brand to enter the market, ANTAKIDS enjoys the advantage of being an early-entry trailblazer

• Following the Marvel heroes series last year, ANTA KIDScollaborated with Frozen during the period to launch crossoverproducts, which have been welcomed and acclaimed by the generalpublic

• Zhang Yuexuan (Tian Tian), son of model Zhang Liang, continued tobe ANTA KIDS’ endorser. Consumers got to know more aboutANTA KIDS through the fashionable, mischievous and warm imageof Tian Tian. The star’s products gained much attention from themarket, achieving growth in both brand recognition and marketshare.

FILA

FILA has been positioned as a high-end fashion sports brand, offering consumers unique and differentiated sportswear products

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• In addition to series like FILA RED, FILA WHITE, FILA BLUE and FILA

ORIGINALE, we continued to work with renowned designer, Phillip

Lim, on the FILA X 3.1 Phillip Lim series

• Lead trends in high-end sportswear with collaborations with actors

such as Huang Jingyu and Ma Sichun

• Launched shoes series such as Classic Kicks in March and Disruptor

Sandals in April to extend the brand’s classic series. Both of them

rode on the continuation of classic image and became the necessity

of fashion icons

FILA KIDS & FILA FUSION

FILA KIDS and FILA FUSION aim to reach more high-end consumers

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• FILA KIDS aims to provide apparel and footwear for children aged 3

to 14, with the launch of several new series such as FILA KIDS RED

LINE and FILA KIDS MODERN HERITAGE, in order to expand the

infiltration in the high-end kidswear market

• FILA FUSION invited famous Japanese celebrity, Kōki, to become an

endorser of the brand, marking its full entry into the market for

youths aged 20 to 30. FILA FUSION has launched crossover series

with different international renowned brands, which successfully

further enhanced the brand image and strengthened brand

recognition in the market

DESCENTEDESCENTE focuses on high-end sportswear products, expanding its retail

footprint in the high-end segments of the Chinese sportswear market

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• DESCENTE focuses in high-end market skiing, cross-training and running

• DESCENTE and KH. TRAINING STUDIO jointly held a body-building training session in Shanghai to encourage women to explore their own potential in sports. DESCENTE also partnered with the famous British illustrator BEACH-O-MATIC to launch a summer crossover series, fully reflecting the spirit of driving happiness through sports

• With the rapidly growing winter sports market, DESCENTE will grasp the huge potential of the winter sports market and forge itself into one of the most successful sportswear brands in China ahead of the Beijing 2022 Olympic and Paralympic Winter Games

KOLON SPORT

KOLON SPORT strives for excellence in product design by integrating outdoor living with fashion

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• KOLON SPORT integrated existing stores and gradually increased

the proportion of outdoor sports products. Following to the rise of

China’s middle class and the millennial generation, KOLON

SPORT will continue to expand its footprint in the outdoor

sportswear market and seize more market opportunities

• KOLON SPORT launched the Noach Project – its series were made

of natural fibre which was eco-friendly hemp, successfully

attracting the interest of consumers

SPRANDI

SPRANDI mainly focuses on the fashionable athletic footwear market, continuing to grow and penetrate the emerging middle-class market

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• SPRANDI continues to heighten what differs its brandcompetitiveness by enhancing its brand image via seasonalpromotional activities with various engaging themes

• SPRANDI has relaunched the retro “Super Claw” shoes, withbrand new elements added to the retro design. Leveraging the60th anniversary of the classic toy Barbie, SPRANDI launchedlimited edition crossover shoes series by becoming a hot topic onsocial media, further promoting the sensational connectionbetween its products and female customers

KINGKOW

KINGKOW provides quality kidswear to 0 to 14 kids in mid- to high-end market

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• KINGKOW is a popular kidswear brand targeting the mid- tohigh-end market

• KINGKOW improved store efficiency through optimizing the storenetworks with improved retail performance

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持续不断地完善销售网络，扩大品牌影响力

Distribution Network Management

Continue to improve sales network to expand brand influence

10,223 1,788 115 110 70173

Key market tiers

Store formats

*predominately

Number of stores

by 30 June 2019

2nd, 3rd and lower tier cities

1st and 2ndtier cities

1st and 2ndtier cities

• Street stores*• Shop-in-shop• Outlet store• Online shop

• Shop-in-shop*• Online shop

1st and 2ndtier cities

1st and 2ndtier cities

2nd, 3rd and lower tier cities

• Shop-in-shop*• Outlet store• Online shop

• Shop-in-shop*• Online shop

• Shop-in-shop*• Outlet store• Online shop

• Street store*• Shop-in-shop• Outlet store• Online shop

Retail Channels Optimization

The sustainability of the distribution network and the important factors of the store, namely location, space, efficiency and interior decoration,

are more important than the number of stores

• Introduced ANTA“Ninth-Generation Stores” inChongqing and Shanghai. The new Shanghai ANTAninth-generation store spans 2,000 square meters.ANTA upgraded the stores in terms of brand image,store appearance and consumer experience

• ANTA KIDS opened Store 4.0 with a theme of “WILDPARK” and the brand’s unique feature to createultimate experience of“Fun”. The store also has abrand-new ANTA KIDS physical testing system 4.0,which breaks the barrier between online and offline,and allows consumers to have better shoppingexperience

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E-commerce Business

Following to e-commerce segment is gaining prominence in our business and we will continue to explore further profitable market opportunities

• We offered a wide selection of new products through launchingexclusive online products and offline in-season products

• We have collaborated with various e-commerce platforms, includingTmall, JD and Vipshop, to further boost the performance of oure-commerce business

• We optimized our e-store interface, improved product descriptions andpresentation, and enhanced our product search and catalogingfunctions. We also standardized the time, priority and designs ofproducts launched on e-commerce platforms, bringing synergy to bothonline and offline retailers to achieve a win-win situation

• We provide comprehensive customer services, including securepayment systems, a well-established supply chain, fast and reliabledelivery services, VIP membership and product return guarantees

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Supply Chain and Product Management

Comprehensive, efficient and logical supply chain management is the focus. The key lies in technological innovation, original design and

product safety

• Implementing a strict partner selection regime on suppliers to enhancetheir efficiency , governance, production and operation standards

• Supported by high-quality OEMs, our inhouse manufacturing facilitieshave extra capacity to efficiently and flexibly meet unexpected demandin a cost-effective manner

• To be more flexible in fulfilling replenishment orders and maintain ourcost advantage, we have further optimized the efficiency of ourproduction process. ANTA’s self-produced footwear and apparelaccounted for 34.4% and 11.9% of total sales, respectively (the first halfof 2018: 34.3% and 16.7%）

• We have a science laboratory in Jinjiang, Fujian Province, and designoffices in China, US, Japan and Korea. Our R&D costs as a percentageof revenue reached 2.4%, demonstrated our commitment to driveinnovation

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PROSPECTS

Give Full Play to Synergy and Transform into Internationalization

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