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Page 1: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear
Page 2: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Disclaimer

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These presentation slides have been prepared by ANTA Sports Products Limited (the "Company") solely for use during its presentation held in connection with its results for the 6 months ended 30 June 2015 and may not be taken away, reproduced or redistributed. In particular, these presentation slides should not be transmitted into the United States or distributed in the United States, and they should not be distributed to any U.S. person (as defined in Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act")). The shares of the Company have not been, and will not be, registered under the Securities Act or the Securities Laws of any state of the United States or other jurisdiction and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any applicable state or local securities laws. These presentation slides are only addressed to and directed at persons in member states of the European Economic Area who are "qualified investors". In addition, in the United Kingdom, these presentation slides are being presented only to, and is directed only at persons (i) who have professional experience in matters relating to investments, or (ii) to whom it may otherwise lawfully be communicated (all such persons in the United Kingdom who are also Qualified Investors being referred to as "relevant persons"). These presentation slides must not be acted on or relied on by persons who are not "relevant persons" and persons who are not Qualified Investors. The distribution of these presentation slides into other jurisdictions may be restricted by law. By attending this presentation you represent, warrant and undertake that: (i) you are agreeing to be bound by the foregoing restrictions; (ii) you will treat and safeguard as strictly private and confidential these presentation and its contents and any comments made during the presentation and (iii) you will not at any time have any discussion, correspondence or contact concerning the information in these presentation with any person. This presentation is not a prospectus and does not constitute or form part of any offer or invitation to purchase or subscribe for, or any solicitation of any offer to purchase or subscribe for any securities of the Company nor shall it (or any part of it), or the fact of its distribution, form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of the Company. This shall not constitute and offer to buy or sell any securities of the Company within the United States or to "US Persons", as defined in Regulation S promulgated under the Securities Act. The information contained herein is for discussion purposes only and does not purport to contain all the information that may be required to evaluate the Company or its financial position. If you are considering engaging in investment activity, you should seek appropriate independent financial advice and make your own assessment. These presentation slides (and any subsequent discussion arising thereon) may contain certain projections and forward looking statements with respect to the financial condition, results of operations and business of the Company and certain plans and objectives of the management of the Company which involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance of the Company to be materially different from any future results or performance expressed or implied by such projections or forward looking statements. Such forward looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the political and economic environment in which the Company will operate in the future. The information contained in these presentation slides has not been independently verified. Some of the information is still in draft form and will only be finalised at the time of publication of the Company’s report for the year ended 31 December 2015. The information and opinions in these presentation slides are provided as at the date of this presentation and are subject to change without notice. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of the Company nor any of its directors, affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of these materials.

Page 3: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

FINANCIAL OVERVIEW

Lin Qingfeng (left), Lu Xiaojun (middle) &

Liao Hui (right), Olympic Weightlifting Champions

Page 4: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Financial Highlights

2015 1H 2014 1H Changes

(RMB million) (RMB million) (%)

Revenue 5,109.8 4,121.9 24.0

Gross profit 2,382.0 1,860.0 28.1

Profit from operations 1,266.9 986.1 28.5

Profit attributable to equity shareholders 965.3 802.8 20.2

Free cash inflow 952.5 824.8 15.5

(RMB cents) (RMB cents) (%)

Basic earnings per share 38.65 32.17 20.1

(HK cents) (HK cents) (%)

Interim dividend per share 30 25 20.0

(%) (%) (p.p.)

Gross profit margin 46.6 45.1 1.5

Operating profit margin 24.8 23.9 0.9

Margin of profit attributable to equity shareholders 18.9 19.5 0.6

Dividend payout ratio 62.8 61.9 0.9

4

Page 5: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Revenue

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Revenue by product

2015 1H 2014 1H Changes

(RMB million) (RMB million) (%)

Footwear 2,400.5 2,009.5 19.5

Apparel 2,471.5 1,939.4 27.4

Accessories 237.8 173.0 37.5

Overall 5,109.8 4,121.9 24.0

in revenue > in order value of 2015 1H trade fairs for ANTA products as

announced before because:

Growth of other businesses are relatively strong

Revenue by product

2015 1H 2014 1H Changes

(% of revenue) (% of revenue) (p.p.)

Footwear 47.0 48.7 1.7

Apparel 48.4 47.1 1.3

Accessories 4.6 4.2 0.4

Overall 100.0 100.0

Accessories

Footwear Apparel

Page 6: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

GP Margin

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GP by product

2015 1H 2014 1H Changes (%) GP (RMB million)

Footwear 1,099.5 944.6 16.4

Apparel 1,192.8 850.1 40.3

Accessories 89.7 65.3 37.4

Overall 2,382.0 1,860.0 28.1

GP margin by product

2015 1H 2014 1H Changes (p.p.) GP margin (%)

Footwear 45.8 47.0 1.2

Apparel 48.3 43.8 4.5

Accessories 37.7 37.7 -

Overall 46.6 45.1 1.5

GP Margin 1.5p.p. to 46.6%

in footwear GP margin due to:

Strategically launched more value-for-money high-performance footwear products

Offsetting by FILA’s better retail discounts

in appeal GP margin due to:

Petrochemical prices

FILA’s better retail discounts

Page 7: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Operating Expenses

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A&P expenses %* 0.2p.p.

to 11.0% due to:

Sponsorship activities

Staff costs %* 0.5p.p. to

11.1% contributed by:

Operational efficiency

R&D costs %# 1.0p.p. to

5.2% due to:

More R&D investments on functional products with advanced technologies

* In terms of revenue

# In terms of cost of sales

Operating Expenses Ratios

Page 8: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Profit Margins

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OP Margin 0.9p.p. to 24.8% Margin of Profit Attributable to Equity Shareholders 0.6p.p. to 18.9%

OP margin < GP margin due to:

Advertising & sponsorship activities

Impact of provision for doubtful debts

Margin of profit attributable to equity shareholders due to:

Net finance income

Effective tax rate

Page 9: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Effective Tax Rate

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Effective Tax Rate

Effective tax rate 1.2p.p.

to 26.4% due to:

Certain subsidiaries achieved stronger business growth during the financial period & their profits are taxed at standard income tax rate

Page 10: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Working Capital Management

2015 1H 2014 1H Changes (days) In 181 days In 181 days

Average inventory turnover days 57 59 2

Average trade receivables turnover days 33 38 5

Average trade payables turnover days 42 69 27

10

Average inventory turnover days 2 days

Average trade receivables turnover days 5 days

Average trade payables turnover days 27 days

Represents a better managed cash generating process & a healthy operating cash inflow

Assets/Liabilities Turnover Days

Page 11: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Liquidity & Financial Resources

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2015 2014

(RMB million) (RMB million)

6 months ended 30 June

Operating cash inflow 1,146.9 983.0

Capital expenditures (194.4) (160.9)

Others - 2.7

Free cash inflow 952.5 824.8

As at 30 June

Cash & cash equivalents 4,453.1 4,401.3

Fixed deposits held at banks with maturity over 3 months 1,625.0 1,170.0

Pledged deposits 210.4 215.5

Other current financial assets 350.0 535.0

Bank loans (1,032.9) (1,023.2)

Net cash & cash equivalents as at 30 June 5,605.6 5,298.6

Operating cash inflow > profit attributable to equity shareholders

Represents effective cash generating process

Page 12: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

BUSINESS OVERVIEW

Rajon Rondo (left) & Chandler Parsons (right), point guard & small forward with the Dallas Mavericks of the NBA, respectively

Page 13: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Market Review

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China’s GDP maintained steady growth

To maintain economic growth momentum,

the Chinese government has continued its

economic reforms & implemented measures

to drive consumption & urbanisation

We leverage our strengths to win amid industry consolidation & to capture market opportunities

China’s economy in 2015 1H Sportswear industry - opportunities

China’s policymakers adopt measures to

accelerate the development of the sports

industry & to boost sport-related consumption

Stronger sportswear brands are expected to

gain market share amid improving livelihoods

& the growing popularity of sports in China

Page 14: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

ANTA is positioned as a functional sportswear

brand that focuses on popular sports in the

mass market, including basketball, running &

cross-training

In addition to building brand loyalty among

children through the ANTA Kids sportswear

series, we also launch “ANTA-NBA” co-

branded adult & kids products to cater to the

tremendous demand from NBA fans

Brand & Product Portfolio

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We diversify our brand & product portfolio to tap market potential

We leverage FILA’s high-end sports fashion brand position & differentiated products to tap potential in the high-end market

Page 15: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Brand Management

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ANTA represents China’s sports essence through the sponsorship of the COC, CSD, 24 China national teams & renowned Chinese athletes

Launched new advertising campaign for ANTA

cross-training product series

Named one of the "Best China Brands 2015"

for the 6th consecutive year by Interbrand

Kicked-off “RUN WITH ME” marketing

strategy & supported ultra-marathon runner

Chen Penbin in the “Challenge 100” event

ANTA’s “Challenge 100” functional running

shoes received an overwhelming response

Page 16: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Brand Management (cont’d)

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Enriched our portfolio of “ANTA-NBA” co-

branded series products by introducing the

2015 NBA All-Star Game and Finals editions

ANTA is a functional sportswear brand focusing on the mass market

Signed Golden State Warriors star shooting

guard & NBA Champion Klay Thompson

Tailor-made the designated “KT FIRE”

basketball shoe for Klay Thompson to help

him win his 1st NBA title

Page 17: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Kids Sportswear Series

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Our Kids sportswear series is well-received & well-positioned to maintain market leadership due to its good credibility & affordability

Offer stylish, protective & comfortable Kids

sportswear series featuring our advanced

technologies for children aged 3-14

“ANTA-NBA” co-branded shoes and accessories

have been added to our Kids product portfolio

Number of Kids sportswear series stores

stood at 1,334 by the end of June 2015 (end

of 2014: 1,228)

Page 18: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

E-commerce Business

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Allow outstanding offline distributors to

operate webstores so as to maximise mutual

benefits between online & offline stores

Launch more online exclusive products to

prevent product cannibalisation

Our e-commerce business serves as a new, interactive platform that generates additional sales by promoting our brand & innovative value-

for-money products to both online & offline shoppers

Set up official online flagship store

(www.anta.cn) & operate self-owned webstores

on leading e-commerce platforms in China

Some webstores are managed by 3rd party

online retailers under our stringent control &

unified sales policies

Page 19: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Fila Business in the PRC

19

Enhancing FILA’s awareness through celebrity

seeding, e.g. “Where Are We Going, Dad?”

Number of FILA stores stood at 544 in China,

Hong Kong & Macao by the end of June 2015

(end of 2014: 519), including Hong Kong’s

newly-opened flagship store at iSQUARE

We continue to enhance FILA’s brand desirability, product offerings & store image to tap the promising potential in the high-end market

Launched 2 new product lines, FILA GINNY &

FILA RED as well as 2 new sub-brands, FILA

KIDS & FILA INTIMO

FILA’s new ambassador Chris Evans has

joined Shu Qi to promote FILA’s trendy

lifestyle brand image & stylish products

Page 20: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Distribution Network Management

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As store efficiency > store no., we have consolidated smaller, less

efficient stores while continuing to open bigger & more attractive stores in prime locations across China

End of Jun 2015

End of Dec 2014

Half-year Change

SSSG (2015 1H)

No. of ANTA stores 7,340 7,622 282 / 3.7% High single-

digit

2015 1H (in 181 days)

2014 1H (in 181 days)

Change

Average trade receivables turnover days 33 days 38 days 5 days

No. of ANTA stores while maintaining growth momentum in SSSG, which

means store profitability is improving

AR days shows our distributors are maintaining healthy cash flow

Page 21: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Product Innovation

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Launched “Challenge 100” functional running

shoes for professional runners, which are

selling at only RMB499

Introduced A-Web 3.0 technology, which

provides better cooling and ventilation

compared to A-Web 2.0

We provide innovative, high-quality & value-for-money sportswear products to customers & athletes

Introduced over 770, 1,540 & 640 new styles

of footwear, apparel & accessories,

respectively, in 2015 1H

ANTA’s footwear ranked as the top seller of

travel & sports shoes in China for 14th

consecutive year

Page 22: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Supply Chain & Production

22

Responsive to market conditions & changes in

consumer preferences through our strategic

mix of in-house & outsourced production

Self-production ratios in 2015 1H: footwear

47.6% & apparel 15.2% (2014 1H: 54.3% &

15.9%)

We maintain flexibility & efficiency in our supply chain to stay responsive to market changes & to better meet unforeseeable demand

Adjust production schedules & fulfill

replenishment orders in a timely & cost-

effective manner

Continue to strengthen our supply chain to

shorten production lead time

Support our supply chain partners to enhance

quality controls & workflow efficiency

Page 23: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

PROSPECTS

Chen Penbin, Chinese ultra-marathon runner

Page 24: Disclaimer - TodayIR · guard & NBA Champion Klay Thompson Tailor-made the designated “KT FIRE” basketball shoe for Klay Thompson to help him win his 1st NBA title . Kids Sportswear

Future Development

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Strengthen our brand influence with effective

marketing strategies, sponsorships & endorsers

Bolster sales through innovation e.g. launch of

A-Strata & expansion of potential businesses,

e.g. FILA, ANTA Kids, e-commerce, etc.

We are well-prepared to gain market share & to tap mid-to-long-term growth potential to achieve sustainable growth

Optimise our retail-oriented measures,

operations & supply chain to stay competitive

Targeted store numbers for 2015: 7,200-7,300

(ANTA); 1,400-1,500 (Kids); 550-600 (FILA)