Financial Data and Key Metrics Changes - In 2023, total revenue grew by 10.9% to JPY 14.346 billion, marking a historical high [11] - Core Xtep brand revenue increased by 7.4% to JPY 11.947 billion, while new brands, including Saucony and Merrell, saw revenue growth of nearly 100% at almost JPY 800 million [12] - The group's profit reached a historical high of JPY 1.03 billion, up 11.8% year on year, with a net profit margin of 7.2% [13][17] - Inventory decreased significantly by 21.6% to JPY 1.794 billion, indicating improved inventory management [14][21] Business Line Data and Key Metrics Changes - The core Xtep brand achieved a retail sell-through growth of 20% year on year, with inventory turnover days at a healthy level of 4 to 4.5 months [6][10] - The Professional Sports segment, including Saucony and Merrell, reported nearly 100% revenue growth, with Saucony becoming the first profitable brand among the four brands [12][26] - The Athletia segment experienced a revenue growth of 14.3% [12] Market Data and Key Metrics Changes - In the China region, Saucony's revenue growth exceeded 200%, reaching JPY 465 million [12] - The athleisure segment, including K Swiss and Palladium, saw a revenue growth of 14.3%, primarily driven by the Chinese market [27] - The gross margin for the athleisure segment improved from 37.6% to 44.8% due to increased direct-to-consumer (DTC) sales [28] Company Strategy and Development Direction - The company aims to maintain its position as the number one running brand in China, focusing on product innovation and expanding its market segment [35][50] - The strategy includes leveraging synergies between core and new brands, with a focus on high-end markets for new brands [8][51] - The company plans to continue enhancing its offline store experience while expanding its online presence [50] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2023 was a challenging year but expressed confidence in achieving considerable growth despite a difficult economic environment in 2024 [17][24] - The target for 2024 is a revenue growth of no less than 10%, with a focus on maintaining healthy inventory levels [18][24] - Management noted that the consumption situation remains uncertain, but they are prepared to react quickly to market changes [24] Other Important Information - The company has maintained a consistent dividend payout ratio of 50% since its listing in 2008 [15] - Operating cash net inflow grew by 1.2 times to JPY 1.255 billion, exceeding net profit [15] - The company has successfully remitted JPY 1 billion to Hong Kong for dividend payouts and debt repayment [20] Q&A Session Summary Question: What are the growth prospects for Saucony and Merrell? - Management indicated that Saucony and Merrell are expected to achieve significant growth in 2024, with sales targets set at 30% to 40% growth [26] Question: How does the company plan to manage inventory levels? - The company emphasized the importance of maintaining healthy inventory levels and has successfully reduced inventory by 21.6% [14][21] Question: What are the expectations for the athleisure segment in 2024? - Management stated that while the athleisure segment will continue to incur losses, they will control the amount of loss to ensure it does not exceed previous years [30]

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]