Financial Performance - Total revenue for the six months ended June 30, 2023, was RMB 6,522.4 million, representing a 14.8% increase compared to RMB 5,683.6 million in the same period of 2022[8]. - Gross profit for the same period was RMB 2,797.1 million, with a gross margin of 42.9%, up from 42.0% in 2022[16]. - Profit attributable to equity holders was RMB 665.4 million, a 12.7% increase from RMB 590.4 million in the previous year[9]. - Basic earnings per share increased to RMB 26.36, compared to RMB 23.47 in 2022[16]. - Operating profit rose by 7.0% to RMB 986.6 million, compared to RMB 921.7 million in the same period last year[23]. - The group achieved a gross profit margin of 42.9%, slightly up from 42.0% in the first half of 2022[23]. - The group reported a net cash flow from operating activities of RMB 265.3 million, a significant improvement from a cash outflow of RMB 268.5 million in 2022[82]. - The company reported a profit of RMB 671,197,000 for the six months ended June 30, 2023, an increase of 14% compared to RMB 589,063,000 in the same period of 2022[120]. Dividends and Shareholder Returns - The company declared an interim dividend of HKD 0.137 per share, with a payout ratio of 50%[11]. - The board proposed an interim dividend of HKD 0.137 per share, an increase from HKD 0.130 per share in 2022[76]. - The interim dividend declared was HKD 0.137 per share, totaling approximately RMB 332,736,000, compared to RMB 297,110,000 for the same period last year, an increase of 12%[157]. Assets and Liabilities - Total assets as of June 30, 2023, were RMB 16,623.2 million, with non-current assets at RMB 4,648.8 million[17]. - Current liabilities increased to RMB 5,832.5 million from RMB 4,916.5 million in 2022, resulting in a debt ratio of 19.7%[17]. - The group's total liabilities decreased to RMB 7,825.7 million as of June 30, 2023, down from RMB 8,186.8 million as of December 31, 2022, a reduction of 4.4%[84]. - The net asset value of the group increased by 5.9% to RMB 8,797.5 million as of June 30, 2023, compared to RMB 8,306.7 million as of December 31, 2022[84]. - The company's total liabilities decreased from RMB 6,644,784,000 at the end of 2022 to RMB 5,832,513,000 as of June 30, 2023, a reduction of about 12%[124]. Inventory and Receivables - The company reported an average inventory turnover period of 115 days, compared to 106 days in 2022[17]. - The average trade receivables turnover period was 106 days, slightly up from 102 days in the previous year[17]. - The rolling overall working capital turnover days increased to 88 days, up from 68 days in 2022, with inventory turnover days rising to 107 days[77]. - As of June 30, 2023, accounts receivable amounted to RMB 427.4 million, with a turnover period of 12 days, down from 14 days in 2022[78]. Market and Strategic Initiatives - The company remains optimistic about the medium to long-term prospects of the sports goods industry in mainland China[22]. - The company aims to leverage the growing running culture and favorable national policies to drive future business growth[28]. - The company plans to accelerate store openings in high-tier cities and adjust product structures according to brand characteristics to enhance market presence[61]. - The collaboration between the main brand and Saucony is expected to drive growth through product innovation and retail network synergies[61]. Product Development and Innovation - The new "160X 5.0 PRO" running shoes feature a 20% improvement in propulsion compared to the previous model, "160X 3.0 PRO"[32]. - The "减震旋" and "騛速" series introduced in 2023 utilize advanced shock-absorbing technology for enhanced performance[36]. - The new basketball shoe "JLIN 3" features over 80% rebound capability and superior propulsion, utilizing "X-TEP BOOOM" technology[41]. - The company launched the flagship marathon carbon plate shoe "Endorphin Elite" and other models in the first half of 2023, catering to elite runners' needs[56]. Employee and Operational Insights - The company has approximately 9,300 employees as of June 30, 2023, a decrease from 9,800 employees at the end of 2022, with production staff making up 58.2% of the workforce[60]. - The group’s employee costs decreased slightly to RMB 652,769,000 in the first half of 2023 from RMB 677,646,000 in 2022, a decline of 4%[151]. Research and Development - Research and development costs increased to RMB 175.2 million, up from RMB 107.4 million in 2022, accounting for 2.7% of total revenue compared to 1.9% in 2022[70]. - Research and development costs rose to RMB 175,210,000 in the first half of 2023, compared to RMB 107,364,000 in 2022, marking an increase of 63%[151]. Environmental and Social Responsibility - The MSCI ESG rating was upgraded to "BBB," reflecting the company's commitment to sustainable practices and governance[26]. - The carbon footprint of the new PLA T-shirt series is reported to be 7.85 kg CO2 eq per piece, reducing emissions by approximately 47.7% compared to regular cotton T-shirts[50]. - The company announced a strategic cooperation agreement with the China Next Generation Education Foundation to donate RMB 100 million worth of sports goods over the next four years[51]. Share Capital and Ownership - The company has a total of 2,636,716,923 shares issued as of June 30, 2023[100]. - Mr. Ding Shui Bo holds 1,294,741,000 shares, representing approximately 49.10% of the company's issued share capital[100]. - The company has adopted a share incentive plan effective from August 1, 2014, which will expire on August 1, 2024[107].

Financial Data and Key Metrics Changes - In the first half of 2023, the company's revenue was RMB 652 million, representing a 14.8% increase compared to the previous year [4][12] - Net profit increased by 12.7% to RMB 670 million, with a net profit margin of 10.2% [5][14] - The interim dividend was set at RMB 0.137 per share, with a payout ratio of 50% [5][12] Business Line Data and Key Metrics Changes - Revenue from core brands increased by 10.9% to RMB 543 million, accounting for 83.2% of total revenue [12][15] - The mass market segment saw a 15% growth, while the leisure and professional sports segments also reported significant increases [15][16] - K Swiss and Palladium brands experienced an 18.9% increase in sales, primarily driven by the Chinese market [16] Market Data and Key Metrics Changes - Retail sell-through for core brands increased by 20% in Q1 2023, with high double-digit growth continuing into Q2 [4][10] - The company reported a significant slowdown in growth starting in May, but maintained double-digit growth in July and August [10][11] - The company has 8,031 core XTEP branded stores, primarily located in Mainland China [13] Company Strategy and Development Direction - The company aims to strengthen its core brand strategy and enhance its R&D capabilities, particularly in the running segment [7][25] - There is a focus on nurturing new brands and expanding the ecosystem for running, aligning with national health and exercise policies [7][8] - The company plans to enhance its store experience and increase market share among younger consumers [34][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in leading the sector despite potential challenges from consumption and the economy [8][43] - The company maintains a sales growth guidance of 15% to 20% for the year [44] - Management noted that while there are uncertainties in the global economy, the demand for value-for-money products in the mass market remains strong [43] Other Important Information - The company received an upgrade in its MSCI ESG rating from BB to BBB, the highest in the industry [12] - The company is committed to sustainability, with plans to donate RMB 100 million to support youth development in rural areas [31] Q&A Session Summary Question: What is the outlook for the company's sales growth? - The company remains confident in achieving a sales growth of 15% to 20% for the year despite market fluctuations [44] Question: How is the company addressing the challenges in the retail environment? - Management highlighted the focus on enhancing brand awareness through direct-to-consumer (DTC) channels and improving store experiences [37][38] Question: What are the company's plans for new product launches? - The company plans to continue launching innovative products, particularly in the running segment, to attract both professional and mass market consumers [25][26]

Financial Performance - Total revenue for the first half of 2023 reached RMB 6,522.4 million, representing a 14.8% increase compared to RMB 5,683.6 million in the same period of 2022[9]. - Net profit attributable to ordinary shareholders was RMB 665.4 million, up 12.7% from RMB 590.4 million in the first half of 2022[10]. - The gross profit margin improved to 42.9% in 2023 from 42.0% in 2022[14]. - Basic earnings per share increased to RMB 26.36, compared to RMB 23.47 in the previous year[14]. - Operating profit grew by 7.0% to RMB 986.6 million, compared to RMB 921.7 million in the same period last year[21]. - Profit attributable to equity holders increased by 12.7% to RMB 665.4 million, up from RMB 590.4 million in the first half of 2022[21]. - The company reported total revenue of RMB 6,522.4 million for 2023, a 14.8% increase from RMB 5,683.6 million in 2022, driven primarily by the performance of mass sports brands[60][62]. - Revenue from footwear reached RMB 3,889.3 million, accounting for 59.6% of total revenue, with a year-on-year growth of 15.1%[60]. - Total gross profit rose by 17.2% to RMB 2,797.1 million, with an overall gross margin of 42.9%[64]. Assets and Liabilities - Non-current assets rose to RMB 4,648.8 million, up from RMB 3,907.7 million in 2022[15]. - Current assets increased slightly to RMB 11,974.4 million from RMB 11,891.5 million in 2022[15]. - The total assets of the group increased to RMB 16,623.2 million as of June 30, 2023, compared to RMB 16,493.5 million as of December 31, 2022, representing a growth of 0.8%[79]. - The group's total liabilities decreased to RMB 7,825.7 million as of June 30, 2023, from RMB 8,186.8 million as of December 31, 2022, indicating a reduction of 4.4%[79]. - The debt ratio was reported at 19.7%, a slight increase from 18.9% in the previous year[15]. Dividends and Shareholder Returns - The company declared an interim dividend of HKD 0.137 per share, with a payout ratio of 50.0%[9]. - The company declared an interim dividend of HKD 0.137 per share, up from HKD 0.130 in the previous year, with a payout ratio of 50.0%[21]. - The company declared an interim dividend of HKD 0.137 per share, totaling approximately RMB 332,736,000, compared to RMB 297,110,000 for the same period in 2022, marking an increase in shareholder returns[139]. Market and Brand Performance - The company operates over 8,200 stores globally, with a strategic focus on mass sports, fashion sports, and professional sports segments[2]. - The main brand, Xtep, recorded a revenue growth of 10.9% to RMB 5,429.7 million, up from RMB 4,897.6 million in the previous year[21]. - The retail sales of the main brand in Q1 2023 showed a significant growth of approximately 20% year-on-year[20]. - The fashion sports segment reported a revenue increase of 18.9% to RMB 748.6 million, accounting for 11.5% of the group's total revenue in the first half of 2023[50]. - The professional sports segment achieved a revenue growth of 119.9% to RMB 344.2 million, representing 5.3% of the group's total revenue, and recorded a net profit of RMB 9.0 million for the first time[53]. Research and Development - Research and development costs rose to RMB 175.2 million, representing 2.7% of total revenue, up from 1.9%[67]. - The company is investing HKD 100 million in research and development for new technologies aimed at enhancing product performance[198]. Sustainability and Corporate Governance - The company's MSCI ESG rating was upgraded to "BBB" in July, reflecting its strong performance in environmental, social, and governance practices[24]. - The company is committed to enhancing the environmental, social, and governance performance of its suppliers to promote sustainable development in mainland China[24]. - The company launched a sustainable T-shirt series with a carbon footprint of only 7.85 kg CO2 eq per piece, reducing carbon emissions by approximately 47.7% compared to regular cotton T-shirts[48]. - The company has maintained compliance with all provisions of the corporate governance code throughout the reporting period[89]. Employee and Operational Metrics - The company has approximately 9,300 employees as of June 30, 2023, a decrease from 9,800 employees at the end of 2022, with production staff making up 58.2% of the workforce[58]. - The average inventory turnover days increased to 115 days from 106 days in 2022[15]. - Selling and distribution expenses rose to RMB 1,510.3 million, accounting for 23.2% of total revenue, up from 18.4%[66]. Future Outlook - The company remains optimistic about the medium to long-term prospects of the sports goods industry in mainland China[20]. - The company anticipates continued growth in the running sector, supported by the recovery of marathon events post-COVID-19, and aims to strengthen its market share in this area[59]. - The company plans to continue expanding its market presence and investing in new product development to drive future growth[115].

Financial Performance - Total revenue for 2022 reached RMB 12,930 million, representing a 29.1% increase compared to 2021[7] - Operating profit for 2022 was RMB 1,464 million, reflecting a growth of 4.9% year-on-year[7] - Net profit attributable to ordinary shareholders was RMB 922 million, up from RMB 908 million in 2021[9] - The gross profit margin for 2022 was 40.9%, a slight decrease from 41.7% in 2021[14] - The group's revenue increased by 29.1% to RMB 12,930.4 million in 2022, compared to RMB 10,013.2 million in 2021[24] - Operating profit rose by 4.9% to RMB 1,464.3 million, up from RMB 1,396.2 million in 2021[24] - Profit attributable to ordinary shareholders was RMB 921.7 million, a slight increase of 1.5% from RMB 908.3 million in 2021[24] - The overall net profit margin was 7.1%, down from 9.1% in 2021[126] Dividends and Shareholder Returns - The company declared a final dividend of HKD 7.1 per share, bringing the total dividend for the year to HKD 20.1 per share, with a payout ratio of 50.0%[9] - The proposed final dividend is HKD 0.071 per share, down from HKD 0.135 per share in 2021, with a total dividend payout ratio of 50.0%[128] - The total dividend per share for 2022 was HKD 0.201, comprising an interim dividend of HKD 0.13 and a final dividend of HKD 0.071[165] Market Position and Strategy - The company was included in the MSCI China Index in June 2022, enhancing its market visibility[8] - The company aims to implement a multi-brand strategy with a target for 2025 as part of its "Five Five Plan" initiated in 2023[12] - The company plans to strategically expand its brands in specific regions with greater commercial potential[30] - The company aims to enhance its market presence through sponsorship of major marathons and partnerships with sports stars[53] - The company aims to become a leading global sports brand and a respected Chinese brand operator through a multi-brand and multi-market strategy[192] Inventory and Assets - The average inventory turnover days increased to 90 days in 2022, compared to 77 days in 2021[14] - The total assets as of December 31, 2022, were RMB 12,338 million in current assets and RMB 4,155 million in non-current assets[14] - The total assets increased to RMB 16,493.5 million in 2022, up from RMB 14,615.4 million in 2021, while total liabilities rose to RMB 8,186.8 million from RMB 6,633.0 million[135] Debt and Financial Ratios - The debt ratio was reported at 19.6% for 2022, an increase from 17.4% in 2021[14] - The debt ratio increased to 19.6% in 2022 from 17.4% in 2021, calculated based on total bank borrowings and convertible bonds against total assets[134] Employee and Workforce - The company employed approximately 9,800 staff as of December 31, 2022, an increase from 8,500 in 2021, with production employees making up 57.8% of the workforce[109] - The workforce grew to approximately 9,800 employees in 2022, up from 8,500 in 2021, with 57.8% being production staff[145] Research and Development - Research and development expenses increased to RMB 299.0 million, representing 2.3% of total revenue, down from 2.5% in 2021[122] Marketing and Brand Development - The company signed popular actor Wang Hedi as a new brand ambassador in December 2022 to enhance appeal among younger consumers[80] - The company continues to leverage celebrity endorsements as a key marketing strategy to maintain brand attractiveness among young consumers[80] Sustainability and Innovation - The company launched its first low-carbon eco-friendly running shoe "360–ECO" as part of its sustainable innovation efforts[32] - The "360–ECO" low-carbon running shoes with an 81% reduction in carbon emissions compared to traditional materials, certified by ISCC[88] - The use of innovative materials like Sorona and organic cotton highlights the company's commitment to eco-friendly practices[66] Investor Relations - The company successfully expanded its investor base and enhanced investor understanding of its business strategy, resulting in substantial returns for shareholders[151] - A total of 437 investor meetings were held, including 50 with analysts, 3 earnings briefings, and 31 reverse roadshows[156] - The company received multiple awards, including Best CEO and Best CFO in the Asia region, highlighting its strong investor relations performance[163] Corporate Governance - The company emphasizes the importance of corporate governance and has adopted good governance practices to ensure transparency and accountability[189] - The company has complied with all corporate governance codes except for the separation of the roles of Chairman and CEO, which are currently held by the same individual[190] - The company has a commitment to improving shareholder returns through ongoing reviews and enhancements of its corporate governance practices[189]

Financial Data and Key Metrics Changes - In 2022, the company's revenue reached RMB12.9 billion, representing a year-on-year increase of 29.1% [4][14] - The net profit was RMB922 million, up 1.5%, while the core EXTEP brand's net profit increased by 10.7% to RMB1.35 billion [5][16] - The final dividend per share was RMB7.1, with a payout ratio of 50% for the full year [5][19] - Operating profit rose by 4.9% to RMB1.464 billion, with the core EXTEP brand's operating profit increasing by 9.4% to RMB1.759 billion [15][21] Business Line Data and Key Metrics Changes - Core EXTEP brand revenue grew by 25.9% to RMB11.128 billion, driven by strong performance in running products and kits [15][24] - The Athleisure segment revenue increased by 44.4% to RMB1.4 billion, with a significant contribution from the K Swiss and Palladium brands [15][44] - The number of stores for core EXTEP brand increased by 116 to a total of 6,313, with plans to open around 200 more stores in 2023 [18][40] Market Data and Key Metrics Changes - Retail sell-through growth was mid double digits for 2022, with Q1 exceeding 30% and Q4 experiencing a decline due to pandemic impacts [10][12] - By the end of 2022, inventory turnover days improved from 106 to 90 days, indicating better inventory management [22] - The company expects retail performance to improve in 2023 as pandemic control measures are relaxed, leading to more development opportunities in the sportswear industry [8][55] Company Strategy and Development Direction - The company aims to focus on the running category and enhance its brand positioning through professional performance to attract the mass market [7][42] - Plans include upgrading retail channels, enhancing store images, and increasing investment in kids' business to capture young consumers [37][40] - The company is committed to corporate social responsibility and aims to align with China's dual carbon goals through sustainable product offerings [36][41] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the consumption market in 2023, anticipating strong growth in the sportswear industry [8][55] - The company is confident in achieving double-digit growth for the core EXTEP brand and 20% to 30% growth for the Athleisure segment in 2023 [55] - Management highlighted the importance of brand upgrading and expanding the running ecosystem to strengthen market presence [29][42] Other Important Information - The gross margin for the Athleisure segment decreased from 44.6% to 37.6% due to logistics and supply chain issues, but is expected to recover above 40% in 2023 [19][20] - The company reported a total loss of RMB120 million from four new brands still in the investment stage, which impacted overall profit growth [16][17] - The company has a healthy balance sheet with net cash of RMB1.22 billion and sufficient capital to support future brand developments [21] Q&A Session Summary Question: What are the growth targets for the new brands? - The company aims for Saucony and Merrell to achieve sales growth targets of 60% to 70% in 2023, with Saucony expected to break even [53][55] Question: How does the company plan to manage inventory levels? - The company has improved inventory turnover days and expects to return to a normal level of four months by the end of 2023 [13][22] Question: What is the outlook for the Chinese market? - Management is confident in the future of the Chinese economy, citing increased health consciousness and government support as positive factors [54][55]

Financial Performance - Total revenue for the year ended December 31, 2022, was RMB 12,930.4 million, representing a 29.1% increase from RMB 10,013.2 million in 2021[10] - Operating profit for 2022 was RMB 1,464.3 million, up 4.9% from RMB 1,396.2 million in 2021[10] - Net profit attributable to ordinary shareholders was RMB 921.7 million, compared to RMB 908.3 million in the previous year[10] - The gross profit margin for 2022 was 40.9%, a decrease from 41.7% in 2021[10] - Basic earnings per share were RMB 36.6 cents, compared to RMB 36.4 cents in 2021[17] - Gross profit for the year 2022 was RMB 5,291.7 million, an increase of 26.7% from RMB 4,177.9 million in 2021, with a gross margin of 40.9%, down 0.8 percentage points from 41.7% in 2021[82] - The overall gross profit margin decreased by 0.8% to 40.9% in 2022, down from 41.7% in 2021, primarily due to changes in product mix and profit contributions from different brands[81] - The company proposed a final dividend of HKD 0.071 per share, down from HKD 0.135 in 2021, with a total dividend for 2022 of HKD 0.201, representing a payout ratio of 50.0%[91] Revenue Breakdown - Revenue from footwear reached RMB 7,760.2 million, representing 60.0% of total revenue, with a year-on-year increase of 30.9%[76] - The mass sports segment generated RMB 11,127.9 million, accounting for 86.1% of total revenue, with a growth of 25.9% compared to the previous year[77] - The fashion sports segment revenue increased by 44.4% to RMB 1,402.5 million in 2022, accounting for 10.8% of the group's total revenue[63] - The professional sports segment recorded a strong and sustained growth of 99.0% year-on-year, reaching RMB 400.0 million in 2022, representing 3.1% of the group's total revenue[66] Store and Market Expansion - The total number of stores exceeded 8,000 across the Asia-Pacific, North America, Europe, the Middle East, and Africa[2] - As of December 31, 2022, the company operated a total of 6,313 adult brand stores in mainland China and overseas[58] - The company aims to implement a multi-brand strategy with a target for 2025, focusing on expanding its brand portfolio[9] - The company is strategically expanding its brands in regions with greater commercial potential, despite ongoing pandemic challenges[19] Sustainability and Innovation - The introduction of the Mass Balance low-carbon eco-friendly running shoes "360–ECO" marks a significant step in sustainable innovation, contributing to the establishment of a green supply chain[20] - The launch of the "360–ECO" low-carbon running shoes achieved an 81% reduction in carbon emissions compared to traditional materials, certified by ISCC for sustainability[61] - The company is committed to sustainable practices by utilizing recycled materials, such as fibers made from discarded plastic bottles[50] - The group is committed to sustainable development and social responsibility, enhancing efforts in sustainable innovation since 2020[20] Employee and Operational Metrics - As of December 31, 2022, the group had approximately 9,800 employees, an increase from 8,500 employees in 2021, with production staff accounting for 57.8%[74] - The overall working capital turnover days increased to 67 days, up from 64 days in 2021, with inventory turnover days rising by 13 days to 90 days[92] - The average inventory turnover days increased to 90 days in 2022 from 77 days in 2021[10] - The company reported a net finance cost of RMB 91.2 million, an increase from RMB 63.2 million in 2021, primarily due to higher interest expenses on bank loans[87] Investor Relations and Corporate Governance - The company successfully expanded its investor base and enhanced investor understanding of its business strategy, resulting in substantial returns for shareholders[106] - The company maintained open communication with stakeholders through various online and offline channels, ensuring timely and accurate information dissemination[106] - The company emphasizes its commitment to high standards in investor relations management, aiming to create long-term value for shareholders[106] - The board consists of three executive directors, one non-executive director, and three independent non-executive directors as of December 31, 2022[138] Market Trends and Community Engagement - The running community in China has seen a surge, with 291,000 views related to running clubs in 2022, and 87.8% of runners favoring daily training and participating in running competitions[22] - The youth fitness market in mainland China is experiencing exponential growth, with a 204.6% increase in children's fitness centers compared to the previous year[22] - The company sponsored several marathons, including the Xiamen Marathon and the Shanghai Marathon, showcasing its commitment to promoting quality running products[38] Product Development and Technology - The new generation running shoe "160X 3.0 PRO" was launched in September 2022, featuring the innovative "XTEP ACE" cushioning technology and the world's first "PISA" supercritical foaming technology, providing excellent rebound and propulsion for professional runners[32] - The "PISA" supercritical foaming technology used in Xtep shoes significantly enhances performance metrics, providing a competitive edge in the market[42] - The company continues to innovate in shoe technology, focusing on lightweight materials and advanced cushioning systems to improve runner comfort and performance[42] Financial Health and Liabilities - The group's total liabilities increased to RMB 8,186.8 million in 2022 from RMB 6,633.0 million in 2021, resulting in a debt ratio of 19.6%[95][96] - The net asset value of the group rose by 4.1% to RMB 8,306.7 million, with a net asset value per share of approximately RMB 3.15, up from RMB 3.03 in 2021[96] - The company has sufficient resources to fulfill its accounting and financial reporting responsibilities and comply with listing rules[178] Awards and Recognition - The company received multiple awards in 2022, including the Best Investor Relations Company in Greater China for the non-essential consumer goods sector[120] - The company has been recognized for its corporate governance, winning awards for Best CEO and Best CFO in investor relations[120] - The company has a history of significant awards and recognitions, highlighting its leadership in the sportswear industry[126]

Financial Performance - The company reported a revenue of RMB 5,683.6 million for the six months ended June 30, 2022, representing an increase of 37.5% compared to RMB 4,134.9 million in the same period of 2021[29]. - Gross profit for the same period was RMB 2,386.8 million, with a gross margin of 42.0%, slightly up from 41.8% in 2021[29]. - Operating profit reached RMB 921.7 million, reflecting an operating margin of 16.2%, compared to 16.5% in the previous year[29]. - Profit attributable to equity holders of the company was RMB 590.4 million, a significant increase of 38.4% from RMB 426.5 million in 2021[23]. - Basic earnings per share increased to RMB 23.47, up from RMB 17.09 in the prior year[29]. - Total revenue for the group reached RMB 5,683.6 million in 2022, a 37.5% increase from RMB 4,134.9 million in 2021[87]. - Revenue from footwear was RMB 3,379.8 million, accounting for 59.5% of total revenue, with a growth of 29.8% compared to RMB 2,604.1 million in 2021[87]. - Revenue from apparel increased by 50.6% to RMB 2,186.5 million, representing 38.4% of total revenue[87]. - The group reported a profit attributable to ordinary shareholders of approximately RMB 590.4 million for the period ended June 30, 2022, representing an increase of about 38.4% compared to RMB 426.5 million in 2021[99]. - The net profit margin remained stable at 10.4% for the period, slightly up from 10.3% in 2021[99]. Assets and Liabilities - The company’s total assets amounted to RMB 15,799.2 million, with non-current assets at RMB 3,907.7 million and current assets at RMB 11,891.5 million[30]. - The debt ratio stood at 18.9%, an increase from 15.4% in 2021, indicating a rise in leverage[30]. - The group’s total assets increased to RMB 15,799.2 million as of June 30, 2022, up from RMB 14,615.4 million at the end of 2021, marking a growth of 8.1%[110]. - Total liabilities as of June 30, 2022, were RMB 7,469.05 million, up from RMB 6,633.06 million as of December 31, 2021, representing an increase of approximately 12.6%[168]. Inventory and Cash Flow - Average inventory turnover days increased to 106 days, compared to 79 days in the previous year, indicating a slower inventory movement[30]. - Cash and cash equivalents decreased by approximately RMB 626.2 million to RMB 3,303.6 million as of June 30, 2022, compared to RMB 3,929.8 million at the end of 2021[106]. - The company reported a decrease in cash flow from operating activities primarily due to increased tax payments and interest expenses[154]. - The company’s cash and cash equivalents at the end of the period were RMB 3,303,577 thousand, down from RMB 3,757,754 thousand at the end of June 30, 2021[154]. Business Strategy and Growth - The company plans to expand its retail network and enhance brand management strategies to drive future growth[2]. - The company aims for a revenue target of RMB 20 billion for the main brand by 2025, with a total revenue target of RMB 4 billion for four new brands[33]. - The company has adjusted its business strategy to promote e-commerce sales in response to temporary store closures due to lockdowns[37]. - The company plans to continue optimizing the retail network for the Paladin brand to support long-term growth[37]. - The company plans to focus resources on brand building, product innovation, and network expansion in the second half of 2022[38]. - The company plans to continue expanding its market presence and investing in new product development to drive future growth[150]. Market Trends and Community Engagement - The running community in China is experiencing rapid growth, with millennials making up 70.3% of runners and Gen Z showing the fastest growth rate at 62.3%[40]. - The number of members in the running community has reached approximately 1.5 million, reflecting the growth of amateur and professional runners[36]. - The company has established the largest running ecosystem in China, with over 6,200 stores and approximately 1.5 million members in its running community[44]. - The Chinese government's economic stimulus plans in June are expected to boost economic recovery and consumer sentiment, positively impacting the retail sector[38]. Product Development and Innovation - The company has launched the "160X 3.0" professional running shoes, which received a silver award at the 2022 A' Design Award and a gold award at the 2022 Muse Design Award[48]. - The company introduced new basketball shoes "Youyun 6.0" and "Qingyu 3.0" in the first half of 2022, enhancing its basketball product line[62]. - The company has launched new environmentally friendly products, including the PAMPA ECO-VERSARY boots made from recycled materials[79]. - The launch of the "XTEP-XDNA" high-end brand incorporates eco-friendly materials, aligning with the growing environmental consciousness among consumers[62]. Employee and Management - The company has approximately 9,600 employees as of June 30, 2022, up from about 8,500 employees at the end of 2021, with production staff accounting for 58%[83]. - The management emphasized the importance of human resources management to support sustainable business development through recruitment optimization and training programs[115]. - The board consists of three executive directors and three independent non-executive directors, ensuring a balanced distribution of power and authority[123]. Shareholder Information - The company declared an interim dividend of HKD 0.13 per share, up from HKD 0.115 per share in 2021, maintaining a high level of shareholder returns[101]. - The company’s major shareholders, Ding Shui Bo and Ding Mei Qing, collectively hold approximately 49.72% of the issued share capital, with Ding Shui Bo personally holding about 2.30%[138]. - The company has adopted a share incentive plan for employees, executives, and directors, with details available in the financial notes[137].

Financial Performance - Total revenue for 2021 reached RMB 10,013.2 million, an increase from RMB 8,171.9 million in 2020, representing a growth of 22.5%[13] - Operating profit for 2021 was RMB 1,396.2 million, up from RMB 918.2 million in 2020, reflecting a growth of 52.1%[13] - Profit attributable to equity holders of the company was RMB 908.3 million, compared to RMB 513.0 million in 2020, marking a significant increase of 77.1%[13] - Gross profit margin for 2021 was 41.7%, an increase from 39.1% in 2020[13] - The company's revenue for 2021 reached RMB 10,013.2 million, a year-on-year increase of 22.5% from RMB 8,171.9 million in 2020[19] - The main brand revenue grew to RMB 8,841.3 million, up 24.5% compared to RMB 7,101.1 million in 2020, driven by over 34% revenue growth in the second half of 2021[19] - The gross profit margin improved to 41.7%, up from 39.1% in 2020[19] - Operating profit increased by 52.1% to RMB 1,396.2 million, compared to RMB 918.2 million in 2020[19] - Profit attributable to ordinary shareholders rose by 77.1% to RMB 908.3 million, up from RMB 513.0 million in 2020[19] Assets and Liabilities - Non-current assets as of December 31, 2021, totaled RMB 4,183.0 million, up from RMB 3,544.4 million in 2020[14] - Current assets increased to RMB 10,432.4 million in 2021, compared to RMB 9,027.3 million in 2020[14] - The debt ratio was reported at 17.4% for 2021, slightly up from 17.2% in 2020[14] - As of December 31, 2021, the total assets of the group amounted to RMB 14,615.4 million, an increase of 16.3% from RMB 12,571.7 million in 2020[108] - The total liabilities of the group were RMB 6,633.0 million, up from RMB 5,273.0 million in 2020, representing a 25.8% increase[108] - The net asset value of the group increased by 9.4% to RMB 7,982.4 million, with a net asset value per share of approximately RMB 3.03, up 5.6% from RMB 2.87 in 2020[108] Market Strategy and Growth - The company plans to expand its brand portfolio and enhance its market presence through strategic partnerships and new product launches[12] - The company aims for the main brand revenue to reach RMB 200.0 billion by 2025, with new brands targeting RMB 40.0 billion[18] - The company plans to open more stores in major cities in China for its brands, including the recent debut of the Gaiswei brand[22] - The group expects to continue expanding its brand presence in high-tier cities, particularly for the Saucony and Merrell brands, enhancing their market visibility[88] - The group anticipates that the newly launched Gaiswei trial stores in provincial capitals will support future expansion in high-tier cities[88] Product Development and Innovation - The company plans to invest in product development, network expansion, and brand building for new brands in 2022 and beyond[23] - The launch of the "160X" professional running shoe series and the high-end brand "XDNA" received positive feedback, indicating effective dual-track strategy[21] - The company launched the "Tebu 100" series in December 2021 to support youth participation in sports activities, featuring advanced technology for stability and cushioning[41] - The company aims to strengthen its product offerings and market position through innovative and sustainable materials in its product lines[60] - The launch of the Re-Craft series by Paladin in the second half of 2021 included sustainable materials, reflecting the company's commitment to environmental initiatives[75] Corporate Governance - The company has a strong commitment to corporate governance, with independent directors holding significant experience in finance and management[142] - The board consists of three executive directors and three independent non-executive directors, ensuring a balanced distribution of power and authority[150] - The company has adopted good corporate governance practices to enhance transparency and accountability, which are crucial for creating shareholder value[147] - The company has complied with all corporate governance code provisions except for the separation of the roles of chairman and CEO, which are currently held by the same individual[148] - The independent non-executive directors play a significant role in providing independent judgment and monitoring the group's performance, ensuring that shareholder interests are protected[156] Risk Management - The risk management and internal control systems are designed to provide reasonable assurance against material misstatements or losses, and are continuously reviewed for effectiveness[184] - The company has established procedures for identifying, assessing, and managing significant risks that may impact its strategic, operational, and financial objectives[192] - The risk management process includes risk identification, assessment, response, reporting, and monitoring, ensuring that risks are regularly discussed with the board and audit committee[192] - The board and audit committee conducted an annual review of the effectiveness of the risk management and internal control systems for the year ending December 31, 2021[193] - The group confirmed compliance with corporate governance code provisions related to risk management and internal control systems for the year ended December 31, 2021[194] Employee Development - The company provided over 230,000 hours of online and offline training for employees in 2021 through its talent development center[87] - The group employed approximately 8,500 staff as of December 31, 2021, an increase from 8,000 staff in 2020[116] Investor Relations - The group maintained a strong investor relations strategy, resulting in a significant increase in stock price, reflecting enhanced investor understanding and recognition of the business strategy[118] - The company received multiple awards for investor relations, including the Best Investor Relations Company in the non-consumer discretionary sector[132] - The company organized 28 reverse roadshows during the year to enhance understanding of its operations and new retail experiences[129] Sustainability Initiatives - The company has been recognized for its excellence in ESG practices, receiving the ESG Excellence Award from the Hong Kong Institute of Directors[132] - The award-winning "Day and Night Runner" running apparel, made from recycled ocean plastics, won the Gold Award at the 4th China Design Award from over 12,000 entries[60] - The PLA T-shirt's polylactic acid content increased from 19% to 60% in 2021, promoting sustainability and reducing environmental impact[61]

Financial Performance - Revenue for the first half of 2021 reached RMB 4,135 million, representing a 12.4% increase compared to the previous year[10] - Operating profit increased by 36.5% to RMB 684 million, reflecting improved operational efficiency[10] - Profit attributable to equity holders of the company rose by 72.0% to RMB 427 million[10] - The interim dividend per share was HKD 11.5, up 76.9%, with a payout ratio of 60.0%[10] - The company's revenue increased by 12.4% to RMB 4,134.9 million in the first half of 2021, compared to RMB 3,679.1 million in the same period of 2020[19] - Net profit attributable to ordinary shareholders was RMB 426.5 million, an increase from RMB 247.9 million in the same period of 2020[19] - Basic earnings per share rose to RMB 17.1 cents, compared to RMB 10.1 cents in the first half of 2020[19] - The company reported a total comprehensive income of RMB 443,779 thousand for the six months ended June 30, 2021, compared to RMB 254,915 thousand in 2020, an increase of 74.1%[109] - The adjusted profit before tax for the group was RMB 645,632 thousand for the six months ended June 30, 2021, compared to RMB 417,973 thousand for the same period in 2020, reflecting a significant increase of approximately 54.4%[126] Cash Flow and Financial Position - Net cash and cash equivalents increased to RMB 2,580 million, up from RMB 2,251 million at the end of 2020[10] - Cash and cash equivalents increased by approximately RMB 285.9 million to RMB 3,757.8 million as of June 30, 2021, compared to RMB 3,471.9 million at the end of 2020[83] - The net cash flow from operating activities was RMB 684.4 million, after accounting for income tax and interest expenses[84] - The company reported a net cash outflow from investing activities of RMB 56,270,000, compared to a net inflow of RMB 32,972,000 in the same period last year[117] - Cash flow used in financing activities was RMB 335,067,000, up from RMB 227,915,000 in the previous year, reflecting increased dividend payments and loan repayments[117] - The company paid dividends totaling RMB 122,489,000 to ordinary shareholders, down from RMB 155,535,000 in the same period of 2020[118] Assets and Liabilities - As of June 30, 2021, total assets amounted to RMB 12,618.0 million, an increase from RMB 12,571.7 million as of December 31, 2020[85] - The group's total liabilities decreased to RMB 4,973.4 million from RMB 5,273.0 million as of December 31, 2020, resulting in a debt ratio of 15.4%[85] - The net asset value increased by 4.7% to RMB 7,644.6 million, with a net asset value per share of approximately RMB 2.91, up 1.4%[85] - The company reported a decrease in trade receivables to RMB 2,303,192 thousand, down 16.6% from RMB 2,760,306 thousand at the end of 2020[110] - The total equity attributable to equity holders of the company increased to RMB 7,644,628 thousand, reflecting a strong financial position[112] Operational Efficiency - Average inventory turnover days improved to 79 days, down from 94 days in the previous year[16] - The overall working capital turnover days improved to 77 days, down from 89 days in 2020, with reductions in inventory, trade receivables, and trade payables turnover days[81] - Selling and distribution expenses rose to RMB 774.2 million, accounting for 18.7% of total revenue, compared to RMB 685.2 million and 18.6% in 2020, primarily due to increased advertising and promotion costs[74] - General and administrative expenses decreased to RMB 482.6 million, representing 11.7% of total revenue, down from RMB 512.9 million and 13.9% in 2020, mainly due to a reduction in trade receivables impairment[75] Market and Brand Development - The company plans to expand its brand portfolio and enhance its distribution network across China and overseas markets[8] - The company plans to accelerate the opening of new stores for its brands Saucony and Merrell in higher-tier cities in mainland China[21] - The company is focusing on brand rejuvenation for its brands Gaiswei and Paladin, with the first self-operated store expected to open in early 2022[21] - The company continues to adopt a multi-brand strategy to cater to diverse consumer needs across different market segments[24] - The company is enhancing its running ecosystem through various services such as product promotion, running communities, training, and events[29] E-commerce and Sales Performance - E-commerce sales for the Xtep brand exceeded RMB 300 million during the 618 shopping festival, with year-on-year growth of 40% on Tmall and 300% on JD[44] - The total online transaction amount during the 618 shopping festival increased by 26.5% year-on-year to RMB 578.5 billion, with live-streaming channels contributing RMB 64.5 billion[24] - During the 618 shopping festival, Saucony and Merrell recorded online sales growth of over 257% and 221% year-on-year, respectively[54] Corporate Governance and Compliance - The company emphasizes its commitment to corporate governance as per the listing rules[189] - The audit committee has reviewed the interim financial results and internal controls during the reporting period[95] - The company has confirmed compliance with the corporate governance code throughout the reporting period, with no deviations noted[95] Future Outlook - The company is optimistic about the long-term development of the sportswear industry in mainland China, driven by the government's efforts to stimulate domestic consumption[22] - The company plans to continue expanding its market presence and invest in new product development to drive future growth[114] - The company is optimistic about future business prospects, driven by the recovery of the domestic economy and the growth of the sports apparel market[66]

Financial Performance - Total revenue for the year was RMB 8,172 million, representing a slight increase of 0.1% compared to the previous year[5] - Operating profit reached RMB 918 million, showing a significant increase of 25.6% year-over-year[5] - Profit attributable to ordinary shareholders was RMB 513 million, reflecting a growth of 29.5% compared to the prior year[5] - Gross profit margin for the year was 39.1%, while the operating profit margin was 11.2%[50] - The group's revenue for 2020 remained stable at RMB 8,171.9 million, a slight decrease of 0.1% from RMB 8,182.7 million in 2019[55] - Revenue from the main brand, Xtep, decreased by 7.9% to RMB 7,101.1 million, down from RMB 7,706.7 million in 2019[55] - The group's gross profit margin was 39.1%, down from 43.4% in 2019[55] - Operating profit for the group was RMB 918.2 million, a decrease from RMB 1,234.0 million in 2019[55] - Profit attributable to ordinary shareholders decreased by 29.5% to RMB 513.0 million, compared to RMB 727.7 million in 2019[55] - Total gross profit for the year was RMB 3,198.4 million, a decline of 9.9% from RMB 3,550.4 million in 2019[106] Cash and Financial Position - Cash and cash equivalents as of December 31, 2020, amounted to RMB 2,251 million, an increase from RMB 2,132 million in the previous year[50] - As of December 31, 2020, cash and cash equivalents increased by RMB 502.4 million to RMB 3,471.9 million, compared to RMB 2,969.5 million in 2019, primarily due to net cash inflow from operating activities of RMB 320.1 million[121] - The net cash position, after deducting bank borrowings, was approximately RMB 2,251.4 million as of December 31, 2020, up from RMB 2,131.6 million in 2019[122] - The total assets increased to RMB 12,571.7 million in 2020 from RMB 12,322.6 million in 2019, with total liabilities decreasing to RMB 5,273.0 million from RMB 5,362.3 million[122] - The debt ratio improved to 17.2% in 2020 from 19.1% in 2019, calculated based on total bank borrowings divided by total assets[122] Market and Sales Performance - Online retail sales during the Double Eleven shopping festival exceeded RMB 520 million, representing a year-on-year growth of approximately 50%[57] - The group plans to accelerate the opening of stores for brands Saucony and Merrell in higher-tier cities in mainland China starting from May 2020[57] - The demand for sports and fashionable activewear surged due to the pandemic, with more people adopting running as a popular activity and a shift towards comfortable leisurewear during remote work[60] - The live-streaming e-commerce sector in China saw over 100% year-on-year growth during the 2020 Double Eleven shopping festival, with approximately 300 million Taobao users engaging with live broadcasts[61] - During the Double Eleven shopping festival in 2020, Saucony's online sales tripled compared to the previous year, while Merrell's online sales increased by 38% year-on-year[92] Brand and Product Development - The company plans to expand its brand portfolio, which currently includes four international brands, to enhance market presence[4] - The company is committed to innovation and collaboration with well-known intellectual property partners to enhance its product offerings[63] - The company aims to continue leveraging cultural elements in its products to appeal to the younger generation, particularly Generation Z[67] - The company has developed advanced footwear technologies, including a collaboration with Dow Chemical for a new insole technology that enhances comfort and fit[71] - The "Xtep x Shaolin" series debuted at the Shanghai Fashion Week in October 2020, showcasing a blend of traditional Shaolin elements with modern fashion, gaining significant attention[67] Corporate Governance and Investor Relations - The company has a strong commitment to corporate governance, aiming to create more value for shareholders through effective management practices[148] - The company emphasizes internal controls and fair disclosure to ensure transparency and accountability in operations[148] - The board consists of three executive directors and three independent non-executive directors, ensuring a high level of independence[149] - The company maintained effective communication with investors through virtual meetings and live broadcasts during the COVID-19 pandemic, ensuring timely and transparent disclosures[127] - The company has established a whistleblowing policy to allow employees and stakeholders to report illegal or non-compliant activities confidentially[187] Social Responsibility and Community Engagement - The company emphasizes social responsibility through partnerships with athletes, such as donating sports equipment for every three-pointer made by Jeremy Lin during the CBA season[81] - The group made charitable donations totaling approximately RMB 36.5 million during the year ended December 31, 2020[199] Research and Development - R&D expenses for the year were RMB 223.5 million, accounting for 2.7% of total revenue, up from 2.4% in 2019[110] - The company has established a flexible supply chain platform and smart manufacturing capabilities to enhance product innovation[144] Future Outlook - The group expects a recovery in business activities and consumer confidence to continue promoting positive economic growth in mainland China in 2021[58] - The company remains optimistic about the long-term prospects of the sports goods industry in mainland China despite short-term impacts from the COVID-19 pandemic[102]