China Dongxiang Announces Operational Results for 2Q and 1H FY2020/21

Diversified Channels and Improved Product Management Brings Growth Momentum

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HONG KONG, CHINA - Media
OutReach - 27 October 2020 – The leading international sportswear
brand enterprise in the PRC, China Dongxiang (Group) Co., Ltd.
(“China Dongxiang” or “the Company”, together with its
subsidiaries, “the Group”, HKEx stock code: 3818) announces its operational results for the three
months ended 30 September 2020 (2Q
FY2020/21) and the six months ended 30 September 2020 (1H FY2020/21).

For the 2Q FY2020/21, the retail performance of Kappa stores
(excluding Kappa kids’ apparel business and Japan business) for the overall
platform registered a mid-single-digit growth on a year-on-year basis, of which
the offline business recorded a flat growth, and the e-commerce business
recorded a mid-to-low thirties growth. The retail performance of the overall
platform for the 1H FY2020/21 recorded a low-single-digit growth on a
year-on-year basis, of which the offline business recorded a mid-single-digit
decrease and the e-commerce business recorded a mid-to-low thirties growth.

As for the same-store-sales (SSS) during 2Q FY2020/21, in respect
of Kappa stores (excluding Kappa kids’ apparel business and Japan business)
which have been in operation since the beginning of the same quarter the
previous year, the SSS for the overall platform registered a mid-to-low
single-digit growth, of which the offline business recorded a mid-to-low
single-digit decrease and the e-commerce business recorded a mid-to-low
thirties growth. The same-store sales for the overall platform
for the 1H FY2020/21 recorded a mid-single-digit growth on a year-on-year
basis, of which the offline business recorded a high-single-digit decrease and
the e-commerce business recorded a mid-to-low thirties growth.

For the second quarter ended 30 September 2020, the number
of Kappa-branded stores of the Group was 1,153 (excluding Kappa kids’ apparel
business and Japan business), representing a net increase of 24 as compared
with that as at 31 March 2020 (the end of FY2019/20). In the next step, the
Group will continue to close inefficient stores.

Mr. Zhang Zhiyong, CEO, President
and Executive Director of China Dongxiang, said, “Since
the implementation of ”direct-franchise” model, the Group has continued to
reform. Interim progress has been achieved in Kappa brand business which has
been in line with management’s expectation. During the Period, growth momentum
of the offline sales was principally derived from structural optimisation of
channels as well as continuing steady growth in business performance of outlets
and shopping centres. Meanwhile, the Company has made progress in reform and
construction of the product management and design team. Through a series of
effective measures, apparel product ranges were further diversified in the
period, registering a growth in mix-and-match sales. In addition, we are
developing a new business platform which helps to build a solid foundation for
the development of our e-commerce business. The Company will continue to
implement localised management of sales teams, further accelerate the
merchandise turnover in omni-channel retailing and strengthen the professional
capabilities of product teams. We will closely monitor the changes of the pandemic, strengthening
supervision and control over our operations to protect the Group’s value and
shareholders’ interests.”

About China Dongxiang (Group) Co., Ltd. (Stock code: 3818)

China Dongxiang (Group) Co., Ltd. is a leading international sportswear
brand enterprise in China which has been listed on the Main Board of the Hong
Kong Stock Exchange since 10 October 2007. The Group is primarily engaged in
the design, development, marketing and wholesale of branded sportswear in
China. Currently, China Dongxiang owns all rights to the internationally
renowned Kappa brand in China and Macau. On 1 May 2008, China Dongxiang
completed the acquisition of Phenix, a Japanese sportswear enterprise. Phenix
is the most popular ski brand in Japan with the largest market share, as well
as a well-known brand in the international market.

For more information, please visit http://www.dxsport.com/