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1 April 2008

2007 Annual ResultsCorporate Presentation

Stock Code: 3818.HK

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Content

Financial Review

Accomplishments

Business Review

Future Plans & Strategies

Open Forum

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Accomplishments1. Robust revenue growth

Sales grew by 99.2% year-on-year to RMB1,711.0 million

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3. High profitability Impressive gross and net margins (included one-off interest income of RMB44 million) of 58.5% and 42.9% respectively Profit attributable to equity holders surged by 139.4% to RMB733.6 millionBasic earnings per share rose by 123.8% to RMB15.89 cents

4. Strong cash inflows Net cash generated from operating activities in 2007 amounted to RMB656 million, which accounted for 89.5% of the net profit for the year

In view of the above, the Company proposed payment of a final dividend of RMB 1.09 cent per share

2. Substantial sales network expansionNumber of Kappa brand retail outlets reached 1,945, a net increase of 807 outlets or 71% growth

3

Achievements

Awarded the “Distinguished CEO

of the Year 2007” by Capital CEO Magazine

Successfullylisted on

The Stock Exchangeof Hong Kong

Limitedon 10 Oct, 2007

Ranked No. 1in Forbes

“China Best SMEs2008” Ranking

2008

2007

Became a constituent stock

of Heng SengComposite Indexand Heng SengFreefloat Index

2008

2007

4

Financial Review

5

Financial Highlights

2007(RMB ’000)

2006(RMB ’000)

Change(%)

Sales 1,711,023 858,921 +99.2%

Gross profit 1,000,573 535,561 +86.8%

Operating profit 724,721 385,608 +87.9%

Net cash generated from operating activities 656,354 347,906 +88.7%

Profit attributable to equity holders * 733,568 306,459 +139.4%

(RMB cents) (RMB cents)

Basic earnings per share 15.89 7.10 +123.8%

Diluted earnings per share 15.82 7.07 +123.8%

Final dividend per share 1.09 -- n.a.

For the year ended 31 December

*Included one-off interest income of RMB44,742,000. If the one-off income is excluded, the operating profit will be RMB688,826,000, with an increase of 124.8%

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Sales Breakdown – by Business Segment

Internationalsourcing

and Rukka2.3%

Kappa97.7%

Kappa is our primary businessKappa is our primary business

2006 Revenue 2007 Revenue

Internationalsourcing and

Rukka3.9%

Kappa96.1%

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Sales Breakdown – by Products

Rapid growth across 3 product categoriesFootwear sales achieved highest growth

RMB million

652.1

1,227.0171.1

403.0

35.7

81.0

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2006 2007

Remarks: Comparative figures for 2006 are shown in brackets

For the yearended

31 Dec 2007

4.7%(4.2%)

23.6%(19.9%)

71.7%(75.9%)

FootwearAccessories

ApparelFootwearApparel Accessories

1,711.0

858.9

+88.2%

+135.5%

+126.5%

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Unit ASP Growth

Apparel FootwearRMB RMB

131

150

0

50

100

150

200

2006 2007

+ 14.5%

Launch of more high-end apparel products drove unit ASP growth and strengthened the high-end positioning of Kappa in the PRC’s sportswear market

134

164

0

50

100

150

200

2006 2007

+ 22.4%

More high-end products were launched and sold at a higher unit ASP

Enhanced the R&D and product quality of footwear, to improve the product mix

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Volume Growth

Apparel FootwearUnit ‘000 Unit ‘000

4,968

8,176

0

2,000

4,000

6,000

8,000

10,000

2006 2007

+ 64.6%

Strong product demand drove high volume growth

Stronger R&D capabilities to launch products which meet market needs

1,277

2,461

0

500

1,000

1,500

2,000

2,500

3,000

2006 2007

+ 92.7%

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Gross Margin by Products

Gross margin adjustment in line with development strategies:1. Overall

Newly implemented a target-driven discount policy providing higher discounts to distributors who could better achieve the sales and performance targets set by the GroupIncreased proportion of footwear product sales to optimize the product mix. As footwear products has a lower gross margin, there was a slight decrease in the overall gross margin

2. Footwear productsEnhanced material used and craftsmanship in footwear products to provide customers with products of higher quality

2007(%)

2006(%)

Change(%)

Apparel 61.0% 64.5% - 3.5%

Footwear 50.7% 55.6% - 4.9%

Accessories 58.8% 55.8% + 3.0%

Overall 58.5% 62.4% - 3.9%

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Gross Margin by Business Segment

2007(%)

2006(%)

Change(%)

Kappa 59.9% 63.4% - 3.5%

International sourcing & Rukka 22.5% 19.4% 3.1%

Overall 58.5% 62.4% - 3.9%

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Operating Expenses

Able to spend relatively less in advertising & marketing:Leveraged on global promotionUnique market positioning: Fashion + SportsHighly effective entertainment-oriented marketing strategies and promotional activitiesEncouraged better shop renovation and promotion through target-driven sales policy

Increased investment in design and product development

2007 2006 Change

Advertising & marketing(as a % of sales)

6.5% 8.1% - 1.6%

Employee salary and benefit (as a % of sales) 3.5% 3.0% +0.5%

Design and product development(as a % of cost of sales)

4.3% 2.5% +1.8%

Total operating expenses(as a % of sales)

17.3% 18.6% -1.3%

For the year ended 31 December

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Key Working Capital Efficiency Indicators

2007 2006 Change(days)

Inventory turnover days 49 70 -21

Accounts receivable turnover days 24 27 -3

Accounts payable turnover days 75 89 -14

Working capital days -2 8 -10

Improvements attributable to:Effective supply chain management

Increased number of trade fairs from 2 times to 4 times each year

Effective credit control policy

As at 31 December

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Strong Financial Position

2007(RMB ’000)

2006(RMB ’000)

Cash & cash equivalents 5,311,060 274,749

Net cash generated from operating activities 656,354 347,906

Current ratio 18.4 times 2.1 times

Net asset value 5,901,831 307,504

Current assets 5,815,342 506,096

Current liabilities 315,218 237,832

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Dividend Policy

Recommended a final dividend of RMB 1.09 cents per share, totally RMB 61,881,000, of approximately 37% of the Group’s net profits available for distribution for the period from 10 October (the Listing Date) to 31 December 2007

25% normal payout + additional 12% distribution represents partial one-off interest income from IPO over-subscription monies of which the Company would like to share with its shareholders

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Business Review

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Business Review

Effective marketing strategy

Innovative product design and development

Distribution and retail network expansion

Comprehensive supply chain management

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2

3

4

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Effective Marketing Strategies

Consistentstore

design

Targeted mediaadvertising

Globalpromotion ofKappa brand

Co-branding

Sponsorshipon a

selective basis

FashionFashion++

SportsSports

1

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Effective Marketing Strategies1

Sponsorship of:China Open Tennis Championship

Hong Kong Table-tennis Team and the PRC 49er Sailing Team, both teams will participate in 2008 Olympic Games

A delegation wearing Kappa brand products delivering Fuwa, the mascots for the 2008 Olympic Games

Electronic Sports World Cup

Tibet mountaineer team for climbing Mt. Everest

Co-sponsorship of AS Roma, the top Italian soccer team

Sportsoriented

Reinforced Kappa’sbrand positionEnhanced Kappa’sbrand recognitionin domestic market

AS Roma

Hong Kong Table-tennis team

China Open Tennis Championship

The mascots for the 2008 Olympic Games, Fuwa

Tibet mountaineer team

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Effective Marketing Strategies1

Fashion oriented

Launched co-branding events with other well-known brandsRealized synergies with brands with similar philosophyConsistent store design to create an active, fashionable and pleasant shopping experience

Co-branding with Pepsi Coke & 7-UpKappa and Peugeot Citroen co-branding eventSponsorship of dancing competition hosted by MTV

AdvertisementCo-branding with Pepsi CokeCo-branding with Peugeot Citroen

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Effective Marketing Strategies1

Charity oriented

Participated in “I want to go to school” campaign organized by the China National Road and the China Youth Development FoundationParticipated in the “Life Line Express” event

“I want to go to school”

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Innovative Design &Development Capabilities2

Talented, innovative and professional product development team with passion

Comprising of designers and merchandisers from the PRC, Korea and Italy etc

Establishment of Korea design centre

Establishment of Taichang design centre in the PRC

Design teamDesign team Merchandising teamMerchandising team&

Further inspired fashion sense and innovative ideas

Ascertained the fashion trends and market needs

Sports fashion brand with distinct designSports fashion brand with distinct design

Internationalrenownedpartners

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Extensive Distribution & Retail Network3

Flagship store

Operating with distributors and open flagship outlets in prime shopping areas of 1st-tier cities in the PRC

2 flagship stores opened in Harbin and Hangzhou

Plann to open more than 10 flagship stores by the end of 2008

“Primary distributor” policy

41 distributors who directly or indirectly operate 1,945 Kappa outlets of the prime locations in the PRC and Macau

Typically appointed only one primary distributor in one defined geographical area to motivate distributors and enhance loyalty

Renovation of retail outlets, including expansion of retail outlets areas and enhance the shop image

Provided training for the front-line sales

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Extensive Distribution & Retail Network

Opportunities in No. of retail outlets

2007 2006 Net increase Net increase (%)

Kappa Brand 1,945 1,138 807

5 27

8341,143

71

Rukka Brand 32 540

Total 1,977 73

Aggressive network expansion to capture the fastAggressive network expansion to capture the fast--growing market in Chinagrowing market in China

Overall network expansion

1,977

1,143

0

500

1,000

1,500

2,000

2,500

2006 2007

Growth: +73%

<25 retail outlets

>25 & <50 retail outlets

>50 & <100 retail outlets

>100 retail outlets

Fujian(74)

Tianjin(48)

TaiwanGuangxi

(31)

Guizhou(26)

Hunan(58)

Jiangxi(40)

Anhui(68)

Sichuan(120)

Shandong(88)

Hebei(78)Shanxi

(42)

Gansu(7)

Ningxia(2)

Inner Mongolia(19)

Jilin(64)

Qinghai(1)

Xinjiang(11)

Tibet(2)

Hainan(9)

Shaanxi(33)

Chongqing(53)

Macau(4)

Guangdong(142)

Beijing (75)

Yunnan(36)

Liaoning (137)

Jiangsu(197)

Zhejiang(162)

Shanghai(70)

Hubei(113)

Henan(65)

Heilongjiang(89)

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Comprehensive Supply Chain Management

Brand Positioning

Outsourcing

Brand OwnerSupplymanagement

DistributionmanagementER

P-SA

P System

DR

P System

DistributionDistributionnetworknetwork

Outsourcing

SupplySupplychainchain

Wholesaling

MarketingMarketing

R & DR & D

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Adopt the asset-light business model90 manufacturers selectively engaged to process and manufacture in 2007, while distribution was outsourced to 44 distributors and and consignees Distribution centres in Beijing and Jiangsu Province with approx. 12,169 sq. m. and 5,722 sq.m. respectively to shorten the time of distribution and expedite response timeNewly installed ERP-SAP system linked to a DRP system enhanced exchange of information among departments and strengthened distribution network management

Roll-to-rollproduction

Supply Marketfeedback

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Future Plans &Strategies

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Future Strategies

Retail network

expansion

Brand building

Multi-brandstrategy

Enhance internal

operation

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Brand Building

FashionFashion++

SportsSports

Enhance product design and development capabilities through establishment of overseas design and development centresFurther cooperate with well-recognized international design and development institutesContinue to sponsor selective sports and fashion activitiesActively participate in publicity activities for the 2008 Beijing Olympic Games Explore new co-branding with Pepsi, Peugeot Citroen and other famous brandsEstablish flagship outlets in prime shopping locations in 1st-tier cities

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Retail Network ExpansionFocus on prime shopping areas and 1st-tier cities, high potential 2nd- and 3rd-tier cities in North Eastern and South Eastern regions in the PRC

Set up retail joint ventures with key distributors

More than 10 flagship stores by end of 2008

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Enhance Internal Operation

Enhance ERP-SAP system to further integrate operations with manufacturers, distributors and retail networks

Set up the 3rd distribution centre in Guangdong province to enhance the responsiveness in southeast and southern area

Provide comprehensive trainingprogrammes to enhance theprofessional and managementskills of employees

Through international M&A tointroduce professionals andenhance the internationalstandard of the management

Plan to establish new operatingheadquarters in Beijing tocater to its future growth

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Multi-brand strategies

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Experienced

management

Strongfinancialresources

Achievesynergy

from multi-brand

strategy

Launch the Robe Di Kappa (“RDK”) brand under the Kappa brand umbrella in 2H 2008

Explore more opportunities for acquisition of international brands to have ownership or long-term operation rights in the PRC or regional market

To achieve synergy from the Group’s multi-brand strategy

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Brand Acquisition

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Overview of the transaction

Entered into a letter of intent (“LOI”) with Orix Corporation for the acquisition of Phenix Co., Ltd. (‘’Phenix”)

Brand Acquisition

About Phenix

Operation commenced in 1952, Phenix is a renowned sporting apparel company with core operations in design, development and salesPossession of PHENIX brand, with the largest market share of skiing sportswear in Japan One of the three Kappa brand owners in the world, possession of Kappa brand in Japan Excellent design and R&D capabilities

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Brand AcquisitionBenefits to China Dongxiang

In line with the Group’s long term strategy – international and regional multi-branding

Strengthen design and R&D capabilities to drive the development

Enhance brand image, product design and management

Replicate its success in brand management, operation and cost control to enhance the business performance of Phenixand Kappa in Japan

Tap opportunities in the high quality skiing and outdoor sportswear segment in the PRC market

Enhance the human resources structure through introduction of experienced management

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To become the leading multi-brand sportswear enterprise in the PRC

Vision

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VisionVisionTo become ChinaTo become China’’s most excellent s most excellent

sportswear brand management sportswear brand management company company

MissionMissionTo provide more choices and To provide more choices and

create higher value to create higher value to sportswear consumers on sportswear consumers on

the basis of our multithe basis of our multi--brand brand strategystrategy

Vision and Mission

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Open Forum