ANTA Sports, Partner Of Descent And Fila In China Delivers Record High Revenue Of RMB16.69 Billion

ANTA Sports Products Limited ("ANTA Sports" or the "Company") (HongKong: 2020.HK) (and its subsidiaries collectively the "Group"), a leading sportswear company in China, is pleased to announce its annual results for the year ended 31 December 2017 (the "year").

Financial Highlights

• Record-breaking Revenue and Earnings
• 25.1% increase in revenue to RMB16.69 billion
• 29.4% increase in profit attributable to equity shareholders to RMB3.09 billion
• 22.7% increase in basic earnings per share to RMB117.01 cents
• Solid Profitability
• Gross profit margin increased by 1.0p.p. to 49.4%
• Operating profit margin and margin of profit attributable to equity shareholders stood at 23.9% and 18.5% respectively
• Strong Retail Sales from Brands
• Retail sales (based on retail value) of ANTA branded products and other branded products (excluding brands newly joined to the Group since 1 October 2016) in fourth quarter of 2017 increased by 20%-25% and 85%-90% year-on-year respectively, which sustained their leading position in the industry
• Adequate Cash
• Free cash inflow increased by 40.3% to RMB2.66 billion
• Net cash position stood at RMB9.41 billion
• Attractive Dividend Payout
• Total dividends of HK98 cents per ordinary share, an increase of 28.9% with a payout ratio of 70.5%

Operational Highlights for the Year

FILA and FILA KIDS

FILA was established in Italy in 1910s. After acquired the Fila business in the PRC in late 2009, FILA is positioned as a high-end sports fashion clothing brand in China. As a global brand with over 100 years of history, the unique combination of stylish and sporty image from FILA has gained awareness among the Chinese high-end consumers. FILA also has cross-over cooperation with world-renowned designers to bring differentiated sports fashion experiences to the consumers. Echoing FILA’s high-end positioning, FILA stores are mainly located in first- and second-tier cities. By the end of 2016, the number of FILA stores (including FILA KIDS standalone stores) stood at 869 in China, Hong Kong, Macao and Singapore.

• FILA's unique combination of stylish and sporty fashion has gained awareness among Chinese high-end consumers.
• Different crossover series, including the FILA Ginny collection, Jason Wu x FILA, Staple x FILA and b+ab x FILA, have not only expanded product portfolio, but also received remarkably positive responses from customers.
• FILA KIDS launched in China in 2015 with the aim of providing high-end apparel and footwear for children aged 7 to 12. The FILA KIDS collection has gained appeal among consumers and has continued to grow, inheriting the elegant and unique style of the FILA brand.

As part of its specialization strategy, FILA has launched several initiatives, including an omni-touchpoint marketing campaign, fusion stores that appeal to younger consumers, several cross-over branding collaborations, and product placements as well as a membership system. All of the above have significantly increased the reputation of the FILA brand throughout China.

DESCENTE

Descente was established in Japan in 1930s. The brand is well-known for its professional ski sports gear. The company formed a joint venture with Descente Japan and ITOCHU, etc, in the first half of 2016 to operate and engage in the business of design, sourcing, marketing, sale and distribution of all categories of products bearing the Descente trademarks in China on an exclusive basis. High-end sportswear (including ‘ski’, ‘training’, ‘running’ and other categories) is Descente's target market in China.

• DESCENTE provides high-end sportswear products for skiing, cross-training and running. In addition to the above collections, DESCENTE also expanded to Allterrain and summer premium sports lifestyle options for men and women.
• DESCENTE has capitalized on its specialty and quality sportswear, and has quickly established its brand position as a premium and professional sports brand in China.
• DESCENTE launched its "AWAKEN!" campaign at a brand show with the aim of raising awareness of the brand among its target audiences in China.

As at 31 December 2017, there were a total of 64 DESCENTE stores in China.

ANTA and ANTA KIDS

ANTA was ranked 35th in the "World's Top 50 Most Valuable Apparel Brands 2017 by Brand Finance", the only Chinese sportswear brand to be named. ANTA was also ranked as one of "Brandz Top 100 Most Valuable Chinese Brands", proving the appeal of its brand.

ANTA renewed partnership with the COC and CSD for two Olympic cycles, and became the official sportswear partner for the Beijing 2022 Olympic and Paralympic Winter Games, during which ANTA will provide high quality sportswear products. The Group will take the opportunity to help promote the positive image of China to the world.

ANTA's KT2 and KT3 basketball shoes attracted attention from both sneaker lovers and basketball fans, and during Klay Thompson's China tour, ANTA launched the "Shock The Game" campaign, which fully utilized both online and offline channels to create brand awareness and deliver sales growth. Posts related to "Shock The Game" garnered over 77 million views on Sina Weibo and attracted live audiences of over 30 million globally via video streams, which reinforced ANTA's leading brand position.

ANTA KIDS has chosen "Grow Up with Fun" as its slogan. During the year, ANTA KIDS launched a series of crossover collection products, featuring popular characters from movie series such as Minions, Hello Kitty and Despicable Me, which have been overwhelmingly popular among children aged 0 to 14.

As at 31 December 2017, the total number of ANTA stores (including ANTA KIDS standalone stores) in China stood at 9,467.

SPRANDI

SPRANDI is a footwear and clothing brand in the fields of sports, outdoor and lifestyle products, as well as a focus on city running products in China.

A renowned Chinese celebrity, Olivia Wang, became a SPRANDI endorser and was featured in advertising campaigns in China.

E-Commerce

In addition to the official online flagship store, ANTA has collaborated with various renowned e-commerce platforms, including Tmall, JD, Vipshop and others, to further boost the performance of e-commerce business.

They have allowed some outstanding offline distributors to sell ANTA products online to maximize the mutual benefits between web-based and brick-and-mortar stores.

They also optimized the e-store interface, improved product descriptions and presentations, and enhanced product search and cataloging functions to attract more online shoppers.

Their "Single-Focus, Multi-Brand and Omni-Channel" operation model has enabled ANTA to position the ANTA brand across the mass market to high-end market spectrum, with products catering for professional sports and popular sports, high-end athleisure to urban stride, as well as outdoor frontiers, all of which have ensured the Group caters for every consumer's requirements.

With a consumer-centric and retail-oriented strategy, they have continued to improve their retailers' competitiveness, store efficiency and responsiveness to the ever-changing market. They emphasized retail efficiency in their corporate culture and values, and have established a consumer-oriented retail management appraisal system to measure their performance according to retail operating data.

They have also further improved their supply chain to shorten production lead times, allowing them to capture consumer demand in a timely manner. During the year, they implemented high-speed production lines, which have a daily shoe manufacturing capacity of 3,000 pairs with only 30 workers. This innovative production line has increased productivity and saved on labor costs.

Ding Shizhong, Chairman and CEO of ANTA Sports, commented, "Last year marked the 10th anniversary since we were listed in Hong Kong in 2007 and was a year of strategic transformation for ANTA from a traditional private company into an internationally competitive listed corporation with modern governance standards. Our "Single-Focus, Multi-Brand, and Omni-Channel" strategy has laid a solid and sound foundation. However, we are not satisfied with only being a leading multi-brand company in China. Through our multi-brand strategy, we aspire to become a competitive global multi-brand company with newly added brands including KINGKOW and KOLON SPORT. To that end, we are launching our globalization strategy in 2018. Through product innovation and R&D investment, we hope athletes will fight for glory in our sportswear and that the public will break through their limits with our products. We will tap into the global market with our best brands."

He continued, "In the future, we will continue our focus on the sportswear industry. Aside from existing brands, we will continue to seek high-end international sportswear brands with strong growth potentials to meet the sportswear needs of our customers and to fill the gaps between different market segments. Meanwhile, we will continue to improve our product differentiation and increase our market share in the running, boxing, basketball, female fitness, cross-training and skiing sports segments."

The ANTA brand was established in 1991, while ANTA Sports Products Limited (HongKong: 2020.HK), a leading sportswear company in China, was listed on the Main Board of Hong Kong Stock Exchange in 2007. For many years, they have been principally engaging in the design, development, manufacturing and marketing of ANTA sportswear series to provide the mass market with professional sporting products including footwear, apparel and accessories. In recent years, they have started moving full steam ahead on the strategy of "Single-Focus, Multi-Brand, and Omni-Channel" to deepen their footprint in the sportswear market in China. By embracing an all-round brand portfolio including ANTA, ANTA KIDS, FILA, FILA KIDS, DESCENTE, SPRANDI, KINGKOW, KOLON SPORT and NBA, and by seizing every opportunity arising in various important retail channels, they aim to unlock the potential of both the mass and high-end sportswear markets in China.