Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 0.8, representing a potential upside of 19.4% from the current price of HKD 0.67 [1][2][10]. Core Insights - The company is expected to see an improvement in profit margins in 2024 driven by better channel structure and retail discount stability, despite a challenging demand environment [1]. - The focus for 2024 will be on stabilizing retail discounts and improving profit margins, with a target of maintaining overall revenue flat while achieving a 1 percentage point increase in both gross and operating profit margins [1]. - The company aims for a long-term operating profit margin expansion of 1 percentage point annually, targeting a 7% margin by 2026 [1]. Financial Performance Summary - **Revenue Forecast**: The company’s revenue is projected to decline slightly by 1% in 2024, following an 8% increase in 2023 [2][5]. - **Net Profit**: The net profit is expected to increase by 28% in 2024, reaching RMB 626 million, following a significant recovery from a low base in 2023 [2][5]. - **Profitability Ratios**: The operating profit margin is forecasted to expand to 4.2% in 2024, up from 3.7% in 2023, with a long-term goal of 5% by 2026 [5][7]. - **Valuation Metrics**: The company is trading at a P/E ratio of 5.1 for 2024, indicating a relatively low valuation compared to historical levels [2][5]. Channel and Inventory Management - The company has successfully reduced inventory levels to a healthier state, which is expected to positively impact gross margins in 2024 [1]. - There has been a shift towards improving the channel structure, with a decrease in the wholesale and B2B channel revenue contribution, while B2C sales are anticipated to grow [1]. Store Performance - The company closed 570 stores in 2023, resulting in a 14% reduction in the number of direct-operated stores, but managed to achieve a 1% revenue growth in these stores, indicating improved single-store performance [1][6]. - The performance of existing stores will be crucial in determining whether the company can exceed its revenue targets for 2024 [1].

交银国际研究 公司更新 消费 收盘价 目标价 潜在涨幅 2024年3月15日 港元0.67 港元1.46 +117.9% 宝胜国际 (3813 HK) 价值被大幅低估；净现金占市值的 90%，并宣布恢复派息  2023 年业绩与正面盈利预告相符：2023 年销售额同比增长 7.7%至 200.64 亿 个股评级 元人民币，净利润同比增长 450%至 4.90 亿元人民币，净利润率扩大至 2.4% 买入 （2022 年为 0.5%）。2023 年第 4 季度销售额从-20%的低基数上同比增长 8.9%，净利率提高至 2.4%（2022年同期为-0.2%），净利润为 1.13 亿元人民 币。 1年股价表现  阿迪达斯业绩解读的正面投资启示： 阿迪达斯 2023 财年业绩（同日发布） 3813 HK 恒生指数 对宝胜是正面的：1）对中国市场信心增强： 阿迪达斯集团 2023 年在中国的 20% 15% 销售额增长了 8%（阿迪达斯品牌增长了 14%），称其中国管理团队 "信心持 10% 续增加"，并"干劲十足"，正在恢复所有营销活动，并在2024年售卖新任首 5% 0% 席执行官上台后令人振奋的新产品；2）中国 ...

Financial Performance - For the fiscal year ended December 31, 2023, the total revenue reached RMB 20,064,497 thousand, representing a 7.7% increase from RMB 18,638,021 thousand in 2022[2] - The operating profit surged by 77.5% to RMB 735,861 thousand, compared to RMB 414,530 thousand in the previous year[2] - The profit attributable to the owners of the company increased significantly by 450.0% to RMB 490,425 thousand, up from RMB 89,164 thousand in 2022[2] - The basic earnings per share rose to RMB 9.47, a remarkable increase of 450.6% from RMB 1.72 in the prior year[2] - Total comprehensive income for the year amounted to RMB 502,102 thousand, compared to RMB 97,293 thousand in 2022[5] - The company achieved a significant increase in net profit attributable to shareholders, rising 450.0% to RMB 490.4 million[36] - The gross profit for 2023 was RMB 6,756.0 million, with a gross margin of 33.7%, down 2.2 percentage points from 35.9% in 2022[39] - The operating profit increased by 77.5% to RMB 735.9 million, with an operating margin of 3.7%, up 1.5 percentage points year-on-year[41] - The company recorded a net profit of RMB 503.2 million in 2023, a significant increase of 402.0% compared to the fiscal year 2022[43] Cash and Assets - Cash and cash equivalents increased by 53.6% to RMB 1,827,563 thousand, compared to RMB 1,190,148 thousand in 2022[2] - The net asset value increased to RMB 8,610,581 thousand, up from RMB 8,193,920 thousand in the previous year[7] - As of December 31, 2023, the company's cash and bank balances reached RMB 2,874.2 million, up from RMB 1,190.1 million in 2022, while total bank borrowings decreased by 91.4% to RMB 39.2 million[45] - The net cash level increased significantly to RMB 2,835.0 million in 2023, compared to RMB 734.0 million in 2022[45] Dividends and Shareholder Information - The company proposed a final dividend of HKD 0.0120 per share, with an interim dividend of HKD 0.0185 per share declared earlier[2] - The company declared an interim dividend of HKD 0.0185 per share for 2023, compared to HKD 0.016 per share in 2022, reflecting an increase of about 9.38%[20] - The company proposed a final dividend of HKD 0.0120 per share for the year ending December 31, 2023, amounting to approximately HKD 63.9 million, pending approval at the 2024 Annual General Meeting[54] - A total of 5,227,200 shares remain subject to vesting conditions as of December 31, 2023[52] - The company will suspend shareholder registration from May 21, 2024, to May 24, 2024, to determine eligibility for attending the 2024 Annual General Meeting[55] - The company will also suspend shareholder registration from June 4, 2024, to June 7, 2024, to determine eligibility for the proposed final dividend[56] - The 2024 Annual General Meeting is scheduled for May 24, 2024[53] Operational Efficiency and Cost Management - The company continues to focus on enhancing operational efficiency and sustainable growth through rigorous cost control and inventory optimization strategies[27] - The total employee costs for the year amounted to RMB 2,279,994,000, down from RMB 2,425,598,000 in 2022, indicating a reduction of approximately 6%[1] - The company’s total sales and distribution expenses were RMB 5,588.2 million, accounting for 27.9% of total revenue, a decrease from 31.2% in 2022[40] - The average inventory turnover period improved to 148 days in 2023, down from 208 days in 2022, with inventory amount decreasing from RMB 6,071.9 million to RMB 4,704.7 million[44] Digital Transformation and Sales Growth - The company is focused on digital transformation, including the implementation of an upgraded ERP system to enhance operational efficiency[35] - The company continues to invest in optimizing store layouts and integrating digital services to enhance consumer experience and drive higher average transaction values[31] - Online sales contributed approximately 27% to total sales in 2023, up from 24% in 2022, indicating a strong trend in digital sales[32] - The company's sales through all channels, including online platforms, recorded an annual growth of over 22%, demonstrating the effectiveness of its digital transformation efforts[27] - The company’s private traffic channels recorded strong sales growth, contributing to offline direct retail sales[32] Market and Industry Insights - The sports industry in the Greater China region is expected to reach a market value of RMB 5 trillion by 2025, driven by government initiatives and upcoming events like the Paris Olympics[50] - The retail sales of clothing, footwear, and textiles in China grew by 12.9% year-on-year in 2023, outperforming the overall retail sales growth of 7.2%[27] Compliance and Governance - The company has complied with all applicable corporate governance codes and best practices throughout the year ending December 31, 2023[60] - The independent auditor, Deloitte, confirmed that the consolidated financial statements for the year ending December 31, 2023, align with the figures approved by the board on March 13, 2024[59] - The company has adopted the standard code for securities transactions by directors and confirmed compliance throughout the year ending December 31, 2023[61] Store Operations - The total number of direct-operated stores in Greater China decreased to 3,523 by December 31, 2023, from 4,093 at the beginning of the year, a net reduction of 570 stores[30] - The company continues to invest in optimizing store layouts and integrating digital services to enhance consumer experience and drive higher average transaction values[31]

Financial Performance - For the nine months ended September 30, 2023, the company reported unaudited consolidated profit attributable to owners of approximately RMB 310.6 million, an increase of 214.8% compared to RMB 98.6 million in the same period last year [3][8]. - Revenue for the same period was approximately RMB 15,443.7 million, representing a year-on-year increase of 7.3% from RMB 14,393.6 million [7][8]. - Operating profit increased by 50.5% to RMB 515.7 million, up from RMB 342.6 million in the previous year [8]. - The operating profit margin improved to 3.3%, an increase of 0.9 percentage points from 2.4% in the prior year [8]. - Net profit margin rose to 2.1%, up 1.3 percentage points from 0.8% in the previous year [8]. - Other comprehensive income for the period totaled RMB 866, compared to a loss of RMB 2,574 in the previous year [5]. - Total comprehensive income for the period was RMB 328.4 million, significantly higher than RMB 108.1 million in the same period last year [5]. Business Environment and Strategy - The company benefited from a recovery in sales environment and increased foot traffic in retail stores across mainland China, contributing to improved sales trends [7]. - The strong performance of the omnichannel retail ecosystem supported the company's refined retail strategy and digital transformation efforts [7]. - The company implemented cost control measures that enhanced profitability during the reporting period [7].

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 10,960,001 thousand, an increase of 11.1% compared to RMB 9,864,815 thousand in 2022[4] - Gross profit for the same period was RMB 3,670,684 thousand, reflecting a growth of 5.0% from RMB 3,495,946 thousand[4] - Operating profit surged to RMB 472,818 thousand, marking a significant increase of 127.0% from RMB 208,329 thousand in the previous year[4] - Profit attributable to owners of the company reached RMB 305,465 thousand, a remarkable increase of 1,654.2% compared to RMB 17,413 thousand in 2022[4] - Basic earnings per share for the period was RMB 5.90, up 1,635.3% from RMB 0.34 in the same period last year[4] - The company's profit for the six months ended June 30, 2023, was RMB 318,967,000, a significant increase from RMB 24,187,000 in the same period of 2022, representing a growth of 1,320%[13] - Total comprehensive income for the same period was RMB 316,979,000, compared to RMB 22,305,000 in 2022, marking an increase of 1,320%[13] - The company's net profit for the period was RMB 319.0 million, a significant increase of 1,218.8% compared to the same period last year[66] Cash Flow and Liquidity - Cash and cash equivalents increased by 70.1% to RMB 2,024,918 thousand from RMB 1,190,148 thousand[5] - The company's cash and cash equivalents as of June 30, 2023, amounted to RMB 2,024,918,000, up from RMB 1,190,148,000 at the end of 2022, reflecting a growth of 70%[14] - The net cash generated from operating activities for the six months ended June 30, 2023, was RMB 2,020,955 thousand, a significant increase from RMB 324,083 thousand in the same period of 2022[19] - The total cash and cash equivalents at the end of the period were RMB 2,024,918 thousand, up from RMB 1,236,716 thousand a year earlier[20] - The company reported a significant increase in cash flow from operating activities, indicating improved operational efficiency[19] - The company’s cash flow management strategies appear to be effective, as evidenced by the substantial increase in cash and cash equivalents[20] Inventory and Assets - Inventory decreased by 23.1% to RMB 4,672,120 thousand from RMB 6,071,858 thousand[5] - Non-current assets decreased from RMB 4,183,153,000 at the end of 2022 to RMB 3,790,219,000 as of June 30, 2023, a decline of approximately 9.4%[14] - The company's inventory decreased from RMB 6,071,858,000 at the end of 2022 to RMB 4,672,120,000, a decline of about 22.9%[14] - The average inventory turnover period improved significantly to 133 days in H1 2023, down from 202 days in H1 2022, with inventory value decreasing from RMB 6,071.9 million to RMB 4,672.1 million[67] Debt and Liabilities - Bank borrowings significantly reduced by 79.8% to RMB 91,991 thousand from RMB 456,162 thousand[5] - Current liabilities decreased from RMB 3,940,745,000 at the end of 2022 to RMB 3,384,711,000, a reduction of about 14.1%[15] - The net asset value of the company increased from RMB 8,193,920,000 at the end of 2022 to RMB 8,512,357,000, an increase of approximately 3.9%[15] - The company's equity attributable to owners increased from RMB 8,114,253,000 at the end of 2022 to RMB 8,419,188,000, reflecting a growth of approximately 3.8%[15] - The group's debt-to-equity ratio was 1.1% as of June 30, 2023, down from 5.6% as of December 31, 2022, indicating improved financial stability[68] Dividends - The company declared an interim dividend of HKD 0.0185 per share, not applicable in the previous year[4] - The interim dividend declared for the six months ended June 30, 2023, is HKD 0.0185 per share, totaling HKD 98,534,000, compared to no dividend in the same period of 2022[34] - The board declared an interim dividend of HKD 0.0185 per share for the six months ended June 30, 2023, compared to no dividend in the same period last year[74] Operational Efficiency - The company aims to enhance operational efficiency and customer interaction while focusing on sales conversion rates and seasonal full-price sales[50] - The company continues to optimize its physical store network while strengthening online traffic channels to improve cash turnover efficiency[50] - The company has continued to invest in optimizing its store layout and integrating digital services to enhance consumer experience and increase average transaction value[54] - The company is focusing on enhancing its digital operations and has invested in upgrading its ERP and business intelligence systems to drive operational excellence[58] - The private traffic channel recorded strong sales growth, contributing to improved sales conversion rates and shorter sales cycles[55] Market Performance - Revenue from sports apparel and footwear sales reached RMB 10,897,233,000 for the six months ended June 30, 2023, a 10.1% increase from RMB 9,807,723,000 in the same period of 2022[30] - Retail sales in the apparel, footwear, and textile categories in China grew by 12.8% year-on-year in the first half of 2023, outperforming the overall retail sales growth of 8.2%[50] - Online sales contributed approximately 25% to total sales, up from 21% in the same period last year, indicating a strong recovery in online sales channels[55] Employee and Governance - The group has approximately 23,700 employees as of June 30, 2023, representing a year-on-year decrease of 17.1%[73] - The company has complied with all applicable code provisions and recommended best practices in the Corporate Governance Code during the reporting period[92] - The company has adopted the standard code of conduct for securities transactions by directors and confirmed compliance during the reporting period[93] Accounting and Reporting - The application of revised Hong Kong Financial Reporting Standards did not have a significant impact on the financial position or performance of the group during the interim period[24] - The group’s financial statements are prepared in accordance with the Hong Kong Accounting Standards and the relevant disclosure requirements of the Hong Kong Stock Exchange[21] - The independent auditor, Deloitte, reviewed the unaudited consolidated financial information for the six months ending June 30, 2023[94]

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 10,960,001 thousand, representing an increase of 11.1% compared to RMB 9,864,815 thousand for the same period in 2022[2]. - Gross profit for the same period was RMB 3,670,684 thousand, up 5.0% from RMB 3,495,946 thousand year-on-year[2]. - Operating profit surged to RMB 472,818 thousand, a significant increase of 127.0% from RMB 208,329 thousand in the previous year[2]. - Profit attributable to owners of the company reached RMB 305,465 thousand, marking a remarkable increase of 1,654.2% compared to RMB 17,413 thousand in the prior period[2]. - Basic earnings per share for the period was RMB 5.90, a substantial rise of 1,635.3% from RMB 0.34 in the same period last year[2]. - Total comprehensive income for the period was RMB 316,979 thousand, compared to RMB 22,305 thousand in the same period last year[5]. - The company's net profit for the six months ended June 30, 2023, was RMB 305,465,000, a significant increase from RMB 17,413,000 in the same period of 2022, reflecting a substantial recovery in performance[24]. - Net profit for the period was RMB 319.0 million, a significant increase of 1,218.8% compared to the same period last year[43]. Cash and Liquidity - Cash and cash equivalents increased by 70.1% to RMB 2,024,918 thousand from RMB 1,190,148 thousand as of December 31, 2022[2]. - As of June 30, 2023, the group recorded a strong bank balance and cash amounting to RMB 2,224.9 million, up from RMB 1,190.1 million as of December 31, 2022, while net cash level increased to RMB 2,132.9 million from RMB 734.0 million[45]. - Bank borrowings were significantly reduced by 79.8% to RMB 91,991 thousand from RMB 456,162 thousand as of December 31, 2022[2]. - The interest expenses for bank borrowings were RMB 5,250,000 for the first half of 2023, a decrease from RMB 33,733,000 in the same period of 2022, indicating improved financing costs[20]. Inventory and Asset Management - Inventory decreased by 23.1% to RMB 4,672,120 thousand from RMB 6,071,858 thousand at the end of the previous year[2]. - The average inventory turnover period improved significantly to 133 days in H1 2023, down from 202 days in H1 2022, with inventory value decreasing from RMB 6,071.9 million as of December 31, 2022, to RMB 4,672.1 million as of June 30, 2023[44]. - The depreciation of right-of-use assets was RMB 452,947,000 for the first half of 2023, down from RMB 568,551,000 in the same period of 2022, reflecting better asset management[21]. Sales and Revenue Sources - Sales of sports apparel and footwear contributed RMB 10,897,233 thousand to revenue, up from RMB 9,807,723 thousand, reflecting a growth of 11.1%[17]. - The company earned RMB 62,768 thousand from franchise sales commissions, compared to RMB 57,092 thousand in the previous year, marking an increase of 10.8%[17]. - The company's online sales accounted for approximately 25% of total sales, up from 21% in the same period last year[34]. - The company recorded a strong sales growth in its private traffic channels, particularly through the Panwei Store ecosystem, which improved sales conversion rates and reduced sales cycles[34]. Expenses and Cost Management - Total employee costs amounted to RMB 1,193,904,000 for the first half of 2023, compared to RMB 1,258,961,000 in the same period of 2022, indicating a decrease of approximately 5.2%[21]. - Sales and distribution expenses decreased by 4.1% to RMB 2,913.6 million, representing 26.6% of total revenue, down from 31.2% in the previous year[41]. Dividends and Shareholder Returns - The company declared an interim dividend of HKD 0.0185 per share, which was not applicable in the previous year[2]. - The interim dividend declared is HKD 0.0185 per share for the six months ending June 30, 2023, compared to no dividend for the same period last year[54]. - The record date for the interim dividend is September 14, 2023, with the payment scheduled for October 6, 2023[54]. Corporate Governance and Compliance - The independent auditor has reviewed the unaudited condensed consolidated financial information for the six months ending June 30, 2023, in accordance with the relevant standards[57]. - The company has adhered to the principles of the Corporate Governance Code and complied with all applicable code provisions during the six months ending June 30, 2023[58]. Strategic Initiatives and Future Outlook - The group maintains a reasonable optimistic outlook for H2 2023, supported by improved consumer sentiment and a relatively low base effect from the previous year[49]. - The group aims to accelerate digital transformation to drive profit growth and improve profit margins, particularly through a robust omnichannel performance[49]. - The group plans to enhance its ERP and business intelligence systems, investing in digital tools to optimize inventory management and operational efficiency[50]. - The company continues to invest in digital transformation, enhancing its ERP system and other digital tools to improve operational efficiency[36]. - The company is focusing on optimizing its store layout and integrating digital services with physical stores to enhance customer experience[32]. - The company is strengthening strategic alliances with brand partners to enhance customer engagement and drive sales growth through integrated membership programs[35]. Employee and Share Incentive Plans - As of June 30, 2023, the group employed approximately 23,700 staff, a decrease of 17.1% year-on-year, while offering competitive compensation packages and employee benefits[51]. - The share incentive plan allows for a maximum of 213,047,184 shares to be awarded, representing 4% of the total shares issued as of the grant date[52]. - As of March 15, 2023, a total of 111,721,810 shares have been granted under the share incentive plan, accounting for approximately 2.10% of the issued shares[53]. - The total number of shares that can be further granted under the share incentive plan is 101,325,374, representing about 1.90% of the issued shares[53]. - For the six months ending June 30, 2023, no incentive shares were granted, while 126,400 incentive shares were forfeited or cancelled, and 377,400 incentive shares vested[53].

Financial Performance - For the three months ended March 31, 2023, the company reported unaudited consolidated revenue of RMB 5,837.6 million, an increase of 6.5% compared to RMB 5,480.6 million in the same period last year[6]. - The operating profit for the same period was RMB 332.7 million, representing a significant increase of 71.0% from RMB 194.5 million year-on-year[7]. - The net profit attributable to the company's owners was RMB 220.0 million, up 115.6% from RMB 102.0 million in the previous year[7]. - The gross profit margin improved to 33.5%, compared to 35.4% in the previous year, reflecting operational leverage and cost control measures[6]. - The company achieved a net profit margin of 3.9%, an increase of 1.9 percentage points from 2.0% in the prior year[7]. - The total comprehensive income for the period was RMB 229.6 million, compared to RMB 107.9 million in the same period last year[4]. Strategic Initiatives - The company attributed its performance improvement to the easing of COVID-19 restrictions in mainland China, leading to increased foot traffic and consumer spending[6]. - The company is focusing on refining its retail strategy and accelerating digital transformation to enhance operational efficiency[6]. - The board of directors remains committed to maintaining growth and improving profitability through strategic initiatives and cost management[7]. Accounting Standards - The company has implemented new accounting standards that did not significantly impact its financial performance for the current or prior periods[5].

Financial Performance - For the fiscal year ending December 31, 2022, the company reported a revenue of RMB 18,638,021, a decrease of 20.2% compared to RMB 23,350,235 in 2021[14] - Gross profit for the same period was RMB 6,688,046, down 19.4% from RMB 8,299,283 in the previous year, resulting in a gross margin of 35.9%[14] - Operating profit fell significantly by 55.4% to RMB 414,530 from RMB 928,457 in 2021, leading to an operating margin of 2.2%[14] - Profit attributable to owners of the company decreased by 75.0% to RMB 89,164, compared to RMB 356,587 in 2021[14] - Basic earnings per share dropped to RMB 1.72, a decline of 74.9% from RMB 6.86 in the previous year[14] - The company did not declare a final dividend, marking a 100% reduction from the previous year's HKD 0.016[14] - The company recorded a net profit of RMB 100.2 million in 2022, a decrease of 73.3% compared to the previous year[45] Balance Sheet and Cash Flow - Inventory decreased by 19.9% to RMB 6,071,858 from RMB 7,578,037 in 2021[14] - Accounts receivable and other receivables fell by 23.4% to RMB 2,149,713 compared to RMB 2,807,379 in the prior year[14] - Bank balances and cash decreased slightly by 3.5% to RMB 1,190,148 from RMB 1,233,783 in 2021[14] - Bank borrowings were reduced significantly by 71.2% to RMB 456,162 from RMB 1,581,640 in the previous year[14] - As of December 31, 2022, the group's cash and cash equivalents amounted to RMB 1,190.1 million, a decrease from RMB 1,233.8 million in the previous year[46] - The group's operating working capital was RMB 5,475.0 million, up from RMB 5,105.2 million year-on-year[46] - Total bank borrowings decreased to RMB 456.2 million from RMB 1,581.6 million as of December 31, 2021, with 92% of borrowings under fixed-rate arrangements[46] - Net cash from operating activities for 2022 was RMB 2,666.4 million, supporting liquidity needs[46] Market and Sales Strategy - The omnichannel sales contribution increased from 21% in 2021 to 24% in 2022, reflecting efforts to enhance sales quality and profitability[22] - The retail sales of clothing, footwear, and textiles in China decreased by 6.5% year-on-year in 2022, indicating significant challenges in the overall retail market[28] - The company recorded strong growth in private domain channels, including WeChat stores and Douyin live streaming, which helped offset weak physical store sales[28] - The company plans to enhance its integration of online and offline channels to provide a seamless shopping experience for consumers[22] - The company is focusing on optimizing its physical store network by prioritizing high-quality stores and integrating digital tools[22] - The company aims to deepen collaboration with brand partners to improve inventory structure and accelerate sales cycles[22] - The company is preparing for economic recovery by refining its retail strategy and enhancing customer interaction[28] - The company anticipates that the upcoming 2024 Paris Summer Olympics will further drive market demand[24] Operational Efficiency and Digital Transformation - The company continued to invest in digital transformation, enhancing its ERP and business intelligence systems to improve operational efficiency[37] - The company is focusing on enhancing its omnichannel strategy, integrating various sales platforms to improve customer interaction and operational efficiency[34] - The group plans to accelerate digital transformation and enhance member integration programs in 2023 to drive profitable growth[51] - The group aims to optimize inventory management and reduce reliance on promotions through a new omnichannel hub plan[53] Corporate Governance and Management - 廖元煌 has been serving as the executive director since June 2021 and has over 25 years of experience in banking, finance, corporate governance, and operations[56] - 王軍 is the current CEO and has extensive experience in corporate strategy, marketing planning, brand planning, and large retail operations[63] - The company has a strong focus on strategic planning and corporate development, with key personnel having significant experience in these areas[58] - The board includes members with diverse backgrounds in finance, corporate governance, and operational management, enhancing the company's strategic capabilities[59][60][61][62] - The company is committed to corporate governance and transparency, as evidenced by the establishment of various committees within the board[59][60] - The management team has a proven track record in their respective fields, which is expected to drive the company's future growth and performance[58][63] Risk Management - The company has established a risk management unit responsible for executing the risk management system and coordinating risk mitigation measures[198] - The internal audit department operates independently to assess and monitor the risk management and internal control systems, reporting quarterly to the audit committee[197] - The risk management framework includes four core stages: risk identification, risk assessment, risk response, and risk monitoring and reporting[199] - The audit committee reviews the effectiveness of the risk management and internal control systems annually, confirming their adequacy as of December 31, 2022[200] Shareholder Relations and Dividends - The company has adopted a dividend policy to distribute approximately 20% to 30% of the net profit available for distribution as dividends, subject to sufficient profits for its own development[186] - The company reported no dividend distribution for the year ending December 31, 2022, compared to a dividend of HKD 0.016 per share in 2021[73] - The annual general meeting will be held on May 25, 2023, at 10:00 AM in Hong Kong[91] Sustainability and Social Responsibility - The group has established a sustainability team to manage environmental risks and has implemented measures to reduce carbon emissions, as detailed in the ESG report[80] - The group is actively monitoring economic and social developments in China, as the economic environment significantly impacts consumer sentiment and business prospects[83] - The group has developed a climate change policy to assess and manage climate-related risks and opportunities[87] - The group made donations totaling approximately RMB 0.5 million in the current year, compared to RMB 0.2 million in the previous year[92]

Financial Performance - Total revenue for the year ended December 31, 2022, was RMB 18,638,021 thousand, a decrease of 20.2% compared to RMB 23,350,235 thousand in 2021[2] - Gross profit for the same period was RMB 6,688,046 thousand, down 19.4% from RMB 8,299,283 thousand in the previous year[2] - Operating profit decreased by 55.4% to RMB 414,530 thousand from RMB 928,457 thousand in 2021[2] - Profit attributable to owners of the company was RMB 89,164 thousand, a decline of 75.0% compared to RMB 356,587 thousand in the prior year[2] - Basic earnings per share dropped by 74.9% to RMB 1.72 from RMB 6.86 in 2021[2] - The proposed final dividend was zero, compared to HKD 0.016 in the previous year, marking a 100% decrease[2] - The company's net profit attributable to shareholders for 2022 was RMB 89,164, a significant decline of 75% compared to RMB 356,587 in 2021[21] - Net profit for 2022 was RMB 100.2 million, a decrease of 73.3% compared to the previous year[38] Revenue and Sales - The company's revenue from sports apparel and footwear products for 2022 was RMB 18,528,602, a decrease of 20% from RMB 23,222,060 in 2021[12] - In 2022, the company's revenue decreased by 20.2% to RMB 18,638.0 million compared to the previous fiscal year[33] - Online sales accounted for approximately 24% of total sales in 2022, despite challenges from COVID-19 restrictions[30] - The retail environment in mainland China faced significant challenges, with a 6.5% year-over-year decline in retail sales for clothing and footwear in 2022[26] Costs and Expenses - The total employee costs for 2022 amounted to RMB 2,425,598, down from RMB 2,764,107 in 2021, reflecting a reduction of approximately 12%[17] - Selling and distribution expenses for 2022 were RMB 5,806.8 million, accounting for 31.2% of total revenue, an increase from 29.8% in 2021[36] Assets and Liabilities - Inventory decreased by 19.9% to RMB 6,071,858 thousand from RMB 7,578,037 thousand in 2021[6] - Accounts receivable and other receivables fell by 23.4% to RMB 2,149,713 thousand from RMB 2,807,379 thousand[6] - The accounts receivable at the end of 2022 was RMB 862,084, a decrease from RMB 1,165,003 in 2021, indicating a reduction of approximately 26%[22] - The accounts payable at the end of 2022 was RMB 819,396, down from RMB 1,655,096 in 2021, representing a decrease of about 50%[24] - Cash and cash equivalents as of December 31, 2022, were RMB 1,190.1 million, down from RMB 1,233.8 million in 2021[40] - Bank borrowings were significantly reduced by 71.2% to RMB 456,162 thousand from RMB 1,581,640 thousand in the previous year[6] Store Operations - The number of directly operated stores decreased from 4,631 at the beginning of 2022 to 4,093 by the end of the year, a net reduction of 538 stores[28] - As of December 31, 2022, the retail network covered 7,293 stores, including 4,093 directly operated and 3,200 franchised stores[27] Digital Transformation and Strategy - The company continued to enhance its digital transformation, investing in ERP systems and other digital tools to improve operational efficiency[32] - The private traffic channels, including WeChat mini-programs and Douyin live streaming, showed strong sales growth, contributing to better sales conversion rates[30] - The company aims to optimize its omnichannel strategy to reduce reliance on promotions and improve inventory management efficiency, targeting better profit margins and operational efficiency[45] - The company plans to accelerate its digital transformation and expand its membership integration program in 2023[44] Future Outlook - The company remains cautiously optimistic about sales growth in 2023, driven by a recovery in consumer sentiment and increased foot traffic[44] - The sports industry outlook in the Greater China region remains promising, with an expected industry value of RMB 5 trillion by 2025, aiding the company in recovering and surpassing previous growth trends[45] Corporate Governance - The company has complied with the corporate governance code as per the listing rules during the year ending December 31, 2022[52] - The company will hold its 2023 Annual General Meeting on May 25, 2023[48]

Financial Performance - For the nine months ended September 30, 2022, the company reported unaudited consolidated revenue of approximately RMB 14,393.6 million, a decrease of 20.1% compared to RMB 18,021.3 million in the same period last year[3][7] - The company's attributable profit for the period was approximately RMB 98.6 million, representing a significant decline of 83.4% from RMB 594.3 million in the previous year[3][7] - Operating profit for the nine months was RMB 342.6 million, down 65.6% from RMB 996.7 million year-on-year[3][7] - The net profit margin decreased to 0.8%, down from 3.4% in the previous year, reflecting a decline of 2.6 percentage points[7] - The operating profit margin for the nine months was 2.4%, down from 5.5% in the previous year, a decrease of 3.1 percentage points[7] - The total comprehensive income for the period was RMB 108.1 million, compared to RMB 609.4 million in the previous year, reflecting a significant decline[4] Quarterly Performance - The company experienced a turnaround in the third quarter, achieving attributable profit of approximately RMB 81.2 million, reversing losses from the same quarter last year and the second quarter of this year[6] Market Conditions - The decline in revenue and profit was attributed to weakened consumer sentiment due to the ongoing COVID-19 pandemic, resulting in reduced foot traffic in shopping areas and fluctuating retail market conditions[6] Other Financial Metrics - The company recorded other operating income and gains of RMB 233.4 million, down from RMB 323.5 million year-on-year[3] - The financial costs decreased to RMB 133.4 million from RMB 153.6 million in the previous year, indicating a reduction in financing expenses[3]