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Yue Yuen Industrial 2020 1Q Results

14 May 2020

Disclaimer Yue Yuen and Pou Sheng have taken every reasonable care in preparing this presentation. However, please be reminded that the

information, materials, opinions and statements contained or referred to in this presentation are all provided on an "as is" basis.

None of the aforesaid information, materials, opinions and statements constitutes or will be viewed as investment advice or an

offer, or a solicitation, recommendation or suggestion by Yue Yuen or Pou Sheng to deal in any investment products including

securities, or other financial products and instruments.

If there is any forward-looking statements contained or referred to in this presentation, these forward-looking statements are

based on current expectations and assumptions, of which many are beyond our control. In addition, these statements are subject

to a number of risks, uncertainties and factors and if any of these risks or uncertainties materialize, or if underlying expectations

not occur or assumptions prove incorrect, actual results, performance or achievements of Yue Yuen and/or Pou Sheng may vary

materially from those described explicitly or implicitly in the relevant forward-looking statement. Neither Yue Yuen nor Pou Sheng

intends or assumes any obligation, to update or revise these forward-looking statements in light of any difference from those

anticipated.

Yue Yuen and Pou Sheng including their respective subsidiaries, associated or affiliated companies, or any of their respective

directors, employees, agents, representatives or associates accepts no liability for and shall not be responsible or liable for any

loss or damage of whatever kind or nature, directly or indirectly, arising from action taken, or not taken, in reliance on, or

resulting from access to or use of the aforesaid information, materials, opinions and statements (including forward-looking

statements, if any) contained or referred to in the presentation.

2

Retail Sales – Shoes, Apparel, Commissions from Concessionaire Sales & Others 36.0% (1Q19: 39.4%)

Company Profile Founded in 1988, and listed on the HKEX in 1992 (551.HK)

Core Businesses:

Footwear manufacturing – Predominately athletic and casual / outdoor shoes

Pou Sheng (3813.HK) – Sportswear retail & sports services in the Greater China Region

A yield play with solid performance – committed to driving return and value for shareholders

1Q20 Revenue by Business Segments

1Q20 Total Revenue US$ 1,969.5 million

* Revenue from Texas Clothing Holding Corp. (“TCHC”) Group, which was disposed on May 31, 2019

3

Soles, Components & Others

4.7% (1Q19: 4.5%)

Athletic Shoes

52.5% (1Q19: 41.0%)

Casual / Outdoor Shoes

5.3% (1Q19: 9.3%)

Sports Sandals 1.5% (1Q19: 1.5%)

Apparel Wholesale*

N/A (1Q19: 4.3%)

No. of Employees

Total: 345,200

Yue Yuen Pou Sheng

310,600

34,600

331 390 535 519

307 301

8,013 8,435 8,481

9,121

9,695 10,105

2014 2015 2016 2017 2018 2019

Profit attrib. to ownersRevenue

2019 Financial Performance Overview

Source: Company audited financial statements and management accounts * FY19 Dividend: HK$1.10/share; FY18 : HK$1.50/share 4

USD 10,105.4 mn

Profit Attrib. to Owners

Revenue

USD 300.5 mn

322.4 mn pairs

ASP (USD)

Volume

$17.24

HK $1.10 per share

Dividend Payout Ratio

Dividend*

76%

17.53 17.25 16.88 16.87

16.53 17.24

307

318

322 325

326 322

2014 2015 2016 2017 2018 2019

Avg. selling price

74% 65%

56% 61%

101%

76%

1.15 1.20

1.40 1.50 1.50

1.10

2014 2015 2016 2017 2018 2019

Payout ratio*Volume HK$ per share*

Our Growth Strategy

5

Speed

Sustainability

Flexibility

Innovation

Quality

Design

OEM / ODM

Material

Process

Equipment

Apparel

Accessories

Footwear

Retail

World’s Leading Sporting Goods

MFG Platform

Values

5

Directions

4

Segments

3

End to End Platform

2 1

Corporate Social Responsibility

6

Our Focus on Sustainability

Compliance

Education

Implementation

Communication

ESH & ESG

Risk Control

Employee Relations

The social compliance program of Pou Chen Group (comprising Pou Chen Corporation and Yue Yuen) obtained accreditation from Fair Labor Association (FLA) in June, 2018, as a result of our efforts and commitments in promoting workplace standards, responsible production as well as factory condition improvement.

The Only FLA Accredited Footwear OEM/ODM Globally

Pou Chen and Yue Yuen are constituents of world-famous Environmental, Social and Governance (ESG) indexes, including the FTSE4Good Emerging Index and the MSCI World ESG Leaders Index.

A Top-ranking Responsible Investment Target

1Q 2020

Group and Operation Highlights

Key Financial Highlights for 1Q 2020

8

Group

* TCHC Group recorded revenue of US$108.0 million, representing 4.3% to group revenue in 1Q19 and was disposed on May 31 2019 ** Compared to MFG Gross Profit Margin in 1Q19 excluding TCHC Group

Revenue

US$ 1,969.5 mn -20.6%*

Operating Loss

US$ (18.5) mn

N/A

MFG GP Margin

15.7% -2.5pp**

Shoe Volume

71.5 mn pairs

-12.5%

ASP

US$ 16.36 per pair

+4.1%

Retail Revenue

RMB 4,947 mn -25.0%

OP Margin

-0.9%

-6.3pp

Same Store Sales Growth

-32.5% -40.9pp

Loss Attrib. to Owners

US$ (56.3) mn

N/A

1,034.9

104.1

30.4

708.1

N/A

92.0

1,017.2

229.9

36.7

976.1

108.0

111.5 1Q20 1Q19

Y-o-Y Revenue by Product Category

9

(US$’ mn)

Casual/Outdoor Shoes

Sports Sandals

Athletic Shoes

88%

9% 3%

* TCHC Group (disposed on May 31, 2019) ** Soles, Components & Others

Athletic Shoes

Casual/Outdoor Shoes

Sport Sandals

Retail

Apparel Wholesale*

Others**

1.7%

54.7%

17.2%

27.5%

17.5%

1Q20 Total Revenue US$1,969.5 mn 1Q19 Total Revenue US$2,479.4 mn

1Q20 Shoe Revenue by Product Categories

Shoe Rev: US$ 1,169.4 mn (-8.9% YoY)

1Q20 Manufacturing Revenue by Destination

10

US 28.3% 1Q19: 32.1% YoY: -20.2%#

Europe 28.1% 1Q19: 28.3% YoY: -10.1%#

Mainland China 17.4%

1Q19: 14.2% YoY: +10.9%# Others*

26.1% 1Q19: 25.4%

YoY: -7.1%#

# YoY changes in revenue amount * Others include Rest of Asia, South America, Canada, Australia and Other Area

1Q20 MFG Revenue: US$ 1,261.4 mn 1Q19 MFG Revenue: US$ 1,395.3 mn

11

25% 13% 9%

42%

43% 44%

32% 41% 43%

1% 3% 4%

0%

20%

40%

60%

80%

100%

2015 2016 2017 2018 2019 1Q19 1Q20

Others

Indonesia

Vietnam

China

3.8%#

6.8%#

10.8%#

39.1%#

Shoe Volume 1Q20: 71.5 mn pairs 1Q19: 81.7 mn pairs

Shoe Volume by Region

# YoY changes in volume amount * Others include Bangladesh, Cambodia, Myanmar, etc.

-12.5%#

YY Group Financial Highlights

12

(US$’000)

1Q 2020 1Q 2019 Y-o-Y

Revenue 1,969,468 2,479,385 -20.57%

Gross Profit 415,896 624,710 -33.43%

Gross Profit Margin 21.12% 25.20% -4.08pp

Operating (Loss) Profit (18,511) 124,195 N/A

Operating (Loss) Profit Margin -0.94% 5.01% -5.95pp

(Loss) Profit attrib. to Owners (56,281) 75,494 N/A

(Loss) Profit attrib. to Owners Margin -2.86% 3.04% -5.90pp

Non-recurring (Loss) Profit attrib. to Owners (20,198) 6,245 N/A

Recurring (Loss) Profit attrib. to Owners (36,083) 69,249 N/A

Source: Company accounts Please refer to the announcement on the HKEX website for the unaudited consolidated income statements of 1Q2020 & 1Q2019 For more details, please refer to Appendix

YY Group Financial Ratios

13

Source: Company accounts (figures rounded) ^ Depreciation on rights-of-use assets (“ROUA”) was US$42.9mn and US$29.2 mn in 1Q20 and 1Q19 respectively * Total borrowings and net borrowings exclude lease liabilities. Lease liabilities was US$ 373.1 mn as at Mar 31, 2020 # Total Debt to Equity and Net Debt to Equity (including lease liabilities) would be 56.0% and 32.2% as at Mar 31, 2020 respectively

(US$’mn) 1Q 2020 1Q 2019

Depreciation & Amortization^ 134.4 116.1

EBITDA 114.2 237.7

Capital Expenditure 69.8 86.9

Product Development 48.3 51.2

31 March 2020 31 March 2019

Total Borrowings* 2,100.3 2,170.8

Net Borrowings* 1,049.7 1,240.6

Total Borrowings to Equity # 47.6% 46.5%

Net Borrowings to Equity # 23.8% 26.6%

Quick Ratio (X) 1.1 X 1.1 X

Current Ratio (X) 1.9 X 1.9 X

1Q 2020 1Q 2019

Total Borrowings to EBITDA (X) annualized 4.6 X 2.3 X

Net Borrowings to EBITDA (X) annualized 2.3 X 1.3 X

TB=2,468,277-104,876-192,588=2,170,813 NB=1,538,044-104,876-192,588=1,240,580 TB/EQ=2,170,813/4,667,676=46.5% NB/EQ=1,240,580/4,667,676=26.57% Quick Ratio=(4,683,857-1,877,834)/2,465,709=1.13 Current Ratio=4,683,857/2,465,709=1.89

TB/EBITDA=2,170,813/(237,711*4)=2,170,813/950,844=2.28 NB/EBITDA=1,240,580/950,844=1.30

982.1 1,050.6

-69.8

YY Group Sources and Uses of Fund

14

Beginning Cash Jan 1, 2020

Ending Cash Mar 31, 2020

(US$’mn)

+222.0 -18.6

Tax

Cash from Operations

Interest Borrowing

Others Net Borrowings Raised

Lease Liabilities Repayment and Interest

-42.6 -27.4 -15.7 +20.6 CAPEX

Solid Free Cash Flow of US$133.6mn

YY Group ROE & ROA Trend

15 Remark: ROE = Profit attributable to owners of the company/ (Total Equity - Minority Interests); 1Q and half year data is on LTM basis ROA = Net Profit / Total Asset; 1Q and half year data is on LTM basis

(%)

6.4 5.8

6.5 7.6

7.4 6.6

5.3

4.1

4.4

4.0

2.4

9.9

8.7

9.4

11.3 11.3 12.1

10.0

7.4

8.0

7.3

4.2

1H15 FY15 1H16 FY16 1H17 FY17 1H18 FY18 1H19 FY19 1Q20

ROA ROE

YY Group GPM Analysis

16 Remark: GPM information is YTD basis

(%)

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 1Q20

18.7 18.9 18.9 19.7 19.8 20.2 20.3 20.9 21.0 20.8 20.7 21.0

18.7 18.8 19.3 19.5 18.2 18.0 18.2 18.5

15.7

22.3 22.6 22.7 23.4 24.4 24.7 24.8 25.1 25.0 25.4 25.4 25.8 25.2 25.0 25.0 25.2 25.2 25.1 24.8 24.9

21.1

30.9 32.2 32.5

33.3 34.9 35.6 35.8 35.5

33.6 34.6 34.5 35.0

33.8 33.5 33.1 33.5 33.9 34.5 34.2 34.1

30.7

1Q 1H 9M 12M 1Q 1H 9M 12M 1Q 1H 9M 12M 1Q 1H 9M 12M 1Q 1H 9M 12M 1Q

MFG Group PS

Group excl. PS Note:

The figures in the following slides cover the core manufacturing and other operations of the consolidated entity of Yue Yuen Group, and are for analytical purposes only (prepared using the management accounts).

(US$’000) MFG only MFG+TCHC

1Q 2020 1Q 2019 Y-o-Y 1Q 2019 Y-o-Y*

Revenue 1,261,402 1,395,331 -9.60% 1,503,265 -16.09%

Gross Profit 198,178 253,666 -21.87% 294,104 -32.62%

Gross Profit Margin 15.71% 18.18% -2.47pp 19.56% -3.85pp

Operating (Loss) Profit -12,470 62,613 N/A 71,386 N/A

Operating (Loss) Profit Margin -0.99% 4.49% -5.48pp 4.75% -5.74pp

(Loss) Profit attrib. to Owners -41,551 52,396 N/A 57,836 N/A

(Loss) Profit attrib. to Owners Margin

-3.29% 3.76% -7.05% 3.85% -7.14pp

Group excl. PS Financial Highlights

18 * Compare to Group Results with TCHC Group in 1Q19 Source: Company management accounts For more details, please refer to Appendix

3.75

-3.29

Manufacturing – Net Profit Margin

19

-2.47

-1.37

1Q19 Net Profit Margin

+0.75

+0.27

-3.10

+1.05

1Q20 Net Profit Margin

Hedging Fair Value & Realized

Other Income & Expenses FX Gain

Others

(%)

Material, Labor & Overhead

SG&A exclude Factory Adjustment

Gains from Disposal of A&JV

Share of results of A&JV

+0.21 Factory Adjustment

-2.38

COVID-19 Impact Operating Deleveraging & Capacity Adjustment

Supply Chain disruption

Manufacturing – COGS Decomposition and Y-o-Y

20

Factory Temporary Closure • Government lockdown • Social distancing

COVID-19 Impact

Deleveraging • L+OH up 3.9 pp & GPM dropped 2.5pp

Low Utilization • Total utilization : 79% • China utilization: 69%

Shipment Delays • Shoe volume was 71.5mn

pairs, dropped 12.5%

* Cost of labor includes cost of direct labor and indirect labor

Amount (Y-o-Y)

Labor*

4.7%

13.2%

Overhead

1Q20 1Q19

% of Revenue % of Revenue

21.9%

14.8%

Material

Gross Profit

15.4% 14.5%

30.3% 35.1%

36.1% 34.7%

18.2% 15.7%

Manufacturing - GP Margin Trend

21

(%)

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

19.7% 20.9% 21.0% 19.5% 18.5%

* TCHC became subsidiary of the Group on April 7, 2017 and was then disposed on May 31, 2019

GP Margin % - Group excl. PS (including MFG and TCHC*)

2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

21.6 21.6 22.7 20.1 19.9 21.4 21.3 19.6 18.7

18.7

19.1

18.9

21.9

19.8

20.5 20.5

22.8

21.0 20.7 20.4

21.8

18.7

18.9

20.2 20.3

18.2 17.9

18.5 19.2

15.7

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20

Gross Profit Margin (MFG only)

Manufacturing - OP Margin Trend

22

(%)

* TCHC became subsidiary of the Group on April 7, 2017 and was then disposed on May 31, 2019

OP Margin % - Group excl. PS (including MFG and TCHC*)

2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

7.1 8.0 8.4 6.0 4.7 5.2 6.5 4.7 3.7

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

5.5% 7.6% 7.7% 5.5% 4.1%

5.3

6.1

3.7

6.8

5.9

7.5

6.7

9.8

6.9

7.2 7.8

8.6

5.7 4.8 4.8

6.7

4.5 3.6 3.6

4.6

-1.0


Operating Profit Margin (MFG only)

Group excl. PS Financial Ratios

23

MFG only MFG+TCHC

(US$’mn) 1Q 2020 1Q 2019 1Q 2019

Depreciation & Amortization 69.9 67.6 71.5

EBITDA 56.0 127.8 140.5

Capital Expenditure 60.3 74.0 75.2

31 Mar 2020 31 Mar 2019 31 Mar 2019

Total Borrowings* 1,578.1 1,592.8 1,707.7

Net Borrowings* 765.0 765.3 877.2

Total Borrowings to Equity # 43.4% 42.2% 44.1%

Net Borrowings to Equity # 21.0% 20.3% 22.6%

1Q 2020 1Q 2019 1Q 2019

Total Borrowings to EBITDA (X) annualized 7.0 X 3.1 X 3.0 X

Net Borrowings to EBITDA (X) annualized 3.4 X 1.5 X 1.6 X

Return on Owner’s Equity LTM 3.4% 5.7% 6.0%

Return on Asset LTM 1.9% 3.3% 3.4%

Source: Company management accounts (figures rounded) * Total borrowings and net borrowings exclude lease liabilities. Lease liabilities was US$ 12.5mn as at Mar 31, 2020 # Total Debt to Equity and Net Debt to Equity (including lease liabilities) would be 43.7% and 21.4% as at Mar 31, 2020 respectively

TB=1,745,931-10,654-

27,604=1,707,673 TB=1,606,528-2,442-

11,296=1,592,790 NB=915,433-10,654-

27,604=877,175 NB=779,076-2,442-

11,296=765,338 TB/Equity=1,707,673/3,874,32

8=44.07% TB/Equity=1,592,790/3,774,77

6=42.19% NB/Equity=877,175/3,874,328=

22.64% NB/Equity=765,338/3,774,776=

20.27%

TB/EBITDA=1,707.7/(140.5*4)=1,707.7/562=3.03

TB/EBITDA=1,592.8/(127.8*4)=1,592.8/511.2=3.11

NB/EBITDA=877.2/562=1.56 NB/EBITDA=765.3/511.2=1.49

Working Capital Days

Manufacturing Operation Efficiency

Trade Receivable Days

Inventory Days

Trade Payable Days

24 1Q19 1Q19

55

57

31

81

50

57

29

78

FY19 1Q20

64

59

33

90

Pou Sheng International Note:

The figures in the following slides are based on Pou Sheng’s management accounts and announcements, and Pou Sheng adopts RMB as its

reporting currency

Agenda

01 Financial Highlights p28-32

02 Business Update – Brick & Mortar p34-37

03 Business Update – Omni-channel p39-41

04 Summary and Outlook p43-44

Distinguished Partners and Sports Services

27

VISION MAKE SPORTS YOUR LIFE!

Products Sports Events Sports Services

Pou Sheng Financial Highlights

28

RMB'mn US$'000

1Q 2020 1Q 2019 Y-o-Y 1Q 2020 1Q 2019 Y-o-Y

Revenue 4,947 6,597 -25.01% 708,066 976,120 -27.46%

Gross Profit 1,521 2,234 -31.92% 217,718 330,606 -34.15%

Gross Profit Margin 30.75% 33.87% -3.12pp 30.75% 33.87% -3.12pp

SG&A (1,635) (1,953) -16.28% (233,742) (288,282) -18.92%

Operating (Loss) Profit (44) 356 N/A (6,326) 52,637 N/A

Operating (Loss) Profit Margin -0.89% 5.39% -6.28pp -0.89% 5.39% -6.28pp

(Loss) Profit attrib. to Owners of PS (165) 192 N/A (23,685) 28,390 N/A

(Loss) Profit attrib. to Owners Margin -3.34% 2.91% -6.25pp -3.34% 2.91% -6.25pp

Source: Based on Pou Sheng’s announcement on the HKEX website for the unaudited consolidated income statements of 1Q2020 & 1Q2019 For more details, please refer to Appendix

Pou Sheng GP Margin Trend

29

(%)

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

33.3% 35.5% 35.0% 33.5% 34.1%

30.9

33.4

33.2

35.8

34.9

36.3

36.2

34.8

33.6

35.6

34.5

36.3

33.8 33.3

32.2

34.6

33.9

35.2

33.5

33.9

30.7


Gross Profit Margin

Pou Sheng OP Margin Trend

30 * The figures have been restated due to the application of merger accounting

(%)

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

4.1% 5.7% 4.1% 4.3% 5.4%

3.5

5.8

4.3

2.9

6.6 7.2

5.5

3.5

4.5

6.1

2.9 2.8

4.6 4.9

3.0

4.5 5.4

6.2

4.9

5.2

-0.9

1Q15*2Q15*3Q15*4Q15* 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20

Operating Profit Margin

Pou Sheng Financial Ratios (in RMB)

31

(RMB’mn) 1Q 2020 1Q 2019

Depreciation of PPE & Amortization 163.0 131.0

Depreciation of ROUA 287.8 170.3

EBITDA 392.0 660.9

EBITDA minus Depreciation of ROUA 104.2 490.6

Capital Expenditure 66.4 78.7

31 March 2020 31 March 2019

Total Borrowings* 3,704 3,181

Total Borrowings to Equity # 49.1% 43.9%

1Q 2020 1Q 2019

Total Borrowings to EBITDA (X) annualized 2.4 X 1.2 X

Return on Owner’s Equity LTM 6.4% 8.4%

Return on Asset LTM 3.1% 4.0%

Source: Internal analysis report (figures rounded) * Total Borrowings exclude lease liabilities. Lease liabilities were RMB 2,557.5 mn and 1,743.1 mn as at Mar 31, 2020 and Mar 31, 2019 respectively. # Total Debt to Equity (including lease liabilities) would be 83.0% (1Q2019: 68.0%) as at Mar 31, 2020.

Working Capital Days

Operation Efficiency

32

Trade Receivable Days

Inventory Days

Trade Payable Days

Based on RMB

1Q19 1Q19

144

24

18

150

150

21

15

156

FY19 1Q20

192

25

17

200

* Calculation of inventory days and working capital days are based on annualized figures

* *

Agenda





1Q19 1Q20

B2B B2C

Pou Sheng Retail Strategy

7

84%

16%

1Q20 Revenue by Channel Mix

Pou Sheng is one of the largest retailers and sports services providers for world renowned sportswear brands in the Greater China region

Brick & Mortar Retail Omni-channel

• Mono-Brands Stores: 5,796 stores

• Multi-Brands Stores: 86 stores

B2C Channel: • 3rd party platforms: T-Mall, JD,

Vipshop, etc. • WeChat stores (+ExP services) • Shopping mall platforms

34

Directly Operated Stores:

1Q19 1Q20

Directly Operated Stores Sub-Distributors

78% 79%

22%

21%

72%

28%

81%

19%

Pou Sheng Store Performance

35

Total store

Number of Stores

Directly Operated (Own-Store)

Sub-Distributor (Franchisee)

As at March 31, 2020 As at December 31, 2019 Net New Store +/(-)

5,883 1 5,882

3,950 90 3,860

9,833 -91 9,742

Pou Sheng Retail Coverage PS retail channel covers more than 300 cities in the Greater China

> 300 stores 100- 300 stores <100 stores

36

Pou Sheng Same Store Sales Growth (SSSg)

37

(%)

FY 2017 FY 2018 FY 2019

5.3% 7.4% 5.0%

1.9% 5.6%

1.5%

12.0%

10.1% 2.2%

8.9%

8.7% 8.4% 4.2%

6.0%

1.9%

-32.5%

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20

Same Store Sales Growth

Agenda





Pou Sheng Product Sharing Platform (PSP) Logistics of omni-channel will be facilitated through all-rounded channels: RDC, YYsports.com, 3rd party online platform, 27-Zone inventory sharing and Direct B&M

12.12

YY Sports app

YY Sports app

6.18 11.11

365-day O2O, earlier sales, higher price, via PSP

Products

RDC: Regional Distribution Center Direct B&M : Directly operated Brick and Mortar Stores 39

3rd party platforms ExP services WeChat stores

PSP

B&M1 …..

B&Mn

Warehouse 1,2,3,4

Pou Sheng Product Sharing Platform (PSP) Participation rate: more than 60% Direct B&M stores participate PSP at 1Q2020

40

PSP Contribution - Top 6 Regions

Participating PSP Regions Regional Warehouse

Taicang

Kunshan

Dongguan

New Service Hub to Enhance Omni-channel Capability

“Omni Contacts” “Convenient”+“FUN” “Attractive Sport Packages”

ExP Collection Grow Your ExP

Offline

Online

Mono Brand Stores

Next Store

28% 27% 29% 33% 31%

28% 27% 26% 27% 29%

13.9% 12.3% 12.3% 14.0% 12.9% 11.7% 10.9% 9.5% 9.1% 8.7%

307 294 291 293 280 301 308 356

347 337

26-Apr 27-Apr 28-Apr 29-Apr 30-Apr 1-May 2-May 3-May 4-May 5-May

L2 TTL CR%

L2 Merchandise CR%

L2 Traffic

1+364 ExP+

1,816 1,859 1,911 1,974 2,076

2,515 2,797 2,853 2,960 3,068 4.4% 4.4% 4.5% 4.5% 4.4%

3.9% 4.0% 4.3%

4.5% 4.5%

26-Apr 27-Apr 28-Apr 29-Apr 30-Apr 1-May 2-May 3-May 4-May 5-May

L3 Merchandise CR%

L3 Traffic

41

Agenda





Pou Sheng Contingency Plans and Accelerated New Initiatives During COVID-19

43

• Timely cash inflow by shipment cuts, inventory takeback, effective promotions

• Cost saving by government subsidies, rental negotiations, SG&A cuts

• Extended cash outflow by extended payments to brands, delayed CAPEX

Contingency Plans

• Accelerated growth via “Product Sharing Platform”

• Effective new channel by WeChat stores

• Initial operating results of Sports Services Store in line with expectations

New Initiatives

Future Target: Profitable Growth Future Target

• Total revenue growth in mid-teens, with omni-channel contributing 20% of total revenue • More in-season sales and more effective off-season products sales through various 3rd party channels • Integrating the Service Hub model into our strong brick and mortar stores foundation • Turnaround of emerging brands and licensee brands • Operating margin improving by 2 percentage points

“Creating Value-added Services and Quality Experiences to Customers”

44 Retail Network

Omni-Channel

Next

Store

Appendix

Shareholding Structure

46

Pou Chen (9904.TT)

Yue Yuen Industrial (Holdings) Ltd. (551.HK)

62.19%

51.11%

* As at March 31, 2020

100%

Manufacturing and Others Pou Sheng (3813.HK)

Company Milestones

47 Started first overseas production in south China

Established production bases in Vietnam

Established production bases in Mexico

Established production bases in eastern and inland China

Began operations at the new headquarters in Taichung, Taiwan

Established production bases in Bangladesh & Cambodia

Established production bases in Myanmar

1988

1992

1994

1998

2001 2002

2006

2008 2009

2014 2015

Expanded into retail business in China Became sole licensee for Hush Puppies in Taiwan

Pou Sheng International listed on HKEX (3813.HK)

Became sole licensee for Pony in Taiwan & China

2012 Ms. Tsai Pei Chun, Patty appointed as CEO of Pou Chen Group

Yue Yuen Industrial listed on HKEX (551.HK) Established production bases in Indonesia

Yue Yuen Industrial founded

2019

Parent Pou Chen Group is accredited by FLA 2018 Parent Pou Chen Group’s 50th Anniversary

Recorded RMB 22 bn revenue. Sales channels over 9,000

Omni-channel contributed ~12% of total sales in 2019

Became sole licensee for Rockport footwear and GEOX in China

2016

Revenue crossed the US$10 bn mark

Yue Yuen

Pou Sheng

1Q19 1Q20

976.12

1,503.27

708.07

1,261.40

2,479.39

1,969.47

1Q19 1Q20

Revenue & Profit Attributable to Owners

48

Revenue In US$’mn

Profit Attrib. to Owners In US$’mn

Pou Sheng

Group excl. PS

The above figures of Pou Sheng exclude profit attributable to “Non-YY” shareholders (i.e. 1Q20: 37.8% minority interests; 1Q19: 37.8% minority interests)

Pou Sheng

Group excl. PS

-20.6%

-27.5%

-16.1%

17.66

57.83

(14.73)

(41.55)

75.49

(56.28)

YY Group Financial Highlights

49 Source: Company accounts Please refer to the announcement on the HKEX website for the unaudited consolidated income statements of 1Q2020 & 1Q2019

1Q 2020 1Q 2019 Y-o-Y

US$'000 % US$'000 % + / -

Revenue 1,969,468 100.00 2,479,385 100.00 -20.57%

Cost of Sales (1,553,572) -78.88 (1,854,675) -74.80 -16.23%

Gross Profit 415,896 21.12 624,710 25.20 -33.43%

SG&A (419,155) -21.28 (472,802) -19.07 -11.35%

Other Income & Expenses, net (15,252) -0.78 (27,713) -1.12 -44.96%

Operating (Loss) Profit (18,511) -0.94 124,195 5.01 N/A

Finance Cost (20,721) -1.05 (24,526) -0.99 -15.51%

Share of Results of A&JV 4,900 0.25 4,710 0.19 +4.03%

Other Gains and Losses (20,198) -1.03 6,245 0.25 N/A

Income Tax (10,763) -0.55 (22,550) -0.91 -52.27%

(Loss) Profit for the Period (65,293) -3.32 88,074 3.55 N/A

(Loss) Profit attrib. to Owners (56,281) -2.86 75,494 3.04 N/A

Group excl. PS Financial Highlights – MFG and TCHC

50 * Compare to Group Results with TCHC Group in 1Q19 Source: Company management accounts

1Q 2020 1Q 2019 Y-o-Y*

US$'000 % US$'000 % + / -

Revenue 1,261,402 100.00 1,503,265 100.00 -16.09%

Cost of Sales (1,063,224) -84.29 (1,209,161) -80.44 -12.07%

Gross Profit 198,178 15.71 294,104 19.56 -32.62%

SG&A (185,413) -14.70 (184,520) -12.27 +0.48%



Finance Cost (10,929) -0.87 (15,924) -1.07 -31.37%



Income Tax (5,124) -0.41 (8,296) -0.55 -38.24%



Group excl. PS Financial Highlights – MFG only

51 Source: Company management accounts

1Q 2020 1Q 2019 Y-o-Y

US$'000 % US$'000 % + / -

Revenue 1,261,402 100.00 1,395,331 100.00 -9.60%

Cost of Sales (1,063,224) -84.29 (1,141,665) -81.82 -6.87%

Gross Profit 198,178 15.71 253,666 18.18 -21.87%

SG&A (185,413) -14.70 (152,730) -10.94 +21.40%



Finance Cost (10,929) -0.87 (14,510) -1.04 -24.68%



Income Tax (5,124) -0.41 (6,377) -0.46 -19.65%



Group excl. PS Financial Highlights – MFG only

52 Source: Company management accounts

FY 2019 FY 2018 Y-o-Y

US$'000 % US$'000 % + / -

Revenue 6,000,573 100.00 5,881,494 100.00 +2.02%

Cost of Sales (4,893,539) -81.55 (4,732,467) -80.46 +3.40%

Gross Profit 1,107,034 18.45 1,149,027 19.54 -3.65%

SG&A (674,076) -11.23 (658,261) -11.19 +2.40%

Other Income & Expenses, net (188,398) -3.14 (167,405) -2.85 +12.54%

Operating Profit 244,560 4.08 323,361 5.50 -24.37%

Finance Cost (53,894) -0.90 (52,670) -0.89 +2.32%


Other Gains and Losses 19,273 0.32 (17,956) -0.31 N/A

Income Tax (46,066) -0.77 (51,866) -0.88 -11.18%

Profit for the Period 215,710 3.59 240,489 4.09 -10.30%

Profit attrib. to Owners 215,562 3.59 240,038 4.08 -10.20%

Pou Sheng Financial Highlights (in RMB)

53

1Q 2020 1Q 2019 Y-o-Y

RMB’mn % RMB’mn % + / -

Revenue 4,947 100.00 6,597 100.00 -25.01%

Cost of Sales (3,426) -69.25 (4,363) -66.13 -21.48%

Gross Profit 1,521 30.75 2,234 33.87 -31.92%

SG&A (1,635) -33.05 (1,953) -29.62 -16.28%

Other Income & Expenses, net 70 1.41 75 1.14 -6.67%

Operating (Loss) Profit (44) -0.89 356 5.39 N/A

Finance Cost, net* (67) -1.35 (57) -0.86 +17.54%

Share of Results of JV (17) -0.34 2 0.04 N/A

Income Tax (39) -0.79 (96) -1.46 -59.38%

(Loss) Profit for the Period (167) -3.37 205 3.11 N/A

(Loss) Profit Attrib. to Owners of PS (165) -3.34 192 2.91 N/A

Source: Based on Pou Sheng’s announcement on the HKEX website for the unaudited consolidated income statements of 1Q2020 & 1Q2019 * Finance Cost in 1Q20 grew by 17.5% due to the increase of interest expense on lease liability (1Q20: 30.9 mn 1Q19: 19.9 mn)

SG&A 1,635,532=1,635mn

Finance Cost 66,422=67mn -67/4,947=-1.354%=-1.35% Share of Results of JV=16,522=17mn -17/4,947=-0.343%=-0.34% Income Tax 39,400=39mn -39/4,947=-0.788% -167/4,947=-3.375=-3.37% 配合USD -165/4,947=-3.335%=-3.34%

Pou Sheng Financial Highlights (in USD)

54

1Q 2020 1Q 2019 Y-o-Y

US$’000 % US$’000 % + / -

Revenue 708,066 100.00 976,120 100.00 -27.46%

Cost of Sales (490,348) -69.25 (645,514) -66.13 -24.04%

Gross Profit 217,718 30.75 330,606 33.87 -34.15%

SG&A (233,742) -33.01 (288,282) -29.54 -18.92%

Other Income & Expenses, net 9,698 1.37 10,313 1.06 -5.96%


Finance Cost, net* (9,507) -1.35 (8,430) -0.86 +12.78%

Share of Results of JV (2,365) -0.33 396 0.04 N/A

Income Tax (5,639) -0.80 (14,254) -1.46 -60.44%


(Loss) Profit Attrib. to Owners of PS (23,685) -3.34 28,390 2.91 N/A

Source: Internal analysis report (figures rounded); various accounting reclassification and adjustments are made to some of the figures when consolidating Pou Sheng numbers into the Yue Yuen Group in order to comply with the requirements of accounting standards * Finance Cost in 1Q20 grew by 12.8% due to the increase of interest expense on lease liability (1Q20: 9.8 mn 1Q19:8.6 mn )

9,507/708,068=1.342% =1.35%

-23,685/708,068=-3.345% =-3.34% 配合RMB

Pou Sheng Financial Highlights (in RMB)

55

FY 2019 FY 2018 Y-o-Y

RMB’mn % RMB’mn % + / -

Revenue 27,190 100.00 22,677 100.00 +19.90%

Cost of Sales (17,915) -65.89 (15,078) -66.49 +18.81%

Gross Profit 9,275 34.11 7,599 33.51 +22.06%

SG&A (8,181) -30.09 (6,913) -30.49 +18.34%

Other Income & Expenses, net 377 1.39 281 1.24 +34.16%

Operating Profit 1,472 5.41 967 4.26 +52.22%

Finance Cost, net* (239) -0.88 (144) -0.64 +65.97%

Share of Results of JV 1 0.01 (1) -0.00 N/A

Other Losses (9) -0.03 - N/A N/A

Income Tax (345) -1.27 (261) -1.15 +32.18%

Profit for the Year 880 3.24 561 2.47 +56.86%

Profit Attrib. to Owners of PS 833 3.06 543 2.39 +53.41%

Source: Based on Pou Sheng’s announcement on the HKEX website for the audited consolidated income statements of FY2019 & FY2018 * Finance Cost in FY19 grew by 66.0% due largely to the RMB 101.1 mn effects of the application of HKFRS16

Pou Sheng Financial Highlights (in USD)

56

FY 2019 FY 2018 Y-o-Y

US$’000 % US$’000 % + / -

Revenue 3,932,965 100.00 3,421,657 100.00 +14.94%

Cost of Sales (2,591,280) -65.89 (2,275,156) -66.49 +13.89%

Gross Profit 1,341,685 34.11 1,146,501 33.51 +17.02%

SG&A (1,178,146) -29.96 (1,038,884) -30.37 +13.40%

Other Income & Expenses, net 49,397 1.26 38,270 1.12 +29.07%

Operating Profit 212,936 5.41 145,887 4.26 +45.96%

Finance Cost, net* (34,598) -0.88 (21,665) -0.64 +59.70%

Share of Results of JV 158 0.01 (140) -0.00 N/A

Other Losses (1,378) -0.03 - N/A N/A

Income Tax (49,840) -1.27 (39,452) -1.15 +26.33%

Profit for the Year 127,278 3.24 84,630 2.47 +50.39%

Profit Attrib. to Owners of PS 120,533 3.06 81,913 2.39 +47.15%

Source: Internal analysis report (figures rounded); various accounting reclassification and adjustments are made to some of the figures when consolidating Pou Sheng numbers into the Yue Yuen Group in order to comply with the requirements of accounting standards * Finance Cost in FY19 grew by 59.7% due largely to the US$14.6 mn effects of the application of HKFRS16

Thank you

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