Disclaimer

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FINANCIAL OVERVIEW

Financial Highlights

2019 2018 Changes

Revenue (RMB million) 33,927.8 24,100.0 40.8%

Gross profit (RMB million) 18,659.0 12.687.3 47.1%

Profit from operations (RMB million) 8,694.7 5,699.8 52.5%

Profit for the year (RMB million) – Excluding the share of loss of a joint venture 6,257.2 4,234.2 47.8%

Profit for the year (RMB million) – Including the share of loss of a joint venture 5,624.1 4,234.2 32.8%

Profit attributable to equity shareholders (RMB million) 5,344.1 4,102.9 30.3%

Basic earnings per share (RMB cents) 198.70 152.82 30.0%

Free cash inflow (RMB million) 6,433.0 3,448.9 86.5%

Gross profit margin 55.0% 52.6% 2.4p.p.

Operating profit margin 25.6% 23.7% 1.9p.p.

Net profit margin – Excluding the share of loss of a joint venture 18.4% 17.6% 0.8p.p.

Net profit margin – Including the share of loss of a joint venture 16.6% 17.6% 1.0p.p.

Margin of profit attributable to equity shareholders 15.8% 17.0% 1.2p.p.

Total dividends per share (HK cents) 67.0 78.0 14.1%

Dividend payout ratio 30.7% 44.8% 14.1p.p.4

Revenue

ANTA brand revenue 21.8% mainly driven by:

➢ Increasing market recognition

➢ ANTA KIDS' revenue recorded significant growth

FILA brand revenue 73.9% mainly driven by:

➢ Increasing market recognition

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

➢ Development of e-commerce

Revenue 40.8% to RMB33.9billion

Breakdown by segment

2019 2018 Changes

Revenue(RMB million)

(% of revenue)

Revenue(RMB million)

(% of revenue) (%)

ANTA 17,449.8 51.4 14,326.8 59.4 21.8

FILA 14,770.1 43.5 8,491.7 35.2 73.9

All other brands 1,707.9 5.1 1,281.5 5.4 33.3

Overall 33,927.8 100.0 24,100.0 100.0 40.85

Gross Profit Margin

GP margin 2.4 p.p to 55.0%

In Overall GP margin due to:

➢ Contribution of FILA with higher GP

Breakdown by segment

2019 2018 Changes

GP(RMB million) GP margin (%) GP

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

in GP margin(p.p)

ANTA 7,200.6 41.3 6,022.5 42.0 19.6 0.7

FILA 10,402.5 70.4 5,931.8 69.9 75.4 0.5

All other brands 1,055.9 61.8 733.0 57.2 44.1 4.6

Overall 18,659.0 55.0 12,687.3 52.6 47.1 2.4

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Operating Profit Margin

OP margin 1.9 p.p to 25.6%

OP margin 1.9% due to：

➢ Retail business contribution with higher GP margin

➢ Operating expenses ratios (as a % of revenue) were relatively stable

Breakdown by segment

2019 2018 Changes

OP(RMB million)

OP margin(%)

OP(RMB million)

OP margin(%)

in OP(%)

in OP margin(p.p)

ANTA 4,676.2 26.8 3,706.2 25.9 26.2 0.9

FILA 4,022.8 27.2 2,149.8 25.3 87.1 1.9

All other brands (58.2) (3.4) (156.2) (12.2) N/A 8.8

Subtotal 8,640.8 25.5 5,699.8 23.7 51.6 1.8

Gain on disposal of joint venture interest 53.9 N/A - N/A N/A N/A

Overall 8,694.7 25.6 5,699.8 23.7 52.5 1.97

Operating Expenses Ratios

A&P expenses %* 1.5 p.p to 10.6%，due to：

➢ Notable in overall revenue

Staff costs %* 0.8 p.p to 11.7%, due to:

➢ Employees due to business expansion

➢ Grant of awarded shares to employees

R&D cost %* 0.2 p.p to 2.3%, due to:

➢ Notable in overall revenue

* In terms of revenue

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

Margin of profit attributable to equity shareholders 1.2 p.p to 15.8%，due to：

➢ Interest expenses

➢ Share of loss of a joint venture

Share of Loss of a Joint Venture was RMB633 million:

➢ Net loss is expected by the Group

➢ No adverse change to investment value

Summarised consolidated financial information of the joint venture

From 26 March 2019 to 31 December 2019

(RMB million)

Revenue 17,499.0

Loss from continuing operations (1,003.8)

Net loss (1,092.6)

Other comprehensive loss (111.9)

Total comprehensive loss (1,204.5)

As at 31 December 2019(RMB million)

Total assets 59,176.1

Total liabilities (39,572.9)

Total Equity 19,603.2 9

Working Capital Management

Average inventory turnover 6 days to 87 days，due to：

➢ Contribution from retail operations

Average trade receivables turnover 1 day to 34 days

Average trade payables turnover 5 days to 57 days

➢ Represent strong cash management and healthy operating cash inflow

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Liquidity and Financial Resources

Net operating cash inflow 68.6% to RMB7.5billion,

which represents strong cash generation capability of the Group

2019 2018

(RMB million) (RMB million)

Year ended 31 December

Net operating cash inflow 7,485.0 4,439.7

Capital expenditures (1,087.2) (808.2)

Acquisition of interest in a subsidiary - (183.9)

Others (35.2) 1.3

Free cash inflow 6,433.0 3,448.9

As at 31 December

Cash and cash equivalents 8,220.7 9,283.7

Fixed deposits held at banks with maturity over three months 4,381.9 807.8

Pledged deposits 4.3 1,662.2

Bank loans (8,002.4) (1,313.6)

Bills payable (financing in nature) (1,200.0) (469.3)

Net cash position 3,404.5 9,970.8 11

BUSINESS REVIEW

Market Review

China’s Economy in 2019

According to the National Bureau of Statistics of China• GDP +6.1% year on year• Total retail sales of consumer goods +8.0% to RMB 41.2 trillion• Consumer price index +2.9% year on year

Black swan events such as trade war and coronavirus will have certain impact on the global andChinese economy

China’s Sports Industry

The country’s sport policies have been supporting the growth of sports industry, for example,China’s National Development and Reform Commission and General Administration of Sport issuedan "Action Plan to Stimulate Sports Consumption (2019-2020)", with the aim to have the total size ofsports consumption market in the country reaching RMB 1.5 trillion by 2020.

Although the risk of coronavirus remains, the outbreak in China has slowed down and we haveconfidence that it is under the government’s control

Acceleration in the industry integration is beneficial to leading brands

After the outbreak of coronavirus, people’s pursuit of a healthy and hygienic lifestyle will continue togrow, as such, we see the sportwear industry’s foundation continually improving

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Volatility in Global and Chinese Economy in Short-Term, Sports Industry’s Long-Term Fundamental Remains Strong

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

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ReorganizationDivided our brands into three business groups for centralized management:1. Performance Sports Brand Group2. Fashion Sports Brand Group3. Outdoor Sports Brand Group

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

branding, sales and distribution, with implementation of "Category System"

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

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

RetailProduction

Sourcing

Ecommerce

ANTA is a High Quality, Functional Professional Sports Products Brand

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• As the official sportswear partner of the Chinese OlympicCommittee, ANTA continued to support Chinese athletes

• ANTA continued to cooperate with well-known NBA players,including Klay Thompson, Gordon Hayward, Rajon Rondo andprofessional basketball player Luis Scola, to become ANTA’sbasketball endorsers and launched a series of popularproducts

• "Hydrogen Running Shoes", Challenge202/2.0 running shoes,"ANTA X Winter Olympic Games" and other crossover productsincluding NASA, Marvel, Dragon Ball Super, OPENINGCEREMONY and STASH etc., were well-received by the publicand set the trends

• With the effective supply chain management and sustainabledevelopment practice, ANTA officially became a member ofthe Better Cotton Initiative in July and launched its A-AWAKEENERGY series "Train and Recycle"

Keep up with technology and customer preference, put sustainability into practice

ANTA KIDS

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• As the first domestic sportswear brand entering the market, ANTA KIDS

enjoys the advantage of being an "Early-entry Trailblazer" and has been

promoting the brand concept "Grow Up with Fun”

• The products of ANTA KIDS were technology-oriented. In addition to

running, soccer, basketball, outdoor and cross-training product series,

ANTA also launched crossover products with different cartoon characters

• In September, ANTA KIDS officially debuted in the 2020 New York

Fashion Week under the theme "Playmaker", becoming the first China

kidswear brand landing at New York Fashion Week

• In order to encourage kids to "Grow Up with Fun", ANTA KIDS not only

organized "Fun Sports Day", but also introduced stores 4.0, with the

theme of "WILD PARK". The stores were injected with the brand’s

exclusive DNA, with an aim of creating extremely "Fun" experience

ANTA KIDS provides sportswear products for children aged 0 to 14

FILA

• In addition to series like FILA ATHLETICS, FILA WHITE, FILA BLUE andFILA ORIGINALE, we continued to work with renowned designer,Phillip Lim, on the FILA X 3.1 Phillip Lim series

• FILA made an appearance in the Milan fashion show in Italy inSeptember again. It also held a fashion show in Shanghai for theFILA X 3.1 Phillip Lim collection in December, which gainedoverwhelming attention

• FILA launched CLASSIC KICKS, DISRUPTOR SANDALS, and FILAJAGGER series, all became hot items

• Leading the trends in high-end sportswear with collaborations withactors Huang Jingyu

• Became the exclusive and official sportswear partner of the ChinaOpen 2019-2021

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

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FILA KIDS and FILA FUSION

• FILA KIDS aiming to provide high-end apparel and footwear for

children aged 3 to 15. During the year, FILA KIDS launched WHITE

LINE and other crossover collections including FILA KIDS X

WONNIE FRIENDS, FILA KIDS X STAPLE to maintain the brand

excitement

• FILA FUSION engaged with famous Japanese model Kōki, as FILA

FUSION Brand Ambassador, marking its proper entry into the

market for youths aged 15 to 25. FILA FUSION launched crossover

collections with multiple international renowned brands,

successfully further enhanced its brand image and brand

recognition in the market

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

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DESCENTE

• With nearly three years of development, DESCENTE has been swiftto establish its position as a functional and professionalsportswear brand in China, and has been actively expanding itsretail footprint in the high-end segments of the Chinesesportswear market

• DESCENTE collaborated with internationally renowned movie starDaniel Wu and famous renowned actress Xin Zhilei

• DESCENTE became an exclusive apparel sponsor officially ofWGC-HSBC Champions, the Golf as 'Asia's Major’, obtainedextensive attention from high-end consumer groups andoverwhelming positive responses

• DESCENTE focusing on the rapidly growing winter sports market,grasping the huge potential of the winter sports market

DESCENTE focuses on high-end sportswear products, expanding its retail footprint in the high-end segments of the Chinese sportswear market

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Distribution Network Management

Continue to improve sales network to expand brand influence

Key market tiers

Store formats

*predominately

Number of stores

at 31 December 2019

2nd, 3rd and lower tier cities

1st and 2ndtier cities

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

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

10,516 1,951

1st and 2ndtier cities

1st and 2ndtier cities

136

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

185

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

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Retail Channels Optimization

• ANTA started to promote its ninth-generation stores in Chongqingand Shanghai. ANTA upgraded the stores in terms of brand image,store image and consumer experience. ANTA’s new generationstores were fueled by the core concepts of "Digitalization", " Youth"and "Professionalism"

• ANTA KIDS Stores 4.0 were also introduced, alongside the ANTAKIDS 4.0 brand new body measurement system, which helped thekids to select the most appropriate shoes based on scientific data

• By obtaining the real-time sales performance of all our retail stores,we were able to shorten delivery times and increase flexibility instock replenishment, making it easier to create a comprehensiveplan for logistics routes and thus improving overall businessperformance

• Provide customers with more comfortable and tailor-madeshopping experiences. Through attractive store designs and aunique shopping experience, they play important roles inincreasing customer traffic, so as to enhance sales and storeefficiency

The sustainability of the distribution network and the key factors of the store, namely location, space, efficiency and interior decoration, are more important than "number of

stores"

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E-commerce Business

• Launched exclusive online products, and offline seasonalproducts, also continued to generate interest by launching anumber of crossover products

• In order to attract more online consumers, we are striving tocombine popular marketing methods with channels. Duringthe year, we launched a few hundred livestreaming events,which attracted consumers to chat and buy while watchingthe demonstrations and displays, as well as live interactionbetween the anchors and fans

• Collaborated with various renowned e-commerce platforms,including Tmall, JD, Vipshop among others, to further boostthe performance of our e-commerce business

• Provided comprehensive customer services, including securepayment systems, a well-established supply chain, fast andreliable delivery services, VIP membership, and productreturn guarantees

Remarkable growth on e-commence and solidified leading position in the industry

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Supply Chain and Product Management

• Implementing a strict partner and supplier selection regime,committed to providing assistance to suppliers and partnersto enhance their governance, production and operationalstandards

• Ensure suppliers’ capabilities in R&D, productionmanagement, corporate social responsibility and qualitymanagement systems reach industry standards

• Maintaining close contact with suppliers, to share our plans,and discuss trends within the industry, get ready anytime fororder adjustment

• Strategically combined both in-house and outsourcedproduction to better respond to market conditions andchanges in consumer preferences

Applied effective supply chain management, encourage suppliers to produce more innovative products

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PROSPECTS

Fully Upgrade and Transform into Internationalization

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