FY 2019/20

INTERIM RESULTS

PRESENTATION

27 November 2019

PART ONE PART TWO

1 2Financial Review Business Review + Outlook

CONTENTS

Financial Review

Mr. Vincent Lui

Investment and Fund Management Director

4

Revenue 899 787 14.2%

Gross profit* 561 453 23.8%

Operating profit 247 229 7.9%

Operating profit excluding gains of investment

segment89 37 140.5%

Net profit attributable to owners of the

Company188 138 36.2%

1H19 1H18 YOY

Gross profit margin* 62.4% 57.6% 4.8ppts

Operating profit margin 27.5% 29.1% （1.6ppts）

Operating profit margin excluding gains of

investment segment9.9% 4.7% 5.2ppts

Net profit margin attributable to owners of the

Company 20.9% 17.5% 3.4ppts

Basic/Diluted earnings per share(RMB cents) 3.21 2.36 36.0%

Interim dividend and interim special dividend

per share (RMB cents)1.61 N.A. N.A.

RESULT HIGHLIGHTSAs at 30 September 2019 Unit: RMB million

*Before reversal of impairment of inventories

5

By regional market

China 749 638 83.5% 17.4%

Japan 150 149 16.7% 0.7%

Group 899 787 100% 14.2%

1H181H19 % YOY

KAPPA Adults

Offline 544 453 72.6% 20.1%

Directly-operated 332 262 44.3% 26.7%

Non directly-operate 212 191 28.3% 10.9%

E-commerce 117 96 15.4% 21.9%

Directly-operated 93 64 12.2% 45.3%

Non directly-operate 24 32 3.2% (25.0%)

KAPPA Kids 52 61 6.9% (14.8%)

Others 36 28 4.8% 28.6%

Total 749 638 100% 17.4%

1H19 1H18

As % of

sales of

China YOY

China

By channel

SALES ANALYSISAs at 30 September 2019 Unit: RMB million

6

GROSS PROFIT MARGIN ANALYSIS*As at 30 September 2019

By regional market

China 67.4% 62.1% 5.3ppts

Japan 37.3% 38.3% (1.0ppts)

Group 62.4% 57.6% 4.8ppts

1H19 1H18 YOY

Apparel 76.0% 68.1% 7.9ppts

Footwear 61.7% 53.7% 8.0ppts

Accessories 79.0% 82.2% (3.2ppts)

KAPPA Brand Total 73.0% 65.3% 7.7ppts

1H19 1H18 YOY

China

By products

*Before reversal of impairment of inventories

7

EXPENSES ANALYSISAs at 30 September 2019 Unit: RMB million

Advertising &

selling expenses

YoY

Employees’

salaries & benefits

YoY YoY

Design & product

development

China 317 266 19.2% 71 63 12.7% 11 13 （15.4%）

As % of total sales 35.3% 33.8% 1.5ppts 7.9% 8.0% （0.1ppt） 1.2% 1.7% （0.5ppt）

Japan 21 20 5.0% 21 22 （4.5%） 10 10 -

As % of total sales 2.3% 2.5% (0.2ppt) 2.3% 2.8% （0.5ppt） 1.1% 1.3% （0.2ppt）

Group 338 286 18.2% 92 85 8.2% 21 23 （8.7%）

As % of total sales 37.6% 36.3% 1.3ppts 10.2% 10.8% （0.6ppt） 2.3% 2.9% （0.6ppt）

19H 18H 19H 18H 19H 18H

8

CHINA OPERATING EFFICIENCY ANALYSIS

As at 30 September 2019

Net inventory 422 20.6%

Balance of trade receivables 145 8.2%

Balance of trade payables 174 43.8%

RMB million

Compared to end-of-march 2019

Inventory 290 +61 Days

Trade receivables 34 -10 Days

Trade payables 111 +43 Days

Turnover Days

Cash conversion cycle 213 + 8 Days

YOY

9

CHINA INVESTMENT INCOME ANALYSIS

As at 30 September 2019

By Income Source

Income from the sale of financial assets 26.6

Income from financial asset investments 54.1

Changes in fair value of financial instruments 54.2

Loan interest income receivable 31.1

Total before Tax 166

Unit: RMB million

10

HKD100

million

Market capitalization：49

Cash & investment：103

Fixed income----12%

Cash & cash equivalents---11%

Equity Investments--48%

Marketable Securities---29%

Partners: Yunfeng Funds, Fosun and CITIC PE Funds etcInvesting in advanced technologies, financial services, new energy, medicine and manufacturing, etc.

SUMMARY OF INVESTMENT AND FUNDS

As at 30 September 2019

*

*As at 30 September 2019，HKD to RMB：0.90201

11

EQUITY

INVESTMENT

4,517MN

1,162MN1,182MN

662MN

871MNOthers

116MN140MN

44MN

340MN

Fixed incomeAverage annualised return

7%-8%

Financial assetsHistorical average internal return

20%-30%

Cash & cash equivalentsAverage annualised return

1.5%-3.5%

Estimated annualised return on investment

before tax in mid-2019

INVESTMENT PORTFOLIOAs at 30 September 2019

12

Basic/Diluted earnings per share 3.21 N.A.

Interim dividend and special dividend per

share1.61 N.A.

Interim dividend payout ratio 50% N.A.

RMB cents2019 2018

INTERIM DIVIDENDAs at 30 September 2019

Business Review + Outlook

Mr. Zhang Zhiyong

Executive Director, CEO and President

14

02 0301

PERFORMANCE HIGHLIGHTS

• The accumulated sales

volume of footwear

increased by high-30%

and the accumulated

performance recorded

around 35% yoy growth.

Overall sales performance

of footwear boosted by

innovative vulcanised

shoes series• The accumulated sales volume

and performance of the

authentic series recorded over

100% yoy growth, sell-through

rate increased by 20

percentage points.

• The accumulated sales of WMNS

series recorded mid-teens yoy

growth, and the accumulated

performance achieved over

100% yoy growth.

Outstanding performance of

AUTHENTIC and WMNS series

Significant increase in

proportion of young consumers

• Brand awareness among the

target demographics has

been further fortified through

effective branding and

product marketing.

• As shown in the data about

our online shoppers, the

percentage of customers

aged between 18 and 24

increased by 16 percentage

points to 50%.

15

OMINI 50 th ANNIVERSARY

1969-2019

Born in 1969 in Italy, KAPPA emerged in Europe from the 1960s to 1970s beforegrowing into the most recognised brand name for professional and casualsportswear. The sportive, youthful and passionate lifestyle which KAPPA represents hasalso gained worldwide fame, alongside with the image of the back-to-back pair, itshighly identifiable logo, since early years.

16

“PATH TO THE FUTURE” Exhibition

Persisting across one century, the sportive,

youthful and passionate lifestyle which KAPPA

stands for still goes about with ever fresh vigour.

KAPPA HISTORY BOOK

As we celebrate the 50th anniversary ofKappa Omini in 2019, Kappa publishes,for the first time, a book encapsulatingthe century-old history of the brand.

On 24 May, the Kappa History Book wasglobally launched at “The Corner”Gallery in Tokyo, Japan.

The Kappa History Book, published inEnglish and Japanese, records 100 yearsof legendary development of the brandand captures highlights of itsdevelopment through the collection ofprecious archive information in amanifestation of the past, present andfuture of the KAPPA brand.

K A P P A X C H A R M S

S e o u l F a s h i o n W e e k

K A P P A W M N S a n d

K O N T R O L L s e r i e s a t

P a r i s F a s h i o n W e e k

FROM

SEOUL TO

PARIS

18

Brand Ambassador Zitao HuangOn 7 August 2019, the Group announced the

appointment of Zitao Huang, a celebrated artist and

a trend leader, as the ambassador of KAPPA brand.

In addition, the brand has launched the “Trendsetter”

branding project collaborated with Zitao Huang, with

an aim to calling upon more like-minded fashion

trendsetters to create and bear witness to the infinite

possibility of the future.

Promotional Event Collaborated

with Brand Ambassador

A series of online and offline promotional events of KAPPA brand in collaboration with its

brand ambassador launched successively. On the date of the official announcement of

the appointment of brand ambassador, the number of visits on official Weibo account of

the brand and that of the artist as well as media exposure reached 48 million, and

limited-edition products in association with the brand ambassador on online Tmall flagship

store were sold out.

20

Precise and Effective Branding and Product Marketing

Brand promotion and product marketing via new media + internet

Maximise brand effectiveness by facilitating bi-directional store consumption for both

online and offline channel

As shown in the data about KAPPA brand’s online shoppers, the percentage of

customers aged between 18 and 24 increased by 16 ppts to 50%

1

2

3

2121北京三里屯KAPPA旗舰店

RETAIL MARKETING

As of end of FY19/20 1H, there are 25 KAPPA brand flagship stores located in core commercial

districts across China

As of end of FY19/20 1H, 128 newly-opened stores and 112 newly-renovated stores

1

2

22

BUILDING BRAND ASSETS

In connection with the core DNA of KAPPA brand, we have created multi-dimensional brand

assets via sports sponsorships in order to increase engagement with our target demographics.

World Fencing

Championships

Lin Sheng won an individual silver

at Fencing World ChampionshipsChinese National Fencing Team

Qualification Battle for

Equestrian at Olympic

Chinese Equestrian Association

Scores accumulation for Olympic (2nd Round)

(Fencing World Cup-Russia)

PRODUCT STRATEGY

Strengthening brand value and diversifying

core products

Developing and planning product mix by

utilising global resources

Moving beyond traditional concept of

product launch as well as conventional

operations model and procedures

1

2

3

KAPPA X TOP FASHION BRANDSWith a number of groundbreaking creative design products that reflect the brand's vitality in the trend field

24

KAPPA X CHRISTIAN DADA KAPPA X INXX SPORTS KAPPA X A.FOUR LABS X SHAUNA T.The co-branding effort for the current seasonrepresented a continuation of the design conceptunderlying “SPIRAL” launched in the first season,signifying the positive motif of how things constantlymove forward and evolve into something new. Withthe benefit of some vintage Banda designs, a wholenew range of possibilities in blending fashionable artand trendy sports have been brought to the fore.

• The co-branded series featuresprofessional gear for extreme sports aswell as tees, jackets and other light-sportsapparel.

• Colour tones are dominated by thepopular b/w and fluorescent green,complemented by an impressionist imageof the dragon in eastern tradition, asymbol of power and auspiciousprospects.

• Following the success of 2018 FW Kappa x A.FOURLABS x P.A.M., Kazuki Kuraishi and Shauna Tooheyteamed up with Kappa again for furtherinnovations in the creation of a co-branded outfitsfor the new season.

• The co-branded series features a number ofstandalone trendy items, such as windbreakers,sports suits, dresses, baseball caps, functionalbackpacks, sports shoes and accessories,characterised by even bolder designs mainly inblack, orange and purplish blue and enhancedby refined 3D cutting.

25

KAPPA has partnered with

renowned fashion designer

IWAYA to launch the KAPPA G

series.

This spring and summer new style

is the second season of KAPPA G.

Its design theme is “Golf

sportswear” and “60s artistic

sense”. Like the first season,

KAPPA G's products do not follow

the traditional style of traditional

golf sportswear. Combining

IWAYA and a unique color look,

this season's products are very

decorative.

KAPPA G

26

KK O N T R O L L

The KONTROLL Series is a brand new productresulting from collaboration with SLAM JAM,the renowned Italian brand from Milan. Thedesigns have been renovated with new ideasand creativity to give a new lease of life tovintage styles, offering a touch ofreminiscence between classic styles andmodern shapes that is just right.

The Kappa Kontroll women’s series offers a richvariety of choices, such as maxi dresses, tees,strap vests, casual suits, hoodies and others, ina glamourous portfolio lit up by royal blue,peppermint green, orange and black to assurean extraordinary sense of the Summer.

27

Cross-section Collaboration of KAPPAOur co-branding encompasses several sectors, such as Japanese anime, music and beverage, for the purpose of keeping a closer relationship with young fashion enthusiasts

KAPPA X DORAEMON KAPPA X Modern Sky KAPPA X Watson’s Soda Water

28

KAPPA launched its brand new KAPPA X PLUG series in collaboration with five groups of artists from

different sectors, such series reflect distinctive cultural backgrounds, artist forms and creative concepts

KAPPA X PLUG

29

KAPPA has launched a new brand series of plimsolls under the design of KAPPA KOLUMN in trio-branding

collaboration with NPC and ANB, the well-known fashion brands

KAPPA X NPC X ANB

30

H1 2019/20: retail revenue growth driven by strong e-commerce

momentum

Offline e-com Offline + e-com

Low single-

digit growth

High-single-

digit growth

Medium to

high single-

digit growth

30% - 35%

growth

Mid-to-high-

fifities growth

Low-forties

growth

Mid-single-digit

growth

Mid-teens

growth

Low-teens

growth

High single-

digit decline

Low-single-

digit decline

Mid-to-low

single-digit

decline

30% - 35%

growth

Mid-to-high-

fifities growth

Low-forties

growth

Low-single-

digit decline

Mid-to-high

single-digit

growth

Mid-to-low

single-digit

growth

1Q

2Q

1H

Retail Performance YoY Same-store Growth YoY

Offline e-com Offline + e-com

31

1

Growth in H1 has been driven by

growth in quality, underpinned by

highly effective channel

optimisation and business reform.

2

3

E-commerce, outlet, shopping

centre and selected major sales

regions have a stable growth.

Whilst inventory level may rise in the

short term owing to changes in

sales policy, stock volume of the

Group is expected to further

decrease as we continue to

optimise our channels and practice

detailed product management.

Reform Management and

Business Stable Growth

32

Store Number and Structure

1Number of stores:

KAPPA Adult 1,176 (33 less versus end of March 2019);

KAPPA Kids 285 (10 less versus end of March 2019)

2

3

Store structure of KAPPA Adult:

Outlets 140 (accounting for 12%);

Shopping mall 280 (accounting for 24%)

Store number of KAPPA Adult by city level:

Municipalities and provincial capitals accounting for 36%;

Cities at prefecture-level or below accounting for 64%

33

Channel Strategy

1

Ongoing execution of planned

approach channel reform:

targeted primarily at the reform

of channels at outlets and

shopping mall.

2 3Expediting the

building of

localised sales

teams.

Optimising our channel mix, building

more efficient channels for stock

clearance, actively developing and

deploying the cloud storage system,

and increasing the speed of stock

turnover at all channels.

34

Product Strategy

1Confirming our brand

and product positioning

2

3 Ensuring that product reform

and channel reform are in

accord

Enhancing our product

mix and design

Organizational Reform

1 Reform of designer teams

2

3Improving profitability at end

sales through team reform and

product improvement

Reform of product

management team: enhancing

ability in product management

throughout all channels

36

Young buyer groups

aged 18-24 increasing

to 50% in percentage

share

New generation of target customers

Effect of excessive

demand reflected in

results

Products in excessive demand

Flow yoy + 40%,

conversion yoy + 6.8%,

sales amount per

customer yoy + 8%

Yoy growth in operating indicators

Footwear registered

95% yoy growth

Strong yoygrowth for footwear Yoy growth in percentage

contribution of premium

products, represented

mainly by the BANDA,

PLAYER KAPPA and

KOLUMN series, has

increased to 30%.

Greater contribution from premium products

Positive cycle for

product mix

New generation of products

Operating Highlights of e-Commerce in H1

37

e-Commerce – The Starlight Project

A community charity project by Gold Feather (

金羽翼 ) and MOROCO in association withKAPPA, launching four co-branded teesfeaturing reinterpretations of artworks ofautistic students.

38

KAPPA KIDS

1

2

Sound performance delivered in second-spell

collaboration between KAPPA KIDS and Chinese

Football Boys.

KAPPA KIDS will be engaged in sophisticated product

R&D to improve its kid’s wear line.

39

Goals and OutlookKey tasks for core operations

1

2

Channel reform

Further efforts in reform

targeted primarily at outlets

and shopping centers

Product reform

Confirming positioning of

brand and products,

focusing on product quality

and design, and ensuring

that product reform and

channel reform are in accord

3 Organizational reform

Enhancing localization of

regional sales team across

the country; increasing the

recruitment of talents in

product development

Core Target

1

2

Same store SSSPositive growth

RevenueMid-high single-digit

growth

DisclaimerThis presentation contains certain forward-looking

statements in relation to the Company’s financial conditions,

operating results and business. Such forward-looking

statements represent the Company’s expectations or beliefs

regarding future events and are subject to known or

unknown risks and uncertainties. Such risks and factors might

result in significant difference between actual results,

performances or events and the results, performances or

events stated or implied in such statements. Certain

statements, such as those including words and expressions

such as “potential,” “estimate,” “expect”, “anticipate,”

“target”, “intend,” “plan,” “believe,” “project” and similar

phrases expressed in different forms, can be regarded as

“forward-looking statements.” Forward-looking statements

are subject to inherent risks and uncertainties. It should be

noted that a number of factors might result in the actual

outcome deviating from conditions expected or implied in

the forward-looking statements and such deviation might be

significant in some cases. The contents of the forward-

looking statements are accurate as at the date on which

such forward-looking statements are made, and should not

be assumed to have been revised or updated to reflect

latest information or subsequent events. Market trends and

factors that are expected to affect the operating results of

the Company are set out in the section headed “Financial

Review” and other sections.

Website: http://www.dxsport.com

E-mail: IR@dxsport.com.cn

Tel: +86 (10) 6783 6585

Fax: +86 (10) 6785 6606

Address: 21/F, 2 Jingyuan North Street,

Beijing Economic and Technological

Development Zone, Beijing, China

IR Contact

Kappa Kids Phenix

QR CodeFollow our Group and Brand on WeChat

To join our activities and receive

further information on the brand

campaigns of Kappa, Kappa Kids and

Phenix.

Kappa

40