中国动向(03818) - 2021 - 中期财报

Company Information Company Profile This section provides basic information about China Dongxiang (Group) Co., Ltd., including its board members, auditors, legal advisors, registered office, and main business locations - The company's board of directors comprises executive directors, including Chen Yihong (Chairman) and Zhang Zhiyong (CEO), and independent non-executive directors such as Chen Guogang and Liu Xiaosong[5] - The company's auditor is PricewaterhouseCoopers, with legal advisors including Norton Rose Fulbright Hong Kong and Beijing Tianda & G.H. Law Firm[5] - The company's registered office is in the Cayman Islands, its principal place of business in Hong Kong is at Lippo Centre, Admiralty, and its main office in China is in Beijing Economic-Technological Development Area[5] Investor Information Share and Dividend Information This section details China Dongxiang's share listing, outstanding ordinary shares, interim dividend distribution, key dates, and investor relations contact information - The company's shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on October 10, 2007, with stock code 03818[9] Share and Dividend Information | Indicator | Value | | :----------- | :----------------------------------- | | Number of Ordinary Shares Issued | 5,886,121,025 shares (as of September 30, 2020) | | Interim Dividend | RMB 5.69 cents per share | | Payment Date | On or about December 21, 2020 | | Results Announcement Date | November 25, 2020 | | Share Register Closure Period | December 10 to December 14, 2020 | - Investor Relations contact details include telephone (8610) 6783 6585 and email ir@dxsport.com.cn[9] Performance Highlights Key Financial Indicators For the six months ended September 30, 2020, the company's revenue remained flat, but net profit attributable to owners and basic earnings per share increased nearly fivefold, with a recommended interim dividend of 30% of net profit Performance Highlights for the Six Months Ended September 30 | Indicator | 2020 (RMB million) | 2019 (RMB million) | Change | | :------------------------------------ | :-------------------- | :-------------------- | :------------ | | Revenue | 899 | 899 | — | | Gross Profit | 540 | 588 | -8.2% | | Gross Profit (before inventory impairment provision/(reversal)) | 563 | 561 | 0.4% | | Gross Profit Margin | 60.1% | 65.4% | -5.3 percentage points | | Gross Profit Margin (before inventory impairment provision/(reversal)) | 62.6% | 62.4% | 0.2 percentage points | | Operating Profit | 1,240 | 247 | 402.0% | | Operating Profit excluding Investment Segment | 5 | 89 | –94.4% | | Net Profit Attributable to Owners of the Company | 1,116 | 188 | 493.6% | | Basic/Diluted Earnings Per Share (RMB cents) | 19.04 | 3.21 | 493.1% | | Interim Dividend Per Share (RMB cents) | 5.69 | 1.61 | 253.4% | - The Board recommended an interim dividend of 30% of the net profit attributable to equity holders for the six months ended September 30, 2020[11] Chairman's Statement Macroeconomic and Industry Overview During the reporting period, the global economy was severely impacted by COVID-19, while China's economy gradually recovered, driven by domestic demand and increased consumer focus on health and sports - The COVID-19 pandemic continued to severely impact the global economy, with severe outbreaks in Europe and America, and multiple Asian economies facing contraction[13] - China's epidemic was gradually brought under control, leading to economic recovery, with increased economic growth in the third quarter and domestic consumption becoming one of the most critical drivers of economic growth[13] - In the post-pandemic era, consumers focused on mental and physical health, sports, and fitness, with the gradual resumption of sports events indirectly boosting demand for sportswear[13] Group Performance and Dividend Policy The Group's revenue remained flat during the reporting period, but profit attributable to equity holders and basic EPS increased nearly fivefold, with a recommended interim dividend of 30% of net profit Group Key Financial Performance | Indicator | 2020 (RMB million) | Change | | :------------------- | :-------------------- | :-------- | | Revenue | 899 | Flat year-on-year | | Profit Attributable to Equity Holders | 1,116 | Up 493.6% year-on-year | | Basic Earnings Per Share (RMB cents) | 19.04 | Up 493.1% year-on-year | - The Board recommended an interim dividend of 30% of the net profit attributable to equity holders for the six months ended September 30, 2020[14] China Business Reform and Brand Promotion China's business deepened its "quasi-direct-to-consumer" model reform and digital transformation, with Kappa achieving progress in retail performance, inventory, and cash flow, enhancing brand exposure and youth appeal through collaborations and marketing - China's business comprehensively deepened the "quasi-direct-to-consumer" model reform, actively promoting omnichannel digitalization across channels, products, and supply chain management[15] - Kappa brand business achieved new phased progress in retail performance, terminal inventory levels, and cash flow, meeting management expectations[15] - The brand continued to collaborate with renowned designers and anime IPs to expand its customer base and increase exposure in the trendy market; it also hosted online music events, invited Lexie Liu and Justin Huang as brand ambassadors/spokespersons, and became an industry partner for "Honor of Girls Season 2," leading e-sports trends[16] - The Group continued to optimize its offline channel structure, with outlet channels and shopping malls showing stable growth; as of September 30, 2020, the total number of Kappa brand stores was 1,153, a net increase of 24, with plans to continue closing inefficient stores in the future[17] - E-commerce business continued to grow, launching a digital omnichannel operating platform to connect online and offline inventory and orders[18] Japan Business Adjustment Due to the pandemic, the Group decided to focus on the China market, selling Kappa Japan trademarks and licensing the "Phenix" brand to a third party to consolidate resources - In July 2020, the Group sold Kappa Japan trademarks and miscellaneous intellectual property assets to a subsidiary of BasicNet S.p.A. for USD 13 million[19] - The decision was made to grant a license for the "Phenix" brand to a licensee to consolidate resources and marketing efforts, focusing on the China market[19] Investment Business and Future Outlook The Group's investment business operated steadily with net assets of RMB 10 billion and RMB 1,261 million in net investment income, primarily from market valuation increases, with future plans for prudent investment and stable shareholder returns Investment Business Key Data | Indicator | Value (as of September 30, 2020) | | :----------- | :----------------------- | | Net Investment Assets | RMB 10 billion | | Net Investment Income | RMB 1,261 million | - The significant increase in investment income primarily resulted from increased book gains due to the rising valuation of major market investment products[20] - Looking ahead, the Group will continue to uphold the Kappa brand spirit, seize opportunities in the sports industry, prudently implement global strategies and investments, and deliver long-term stable returns to shareholders[20] Management Discussion and Analysis Macroeconomic and Industry Review During the reporting period, the global economy faced severe COVID-19 impacts, while China's economy gradually recovered with 4.9% GDP growth in Q3, driven by domestic consumption, and the sports and e-commerce sectors saw accelerated growth - In 2020, global GDP was projected to shrink by 4.5%, with the US GDP shrinking by 5.9%, the EU economy by 8.3%, and developing Asian economies experiencing their first contraction[28] - China's economy continued to recover, with GDP growing 4.9% year-on-year in the third quarter, and cumulative growth for the first three quarters turning positive to 0.7%, with domestic consumption driving GDP growth by 1.7 percentage points[28] - China's total retail sales of consumer goods increased by 3.3% year-on-year in September, with sports and entertainment goods growing by 8.0%, and cumulative growth for nine months reaching 6.8% year-on-year[28] - E-commerce further developed, with online retail sales of physical goods increasing by 11.3% year-on-year in September, and online penetration rate rising by 4.8 percentage points to 24.3% year-on-year[28] Business Review The Group's China Kappa brand business advanced through reforms and digital transformation, enhancing competitiveness via diverse promotion and product innovation, while Japan operations adjusted strategically by selling Kappa trademarks and licensing Phenix to focus on China - The China Kappa brand business achieved new phased progress under channel, product, and supply chain management reforms, meeting management expectations[32] - In brand promotion, Kappa continued to collaborate with entertainment, music, and art sectors, hosted online music festivals, and invited Lexie Liu and Justin Huang as brand ambassadors/spokespersons to enhance brand image and youth appeal[32][35] - Kappa actively sponsored the National Equestrian Team and the Chinese Fencing Team, became the title sponsor of e-sports team RNG DOTA2, and an industry partner for "Honor of Girls Season 2," leading e-sports trends[35] - In product design and R&D, Kappa launched series like BANDA, LABS, and Newtro-Ku, collaborated with IPs such as Crayon Shin-chan and Doraemon, significantly transforming footwear with a focus on personalized design and comfort, and expanding independent sales channels[35][38][39][40][41] - The omnichannel retail network continued to optimize, with the total number of Kappa brand stores increasing by a net of 24 to 1,153; e-commerce business continued to grow, launching a digital omnichannel operating platform[44] - Japan's business adjusted due to the pandemic and global uncertainties, selling Kappa Japan trademarks and intellectual property, and licensing the Phenix brand to a third party to focus on the China market[44][46] Investment Business The Group's investment business remained prudent amid the pandemic, with RMB 10 billion in net investment assets and RMB 1,261 million in net investment income, primarily from rising market valuations, with future plans to strengthen partnerships - The Group maintained a prudent and pragmatic approach, controlling the scale and risk of investment assets[47] Investment Business Key Data | Indicator | Value (as of September 30, 2020) | | :----------- | :----------------------- | | Net Investment Assets | RMB 10 billion | | Net Investment Income | RMB 1,261 million | - The significant increase in investment income primarily resulted from increased book gains due to the rising valuation of major market investment products[47] - Looking ahead, the Group will strengthen cooperation with excellent investment partners, maintain a prudent attitude, patience, and focus to deliver stable returns to shareholders[47] Outlook The Group is confident in China's economy and sportswear industry, expecting stable growth in the second half, and will continue to refine brand strategy, optimize operations, and prudently invest globally for long-term returns - Performance in the second half of the fiscal year is expected to achieve stable growth, as the Group remains confident in the prospects of China's economy and the sportswear industry[48] - In the future, the Group will continue to uphold the historical spirit of the Kappa brand, implement localized sales team strategies, accelerate omnichannel inventory turnover, and enhance the professional capabilities of the product team[48] - The Group will seize development opportunities in the sports industry, rationally utilize resources, expand brand promotion channels, and prudently implement global strategies and investments, combining capital with sports to deliver long-term stable returns to shareholders[48] Financial Review During the period, Group sales were flat, but profit attributable to owners surged nearly fivefold due to significantly higher net financial and other investment income, with strong performance in China's Kappa segment offsetting a decline in Japan, maintaining robust liquidity - For the six months ended September 30, 2020, the Group's sales amounted to RMB 899 million, remaining flat compared to the same period last year[51] - Profit attributable to equity holders of the Company significantly increased to RMB 1,116 million (2019: RMB 188 million)[51] Sales Analysis (by Region, Business Segment, and Product Category) | Segment/Product | 2020 (RMB million) | 2019 (RMB million) | Change | | :------------- | :-------------------- | :-------------------- | :------ | | China Segment Total | 815 | 749 | 8.8% | | - Kappa Apparel | 560 | 500 | 12.0% | | - Kappa Footwear | 169 | 143 | 18.2% | | - Kappa Accessories | 19 | 18 | 5.6% | | - Kids' Wear Business | 46 | 52 | -11.5% | | Japan Segment Total | 84 | 150 | -44.0% | | - Phenix Brand | 55 | 98 | -43.9% | | - Kappa Brand | 29 | 52 | -44.2% | | Group Total | 899 | 899 | 0.0% | Kappa Brand Sales by Channel (China Segment) | Channel | 2020 (RMB million) | 2019 (RMB million) | Change | | :------------- | :-------------------- | :-------------------- | :------ | | Non-Direct Operated | 309 | 236 | 30.9% | | Direct Operated | 439 | 425 | 3.3% | | Kappa Brand Total | 748 | 661 | 13.2% | - The Group's gross profit (before provision for impairment losses on inventories) was RMB 563 million, an increase of RMB 2 million year-on-year, with an overall gross profit margin of 62.6%, up 0.2 percentage points[58] Gross Profit Margin Analysis (by Region, Business Segment, and Product Category) | Segment/Product | 2020 Gross Margin | 2019 Gross Margin | Change (percentage points) | | :------------- | :----------- | :----------- | :------------ | | China Segment | 65.9% | 67.2% | -1.3 | | - Kappa Brand Total | 69.6% | 73.0% | -3.4 | | Japan Segment | 31.0% | 38.7% | -7.7 | | Group Overall | 62.6% | 62.4% | 0.2 | - Net gain from financial assets and other investments was RMB 1,355 million, a significant increase from RMB 224 million in the prior year, with the investment segment contributing RMB 1,261 million[61] Investment Segment Income (by Investment Direction) | Investment Direction | Investment Segment Income (RMB million) | Of which: Fair Value Change Gain on Financial Instruments (RMB million) | | :------------------- | :-------------------------- | :-------------------------------------------- | | Equities | 404 | 256 | | Private Equity Funds | 388 | 341 | | Equity Funds | 219 | 177 | | Single Equity Investments | 148 | 140 | | Debt, Bonds, Debt Funds | 95 | 32 | | Others | 7 | – | | Total | 1,261 | 946 | - Total distribution costs and administrative expenses were RMB 658 million, accounting for 73.2% of total sales, an increase of 10.4 percentage points from the prior year, primarily due to increased sales and the scaling back of Japan operations[66] - Operating profit was RMB 1,240 million, with an operating profit margin of 137.9%; operating profit excluding the investment segment was RMB 5 million[67] - Profit attributable to equity holders of the Company was RMB 1,116 million, with a net profit margin of 124.1%; basic and diluted earnings per share were both RMB 19.04 cents, an increase of 493.1% year-on-year[70] - The Board resolved to distribute an interim dividend of RMB 5.69 cents per ordinary share, totaling approximately RMB 334,920,000[70] - As of September 30, 2020, the Group's cash and bank balances were RMB 2,993 million, an increase of RMB 892 million from March 31; net asset value was RMB 11,371 million, and the current ratio was 8.3 times[76] Financial Asset Investments (at Fair Value) | Investment Item | September 30, 2020 (RMB million) | March 31, 2020 (RMB million) | | :----------------------- | :--------------------------- | :--------------------------- | | Listed Securities | | | | Alibaba | 568 | 1,166 | | Other Listed Securities | 996 | 1,020 | | Total | 1,564 | 2,186 | | Other Unlisted Investments | | | | Yunfeng USD Fund II | 477 | 424 | | Harvest Select Cornerstone | 353 | 364 | | Pingtao (Hong Kong) Limited | 309 | 174 | | Panfeng Value Private Securities Investment Fund C | 263 | 344 | | Yunfeng RMB Fund IV (Yunfeng Qitai) | 208 | 196 | | Yunfeng RMB Fund II (Yunfeng Xinchuang) | 196 | 196 | | Golden China Fund | 182 | 132 | | Harvest Select Fund II No. 3 | 174 | 178 | | Hangzhou Hanyun Xinling (Alibaba New Retail Fund) | 163 | 133 | | Yunfeng USD Fund III | 119 | 115 | | Yunfeng RMB Fund III (Yunfeng Xincheng) | 118 | 117 | | Jiachen RMB Fund I (Weixin Zhonghua) | 111 | 69 | | Hongtai Growth Fund (Angel Plus) | 108 | 108 | | Boyu RMB Fund II (Guokai Boyu) | 103 | 78 | | Others | 2,588 | 2,132 | | Total | 5,472 | 4,760 | - As of September 30, 2020, the Group's assets pledged were RMB 130 million, a decrease from RMB 400 million as of March 31[83] - The Group has various capital commitments, including investment commitments to private equity funds such as Shanghai Xianghe Yongyuan, Hangzhou Hanyun Xinling, Yunfeng Fund III, Xiamen Yuanfeng, Persistent Edge China Partners, Ltd., and CR Tech Investment Limited, with total outstanding commitments of approximately RMB 500 million[84][85] - The Group faces foreign exchange risk, primarily due to fluctuations in USD, HKD, and JPY exchange rates against RMB, impacting net assets, revenue, and net profit[89] Significant Investment: Alibaba Group Holding Limited | Company Name & Stock Code | Number of Shares Held | Holding Percentage | Investment Cost (RMB million) | Fair Value (RMB million) | % of Total Assets | | :----------------------- | :------- | :------- | :---------------------- | :---------------------- | :----------- | | Alibaba Group Holding Limited (NYSE: BABA) | 198,919 | 0.007% | 87 | 398 | 3.2% | | Alibaba Group Holding Limited — SW (09988.HK) | 701,944 | 0.003% | 112 | 170 | 1.4% | | Total | | | 199 | 568 | 4.6% | - During the period, the company recognized an unrealized fair value change gain of RMB 198 million on Alibaba shares and a net disposal gain of RMB 105 million[93] Other Information Restricted Share Award Scheme The company adopted a restricted share award scheme in 2010 to retain and incentivize employees, with a trustee holding shares until vesting conditions are met; no new shares were granted this period, with 23,050,071 shares awarded as of September 30, 2020 - The scheme was adopted on December 10, 2010, to retain and incentivize individuals who continuously contribute to the Group's operations and development[96] - The trustee is required to purchase a maximum of 30,000,000 existing shares in the market and hold them in trust for the selected participants until the shares vest according to the scheme rules[96] - For the six months ended September 30, 2020, no restricted shares were granted to any eligible participants under the scheme[96] - As of September 30, 2020, the number of restricted shares awarded under the scheme was 23,050,071 shares[96] Share Option Scheme The company adopted a share option scheme in 2019 to reward and retain contributors, outlining eligibility, exercise price determination, and share limits; multiple options were granted to management and employees during the period, with some lapsing due to resignations - The share option scheme was adopted on August 8, 2019, to provide incentives to eligible participants to enhance company value and shareholder interests[99] - The exercise price of share options is determined by the Board and shall not be less than the highest of the closing price on the offer date, the average closing price for the preceding five business days, and the nominal value of the shares[99] - Under the scheme, the maximum number of shares that may be granted under options shall not exceed 10% of the total issued shares on the adoption date, which is 588,612,102 shares[99] Share Option Scheme Movement Details (for the six months ended September 30, 2020) | Grant Date | Unexercised as of April 1, 2020 | Granted during the six months ended September 30, 2020 | Unexercised as of September 30, 2020 | Lapsed during the period | Unexercised as of this interim report date | | :------------ | :------------------- | :---------------------------- | :-------------------- | :------- | :--------------------- | | 16/09/2019 | 18,300,000 | — | 18,300,000 | 480,000 | 17,820,000 | | 07/01/2020 | 1,560,000 | — | 1,560,000 | 480,000 | 1,080,000 | | 01/04/2020 | 2,400,000 | — | 2,400,000 | — | 2,400,000 | | 01/09/2020 | — | 1,200,000 | 1,200,000 | — | 1,200,000 | | Total | 22,260,000 | 1,200,000 | 23,460,000 | 960,000 | 22,500,000 | - During the period ended September 30, 2020, no share options were exercised or cancelled, while 960,000 share options lapsed due to resignations[104] Directors' and Major Shareholders' Interests in Securities This section discloses the interests and short positions of the company's directors, chief executives, and major shareholders in the company's shares as of September 30, 2020, with Chairman Mr. Chen Yihong and his controlled entities holding a majority stake Directors' Interests in Securities (as of September 30, 2020) | Director Name | Nature of Interest | Number and Class of Securities (Long Position) | Approximate Percentage | | :--------- | :------------- | :--------------------- | :--------- | | Mr. Chen Yihong | Controlled Corporation Interest | 2,273,024,000 shares | 38.62% | | | Controlled Corporation Interest | 315,698,025 shares | 5.36% | | Mr. Zhang Zhiyong | Beneficial Owner | 166,120,025 shares | 2.82% | | Ms. Chen Chen | Controlled Corporation Interest | 176,787,730 shares | 3.00% | | | Beneficial Owner | 21,500,000 shares | 0.37% | | Mr. Lv Guanghong | Beneficial Owner | 10,000,000 shares | 0.17% | Major Shareholders' Interests and Short Positions (as of September 30, 2020) | Shareholder Name | Nature of Interest | Number of Shares (Long Position) | Approximate Holding Percentage | | :----------------------- | :------------- | :--------------- | :------------- | | Poseidon Sports Limited | Beneficial Owner | 2,273,024,000 | 38.62% | | | Controlled Corporation Interest | 315,698,025 | 5.36% | | Harvest Luck Development Limited | Controlled Corporation Interest | 2,273,024,000 | 38.62% | | | Controlled Corporation Interest | 315,698,025 | 5.36% | - Mr. Chen Yihong wholly owns and controls Harvest Luck Development Limited, which holds all issued share capital of Poseidon Sports Limited, thus Mr. Chen Yihong is deemed to have an interest in the shares held by Poseidon[114] Corporate Governance and Compliance The company is committed to high-quality corporate governance, complying with HKEX codes, with most directors attending the AGM despite some absences, and the audit committee reviewed interim financials and internal controls, with no listed securities transactions during the period - The company has complied with the code provisions set out in the Corporate Governance Code of the Hong Kong Stock Exchange, although Chairman Mr. Chen Yihong and independent non-executive director Mr. Liu Xiaosong were unable to attend the Annual General Meeting due to important engagements[126] - All directors of the company confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules throughout the review period[127] - The Audit Committee has reviewed the company's interim financial information, financial reporting system, and internal controls, and the interim condensed consolidated financial information has been reviewed by PricewaterhouseCoopers[128] - For the six months ended September 30, 2020, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[129] Interim Condensed Consolidated Financial Information Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended September 30, 2020, Group revenue was flat, but operating profit and net profit attributable to owners significantly increased due to fair value gains on financial assets, offset by other comprehensive losses from foreign currency translation differences Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary | Indicator | 2020 (RMB thousand) | 2019 (RMB thousand) | Change | | :------------------------------------ | :------------------ | :------------------ | :-------- | | Revenue | 898,957 | 899,318 | -0.04% | | Gross Profit | 539,888 | 587,853 | -8.2% | | Other Net Income | 1,355,193 | 223,802 | 505.5% | | Operating Profit | 1,240,301 | 246,926 | 402.3% | | Net Finance (Expenses)/Income | (21,975) | 4,197 | Negative to Positive | | Profit Before Income Tax | 1,204,666 | 253,424 | 375.4% | | Income Tax Expense | (91,073) | (66,990) | 35.9% | | Profit for the Period | 1,113,593 | 186,434 | 497.3% | | Profit Attributable to Owners of the Company | 1,116,183 | 188,107 | 493.4% | | Other Comprehensive (Loss)/Income (net of tax) | (199,873) | 207,062 | Negative to Positive | | Total Comprehensive Income for the Period | 913,720 | 393,496 | 132.2% | | Basic/Diluted Earnings Per Share (RMB cents) | 19.04 | 3.21 | 493.1% | - The significant increase in other net income was primarily due to fair value changes in financial instruments at fair value through profit or loss[133] - Foreign currency translation differences for foreign operations resulted in an other comprehensive loss of RMB 199,873 thousand for the current period, compared to a gain in the prior period[136] Interim Condensed Consolidated Statement of Financial Position As of September 30, 2020, Group total assets grew to RMB 12,548 million, driven by increases in financial assets at fair value through profit or loss (non-current) and cash and cash equivalents, with total equity also rising and current liabilities remaining stable Interim Condensed Consolidated Statement of Financial Position Summary | Indicator | September 30, 2020 (RMB thousand) | March 31, 2020 (RMB thousand) | Change | | :------------------------------------ | :------------------------- | :------------------------- | :-------- | | Assets | | | | | Total Non-Current Assets | 5,763,520 | 4,954,441 | 16.3% | | - Financial assets at fair value through profit or loss | 4,576,815 | 3,688,063 | 24.1% | | Total Current Assets | 6,784,534 | 6,735,055 | 0.7% | | - Cash and cash equivalents | 2,993,280 | 2,063,150 | 45.1% | | Total Assets | 12,548,054 | 11,689,496 | 7.3% | | Equity | | | | | Capital and Reserves Attributable to Owners of the Company | 11,370,695 | 10,611,650 | 7.2% | | Total Equity | 11,370,584 | 10,615,854 | 7.1% | | Liabilities | | | | | Total Non-Current Liabilities | 355,050 | 281,695 | 26.0% | | Total Current Liabilities | 822,420 | 791,947 | 3.8% | | Total Liabilities | 1,177,470 | 1,073,642 | 9.7% | - Among non-current assets, financial assets at fair value through profit or loss showed significant growth, reflecting an increase in the value of the investment portfolio[139] - Cash and cash equivalents substantially increased, indicating ample liquidity for the Group[139] Interim Condensed Consolidated Statement of Changes in Equity For the six months ended September 30, 2020, equity attributable to owners increased from RMB 10,611,650 thousand to RMB 11,370,695 thousand, primarily due to significant profit for the period, despite negative impacts from other comprehensive losses and dividends paid Interim Condensed Consolidated Statement of Changes in Equity Summary | Indicator | September 30, 2020 (RMB thousand) | March 31, 2020 (RMB thousand) | | :------------------------------------ | :------------------------- | :------------------------- | | Balance at Beginning of Period | 10,611,650 | 10,611,650 | | Profit for the Period | 1,116,183 | 1,116,183 | | Other Comprehensive Loss | (199,873) | (199,873) | | Total Comprehensive Income | 916,310 | 916,310 | | Related to 2019/20 Final Dividend | (158,702) | (158,702) | | Share Option Scheme | 1,437 | 1,437 | | Disposal of a Non-Wholly Owned Subsidiary | (1,725) | (1,725) | | Balance at End of Period | 11,370,695 | 11,370,695 | - Profit for the period of RMB 1,116,183 thousand was the primary driver of equity growth[147] - Other comprehensive loss of RMB 199,873 thousand and final dividends paid of RMB 158,702 thousand had a negative impact on equity[147] Interim Condensed Consolidated Statement of Cash Flows For the six months ended September 30, 2020, Group cash and cash equivalents increased by RMB 1,011,378 thousand, primarily driven by strong cash inflows from investing activities, despite net cash outflow from operating activities and increased financing cash outflows Interim Condensed Consolidated Statement of Cash Flows Summary | Indicator | 2020 (RMB thousand) | 2019 (RMB thousand) | | :------------------------------------ | :------------------ | :------------------ | | Net Cash Used in Operating Activities | (60,989) | (103,447) | | Net Cash From Investing Activities | 1,320,204 | 127,267 | | Net Cash Used in Financing Activities | (247,837) | (239,207) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 1,011,378 | (215,387) | | Cash and Cash Equivalents at Beginning of Period | 2,063,150 | 766,722 | | Cash and Cash Equivalents at End of Period | 2,993,280 | 556,436 | - Net cash from investing activities significantly increased to RMB 1,320,204 thousand, primarily from proceeds from disposal of financial assets at fair value through profit or loss[149] - Cash outflow from operating activities decreased but remained a net outflow; cash outflow from financing activities slightly increased, mainly due to dividends paid and repayment of bank borrowings[149] Notes to the Interim Condensed Consolidated Financial Information General Information and Basis of Preparation This section outlines China Dongxiang Group's core business in sportswear brand development, design, and sales, alongside investment activities, with interim condensed consolidated financial information prepared under IAS 34, considering COVID-19 impacts on valuations - The Group is principally engaged in brand development, design, and sales of sports-related apparel, footwear, and accessories, as well as investment activities in Mainland China and overseas[152] - This interim condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting, taking into account the latest developments of the COVID-19 pandemic and its impact on the Group's business operations[156] - This interim condensed consolidated financial information should be read in conjunction with the Group's annual financial statements for the year ended March 31, 2020[156] Changes in Accounting Policies and Estimates During the period, the Group adopted new and revised IFRS, early adopting IFRS 16 amendments for COVID-19 related rent concessions, resulting in RMB 1,918,000 in negative variable lease payments, with financial statement preparation involving management judgment and estimates - The Group adopted several new and revised standards, including IAS 1 and IAS 8 (Amendments) "Definition of Material" and IFRS 3 (Amendments) "Definition of a Business"[162] - The Group elected to early adopt IFRS 16 (Amendment) "COVID-19-Related Rent Concessions" and applied the practical expedient to eligible lease arrangements[163] - For the six months ended September 30, 2020, an amount of RMB 1,918,000 was recognized in profit or loss as negative variable lease payments[163] - The preparation of interim condensed consolidated financial information requires management to make judgments, estimates, and assumptions regarding the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses[166] Financial Risk Management and Financial Instruments The Group faces market (currency and price), credit, and liquidity risks, using an expected credit loss model for credit risk, with fair value measurements employing a three-level hierarchy where Level 3 instruments significantly impact Group earnings - The Group's activities expose it to market risk (including foreign currency risk and price risk), credit risk, and liquidity risk, with no changes in risk management policies since March 31, 2020[167][168] - Credit risk primarily arises from loans receivable and trade receivables, and the Group adopts an "expected credit loss" model for impairment assessment[169] Fair Value Hierarchy for Financial Assets and Liabilities (as of September 30, 2020) | Category | Level 1 (RMB thousand) | Level 2 (RMB thousand) | Level 3 (RMB thousand) | Total (RMB thousand) | | :----------------------- | :----------------- | :----------------- | :----------------- | :---------------- | | Financial Assets | | | | | | Financial assets at fair value through profit or loss | | | | | | - Private Equity Fund Investments | — | — | 4,948,123 | 4,948,123 | | - Other Unlisted Investments | — | 42,536 | 379,947 | 422,483 | | - Listed Equity Securities — Equities | 1,121,404 | — | — | 1,121,404 | | - Listed Perpetual Bonds | 418,890 | — | — | 418,890 | | - Listed Debt Securities | 23,253 | — | — | 23,253 | | - Unlisted Fixed Rate Notes | — | — | 101,617 | 101,617 | | Total Financial Assets | 1,563,547 | 42,536 | 5,429,687 | 7,035,770 | | Financial Liabilities | | | | | | Derivative Instruments | — | — | (91,984) | (91,984) | Level 3 Instruments Movement (for the six months ended September 30, 2020) | Indicator | Financial Assets at Fair Value Through Profit or Loss (RMB thousand) | Derivative Instruments (RMB thousand) | Total (RMB thousand) | | :------------------------------------ | :-------------------------------------------- | :-------------------- | :---------------- | | Balance at April 1, 2020 | 4,514,638 | (29,616) | 4,485,022 | | Acquisitions | 1,266,046 | — | 1,266,046 | | Disposals | (936,306) | — | (936,306) | | Other Net Income | 648,004 | (64,800) | 583,204 | | Currency Translation Differences | (62,695) | 2,432 | (60,263) | | Balance at September 30, 2020 | 5,429,687 | (91,984) | 5,337,703 | - Level 3 fair value measurements primarily include private equity fund investments, other unlisted investments, unlisted fixed-rate notes, and wealth management products, whose valuation methods and unobservable input data significantly impact fair value[182][199][200] Segment Information The Group operates three main segments: China Apparel, Japan Apparel, and Investment; China Apparel showed good revenue and operating profit, Japan Apparel's revenue declined and operating loss widened, while the Investment segment contributed most operating profit - The Group primarily operates three reportable segments: China Apparel (including Kappa brand and other sports-related products), Japan Apparel (including Kappa, Phenix, and other brands), and Investment (financial assets and wealth management products)[205][206][207] Segment Results (for the six months ended September 30, 2020) | Indicator | China — Apparel (RMB thousand) | Japan — Apparel (RMB thousand) | Investment (RMB thousand) | Total (RMB thousand) | | :------------------- | :----------------------- | :----------------------- | :---------------- | :---------------- | | Revenue from External Customers | 814,788 | 84,169 | — | 898,957 | | Segment Gross Profit | 567,482 | (27,594) | — | 539,888 | | Other Net Income | 16,229 | 78,127 | 1,260,837 | 1,355,193 | | Segment Operating Profit/(Loss) | 64,694 | (59,781) | 1,235,388 | 1,240,301 | | Profit/(Loss) for the Period | 18,831 | (56,798) | 1,151,560 | 1,113,593 | Segment Assets and Liabilities (as of September 30, 2020) | Indicator | China — Apparel (RMB thousand) | Japan — Apparel (RMB thousand) | Investment (RMB thousand) | Total (RMB thousand) | | :------------------- | :----------------------- | :----------------------- | :---------------- | :---------------- | | Segment Assets | 1,911,360 | 172,380 | 10,464,314 | 12,548,054 | | Segment Liabilities | 633,910 | 78,949 | 464,611 | 1,177,470 | - The investment segment contributed the vast majority of operating profit and profit for the period, demonstrating its critical role in the Group's overall performance[209] Analysis of Other Net Income and Expenses The Group's other net income significantly increased, primarily from fair value changes in financial instruments, while key expense items like advertising, employee compensation, and right-of-use asset depreciation also saw changes Other Net Income (for the six months ended September 30, 2020) | Item | 2020 (RMB thousand) | 2019 (RMB thousand) | Change | | :------------------------------------ | :------------------ | :------------------ | :-------- | | Fair value changes of financial instruments at fair value through profit or loss | 946,215 | 54,146 | 1647.2% | | Investment income from financial assets at fair value through profit or loss | 143,960 | 54,089 | 166.2% | | Gain on disposal of financial assets at fair value through profit or loss | 139,072 | 26,615 | 422.5% | | Gain on disposal of Kappa trademark | 75,378 | — | New | | Interest income from loans receivable | 31,179 | 31,085 | 0.3% | | Government grants income | 15,445 | 49,636 | -68.9% | | Brand usage rights income | 2,189 | 652 | 235.7% | | Others | 1,755 | 7,579 | -76.8% | | Total | 1,355,193 | 223,802 | 505.5% | Expenses Presented by Nature (for the six months ended September 30, 2020) | Item | 2020 (RMB thousand) | 2019 (RMB thousand) | Change | | :------------------------------------ | :------------------ | :------------------ | :-------- | | Cost of inventories recognized as cost of sales | 335,303 | 337,260 | -0.6% | | Advertising and marketing expenses | 391,080 | 337,989 | 15.7% | | Employee compensation and benefits expenses | 84,697 | 91,759 | -7.7% | | Impairment of property, plant and equipment and right-of-use assets | 34,106 | — | New | | Depreciation of right-of-use assets | 28,813 | 23,532 | 22.4% | | Logistics and transportation costs | 27,851 | 27,478 | 1.4% | | Inventory impairment provision/(reversal) | 23,254 | (26,468) | Negative to Positive | | Product design and development expenses | 19,568 | 20,783 | -5.9% | | Short-term lease rentals and variable lease payments not included in lease liabilities and rent-related expenses | 17,297 | 22,429 | -22.8% | | Depreciation of property, plant and equipment and amortization of intangible assets | 10,185 | 10,563 | -3.6% | | Travel and entertainment expenses | 3,338 | 8,846 | -62.3% | | Auditor's remuneration | 1,800 | 1,800 | 0.0% | | Professional fees | 2,810 | 1,697 | 65.6% | | Others | 36,569 | 18,365 | 99.1% | | Total | 1,016,671 | 876,033 | 16.0% | Net Finance (Expenses)/Income and Income Tax Expense The Group's net finance shifted from income to expense due to exchange losses, and while income tax expense increased, the effective tax rate significantly decreased due to profit structure changes, with China corporate and withholding taxes being primary, and Japan paying minimum resident tax due to losses Net Finance (Expenses)/Income (for the six months ended September 30, 2020) | Item | 2020 (RMB thousand) | 2019 (RMB thousand) | | :--------------- | :------------------ | :------------------ | | Finance Income: | | | | - Net exchange gains | — | 5,438 | | - Interest income | 2,581 | 4,781 | | Subtotal | 2,581 | 10,219 | | Finance Expenses: | | | | - Net exchange losses | (17,038) | — | | - Interest expense | (4,729) | (3,768) | | - Interest on lease liabilities | (2,532) | (2,017) | | - Others | (257) | (237) | | Subtotal | (24,556) | (6,022) | | Net Finance (Expenses)/Income | (21,975) | 4,197 | Income Tax Expense (for the six months ended September 30, 2020) | Item | 2020 (RMB thousand) | 2019 (RMB thousand) | | :--------------- | :------------------ | :------------------ | | Current Income Tax | | | | - China Corporate Income Tax | 6,945 | 9,282 | | - Japan Tax | (1,300) | 649 | | Deferred Income Tax | 85,428 | 57,059 | | Total | 91,073 | 66,990 | - The Group's income tax expense was RMB 91,073 thousand, with an effective tax rate of 7.6%, a significant decrease from 26.5% in the prior year[231] - The China corporate income tax rate is 25%, with a 15% rate for subsidiaries in the Tibet Autonomous Region; the Group has provided deferred tax liabilities of RMB 173,265 thousand for future distributed profits of its Chinese subsidiaries[235][236] - Japanese subsidiaries, having not recorded taxable profits, were only required to pay the minimum resident tax amount[237] Earnings Per Share and Dividends For the six months ended September 30, 2020, both basic and diluted earnings per share significantly increased to RMB 19.04 cents, with the Board recommending an interim dividend of RMB 5.69 cents per share, totaling approximately RMB 334,920 thousand Basic Earnings Per Share (for the six months ended September 30, 2020) | Indicator | 2020 (RMB thousand) | 2019 (RMB thousand) | | :------------------------------------ | :------------------ | :------------------ | | Profit Attributable to Owners of the Company | 1,116,183 | 188,107 | | Weighted Average Number of Ordinary Shares in Issue (thousand shares) | 5,863,071 | 5,863,071 | | Basic Earnings Per Share (RMB cents) | 19.04 | 3.21 | Diluted Earnings Per Share (for the six months ended September 30, 2020) | Indicator | 2020 (RMB thousand) | 2019 (RMB thousand) | | :------------------------------------ | :------------------ | :------------------ | | Profit Attributable to Owners of the Company | 1,116,183 | 188,107 | | Weighted Average Number of Ordinary Shares in Issue for Basic EPS (thousand shares) | 5,863,071 | 5,863,071 | | Adjustment for Granted and Assumed Exercised Share Options (thousand options) | 38 | 176 | | Diluted Earnings Per Share (RMB cents) | 19.04 | 3.21 | Dividends (for the six months ended September 30, 2020) | Item | 2020 (RMB thousand) | 2019 (RMB thousand) | | :------------------------------------ | :------------------ | :------------------ | | Final dividend paid of RMB 0.91 cents per share | 52,719 | 115,368 | | Final special dividend paid of RMB 1.84 cents per share | 106,597 | 28,842 | | Proposed interim dividend of RMB 5.69 cents per share | 334,920 | 56,507 | | Proposed interim special dividend of RMB 0 cents per share | — | 38,260 | | Total | 494,236 | 238,977 | - The total dividends paid for the six months ended September 30, 2020, amounted to RMB 159,316 thousand or RMB 2.75 cents per share[250] Details of Asset Changes This section details changes in property, plant and equipment, intangible assets, and right-of-use assets; PPE net book value decreased, intangible assets reduced due to Kappa Japan trademark sale, right-of-use assets varied with additions and impairments, and lease-related cash outflows increased Property, Plant and Equipment Net Book Value Movement (for the six months ended September 30, 2020) | Item | April 1, 2020 (RMB thousand) | Additions (RMB thousand) | Disposals (RMB thousand) | Depreciation (RMB thousand) | Impairment (RMB thousand) | Exchange Differences (RMB thousand) | September 30, 2020 (RMB thousand) | | :--------------- | :------------------------ | :---------------- | :---------------- | :---------------- | :---------------- | :-------------------- | :------------------------- | | Land | 25,237 | — | — | — | — | (843) | 24,394 | | Buildings | 54,278 | — | — | (2,307) | (208) | (1,041) | 50,722 | | Office Furniture and Equipment | 10,161 | 1,367 | (299) | (1,581) | (5,030) | (101) | 4,517 | | Motor Vehicles | 319 | 8 | (7) | (71) | — | — | 249 | | Leasehold Improvements | 6,989 | — | (155) | (1,372) | (4,677) | (119) | 666 | | Total | 96,984 | 1,375 | (461) | (5,331) | (9,915) | (2,104) | 80,548 | Intangible Assets Net Book Value Movement (for the six months ended September 30, 2020) | Item | April 1, 2020 (RMB thousand) | Additions (RMB thousand) | Disposals (RMB thousand) | Amortization (RMB thousand) | Exchange Differences (RMB thousand) | September 30, 2020 (RMB thousand) | | :--------------- | :------------------------ | :---------------- | :---------------- | :---------------- | :-------------------- | :------------------------- | | Kappa Trademarks | 194,895 | — | (13,524) | (3,756) | (238) | 177,377 | | Phenix and Other Brands | 6,473 | — | — | (109) | — | 6,364 | | Computer Software | 4,212 | 224 | — | (989) | (6) | 3,441 | | Total | 205,580 | 224 | (13,524) | (4,854) | (244) | 187,182 | - The Group derecognized intangible assets with a net book value of RMB 13,524 thousand due to the disposal of Kappa Japan trademarks and miscellaneous intellectual property assets, recognizing a gain of RMB 75,378 thousand[264] Right-of-Use Assets Movement (for the six months ended September 30, 2020) | Item | April 1, 2020 (RMB thousand) | Additions (RMB thousand) | Disposals (RMB thousand) | Depreciation Expense (RMB thousand) | Impairment (RMB thousand) | Exchange Differences (RMB thousand) | September 30, 2020 (RMB thousand) | | :--------------- | :------------------------ | :---------------- | :---------------- | :-------------------- | :---------------- | :-------------------- | :------------------------- | | Right-of-Use Assets | 100,161 | 49,172 | (2,417) | (28,813) | (24,191) | (581) | 93,331 | - Total cash outflow for leases for the six months ended September 30, 2020, was approximately RMB 48,654 thousand, an increase from RMB 37,266 thousand in the prior period[278] Investments Accounted for Using the Equity Method and Trade Receivables and Payables Investments accounted for using the equity method decreased in carrying value, mainly due to shared losses; net trade receivables increased, primarily from third parties, with reduced impairment provisions, while total trade payables rose, reflecting supply chain activity changes Investments Accounted for Using the Equity Method Movement (for the six months ended September 30, 2020) | Item | 2020 (RMB thousand) | 2019 (RMB thousand) | | :--------------- | :------------------ | :------------------ | | Beginning of Period | 117,173 | 151,680 | | Additions | 1,000 | — | | Disposals | — | (8) | | Share of (Loss)/Profit | (13,660) | 2,301 | | Offset of Unrealized Profit | 721 | 2,033 | | Reclassified as Assets Held for Sale | — | (7,971) | | Exchange Differences | (1,121) | 1,434 | | End of Period | 104,113 | 149,469 | Net Trade Receivables (as of September 30, 2020) | Item | September 30, 2020 (RMB thousand) | March 31, 2020 (RMB thousand) | | :--------------- | :------------------------- | :------------------------- | | Trade Receivables | | | | - Third Parties | 182,626 | 146,623 | | - Related Parties | 22,627 | 33,903 | | Subtotal | 205,253 | 180,526 | | Less: Impairment Provision | (20,273) | (39,463) | | Net Trade Receivables | 184,980 | 141,063 | - The average turnover days for trade receivables decreased, primarily due to increased sales revenue in the current period[76] Trade Payables Aging Analysis (as of September 30, 2020) | Aging | September 30, 2020 (RMB thousand) | March 31, 2020 (RMB thousand) | | :------------- | :------------------------- | :------------------------- | | Within 30 days | 88,270 | 76,338 | | 31 to 180 days | 110,240 | 61,738 | | Over 180 days | 10,792 | 10,398 | | Total | 209,302 | 148,474 | Other Financial Assets and Accrued Expenses Other financial assets at amortized cost include loans to third parties and key management, with RMB 698 million in third-party loans secured by collateral; accrued expenses and other payables remained stable, comprising salaries, taxes, supplier deposits, and related party amounts Other Financial Assets at Amortized Cost (as of September 30, 2020) | Item | September 30, 2020 (RMB thousand) | March 31, 2020 (RMB thousand) | | :--------------- | :------------------------- | :------------------------- | | Current Portion: | | | | Loans Receivable | 479,368 | 573,126 | | Loans to Related Parties | 14,606 | 14,606 | | Others | 87,324 | 97,988 | | Less: Impairment Provision | (36,546) | (20,922) | | Total | 544,752 | 664,798 | | Non-Current Portion: | | | | Loans Receivable | 219,526 | 126,591 | | Loans to Key Management Personnel | 298,737 | 315,467 | | Less: Impairment Provision | — | — | | Total | 518,263 | 442,058 | - As of September 30, 2020, the total amount of loans receivable from third parties was approximately RMB 698,894 thousand, with annual interest rates ranging from 8% to 11%, secured by collateral such as equity, private equity fund investments, and properties[291] Accrued Expenses and Other Payables (as of September 30, 2020) | Item | September 30, 2020 (RMB thousand) | March 31, 2020 (RMB thousand) | | :--------------- | :------------------------- | :------------------------- | | Current Portion: | | | | Salaries and Welfare Payable | 17,643 | 19,615 | | Other Taxes and Levies Payable | 17,837 | 9,215 | | Refund Liabilities | 13,383 | 24,371 | | Supplier Deposits | 76,600 | 73,087 | | Amounts Payable to Related Parties | 28,119 | 37,620 | | Marketing Expenses Payable | 37,631 | 38,286 | | Logistics Expenses Payable | 14,539 | 12,205 | | Professional Fees Payable | 3,702 | 5,842 | | Others | 44,364 | 37,185 | | Subtotal | 253,818 | 257,426 | | Non-Current Portion: | | | | Other Payables | — | 1,245 | | Total | 253,818 | 258,671 | Share Capital, Share Schemes and Borrowings Group share capital and share premium remained stable, with no change in shares held by the employee share scheme; the 2019 share option scheme granted multiple options to management and employees, recognizing corresponding employee service value, while total borrowings decreased due to reduced secured bank loans Share Capital and Share Premium Account (as of September 30, 2020) | Item | Number of Ordinary Shares | Nominal Value of Issued Ordinary Shares (HKD thousand) | Equivalent Nominal Value of Ordinary Shares (RMB thousand) | Share Premium Account (RMB thousand) | Total (RMB thousand) | | :--------------- | :---------------- | :------------------------ | :-------------------------- | :---------------------- | :---------------- | | As of September 30, 2020 | 5,886,121,025 | 58,862 | 56,466 | 1,033,539 | 1,090,005 | Shares Held by Employee Share Scheme (as of September 30, 2020) | Item | Number of Shares | Value (RMB thousand) | | :--------------- | :---------------- | :---------------- | | Shares held by Employee Share Scheme | 23,050,071 | 196 | - The 2019 Share Option Scheme granted multiple tranches of share options to management and employees, with RMB 1,437 thousand recognized as employee service value for the six months ended September 30, 2020[300][307] Borrowings (as of September 30, 2020) | Item | September 30, 2020 (RMB thousand) | March 31, 2020 (RMB thousand) | | :--------------- | :------------------------- | :------------------------- | | Bank Loans | | | | - Secured | 130,026 | 196,647 | | Loans from a Company | | | | - Unsecured and Interest-Free | 47,734 | 49,661 | | Total | 177,760 | 246,308 | - Secured bank loans are collateralized by equivalent assets held by banks, including USD, JPY, and HKD loans[309] Commitments and Related Party Transactions The Group has multiple capital commitments, primarily investment pledges in private equity funds totaling approximately RMB 500 million; related party transactions include sales to joint ventures, interest income, commissions, and loans to management, all conducted on a mutually agreed basis - As of September 30, 2020, the Group had future minimum lease payments under non-cancellable short-term leases of RMB 14,064 thousand[313] - The Group has various capital commitments, including investment commitments to private equity funds such as Shanghai Xianghe Yongyuan, Hangzhou Hanyun Xinling, Yunfeng Fund III, Persistent Edge China Partners, Ltd., and CR Tech Investment Limited, with total outstanding commitments of approximately RMB 500 million[315][316] Transactions with Related Parties (for the six months ended September 30, 2020) | Item | 2020 (RMB thousand) | 2019 (RMB thousand) | | :--------------- | :------------------ | :------------------ | | Sales of goods to the Group's joint ventures | 4,977 | 5,400 | | Interest income from loans to the Group's joint ventures | 163 | 142 | | Interest income from loans to management personnel | 2,489 | 3,299 | | Commissions to the Group's joint ventures | 48,683 | 39,519 | | Loans granted to the Group's joint ventures | 15,000 | — | | Repayment of loans by the Group's joint ventures | 15,000 | — | Balances with Related Parties (as of September 30, 2020) | Item | September 30, 2020 (RMB thousand) | March 31, 2020 (RMB thousand) | | :--------------- | :------------------------- | :------------------------- | | Trade receivables — The Group's joint ventures | 22,627 | 33,903 | | Other financial assets — Non-current portion — Management personnel | 298,737 | 315,467 | | Accrued expenses and other payables — The Group's joint ventures | 28,119 | 37,620 | Key Management Compensation (for the six months ended September 30, 2020) | Item | 2020 (RMB thousand) | 2019 (RMB thousand) | | :--------------- | :------------------ | :------------------ | | Salaries, bonuses and other benefits | 5,433 | 4,878 | | Pension schemes — Defined contribution plans | 8 | 81 | | Total | 5,441 | 4,959 | Events After the Reporting Period After the reporting period, on October 7, 2020, the Group entered an agreement with Shifune Co., Ltd., granting exclusive rights to use the "Phenix" trademark in Japan, South Korea, and parts of Europe for three years and three months, further focusing on the China market - On October 7, 2020, the Group entered into an agreement with Shifune Co., Ltd., granting exclusive rights to use the "Phenix" trademark in Japan, South Korea, and parts of Europe for a period of three years and three months[330] - This move aims to consolidate resources and marketing efforts, striving to become one of China's top sportswear companies and further focusing on the China market[330]