ANTA Sports Products Limited

Distinguished investors, good afternoon. Welcome to ANTA investors press release. Under this, a lot of the uncertainty, we just released the 2025 annual results. For the first time, the revenue was over 80 billion. It is the positive growth for 12 years. It definitely consolidated the leading position and secured the top three places of the industry of the whole world. To be successful, we have to make the best out of the operation. Let me introduce to you the management results today. and we are going to share the secret of the success. Let's invite Mr. Ding Shizhong, Chairman, CEO Mr. Lai, Executive Director, CEO Mr. Wu Yonghua, Executive Director Mr. Zheng Jie, CFO and Executive Director Mr. Ding, Vice Chairman Mr. Lin. With us, We will begin with Mr. Lai's review of the 2025 and the outlook for 2026. And then we will pass the floor to Mr. Ding for the financial review. We will end up with the Q&A session where the management team will take the questions from the investors. Now let's pass the floor to Mr. Lai to review the performance in 2025. Distinguished investors, friends, good afternoon. Let me brief you what we did in 2025. In 2025, the market was facing a lot of challenges and uncertainties, but Anta Group, achieved our success through high-quality development. Our revenue grew 13.3% to 80.22 billion. It was the first time for us to make the breakthrough over 80 billion, and we consolidated our strength in Chinese market. According to the data from Ori, our percentage point of the market was up 1.21%, and the second player was down 16%, so that consolidated our leading position and secured the top three places for us. Our market share has been improved as the result of our multi-brand strategy, ANTA and FILA. growth rate was definitely above the industry average. Descent and clone performance was also over the expectation. The operation was in high quality, and we made a lot of efforts in brand channel and product development, and the operating profit was up 0.4% to 28.8%. Except from Amos Sports Listing, the profit to shareholders was up 13.9%. Our performance was healthy and the cash flow was stable. Free cash inflow was 16.11 billion. The year-end division is HK$0.180 based on the profits to the shareholders, the payout ratio is over 50%. I'm going to share with you the specific performance, but why don't we dive into the specifics of 2025 generally. The GDP growth of 2025 in China was 5%, which is definitely in line with the government's targets. The consumption item was over 50 trillion. Among that, the sports apparel consumption was over 6% growth, which is higher than the consumption growth of the overall retail sector. And we found that some niche market, the growth rate was higher. That gave a momentum of the overall growth. On the other hand, I think the confidence index was rather low. It is 89.6. I found it touched the bottom and rebouncing up. In the just finished two sessions, the GDP growth rate has been determined in the range 4.5 to 5%, and the policy strategy is to boost the consumption, and we recently found that 9% of the growth rate of the incentives that support the real economy. The environment is very favorable and we will definitely commit to the high quality development. That's why we are confident for the future of the group. In 2025, we have observed a couple of the features of the consumption market. First, it's getting to be more reasonable and consumers are looking for the affordable replacement. On one hand, they are choosing the quality, the cost-effectiveness, but they are also willing to pay for the premium for better qualities, the descent and the clone. shows the good result because of this preference, because of their willingness to pay for premium. Service is favored in consumption. It has grown from 39.7 to 46.1, like entertainment, fitness, and past business are driven by the experience and growing fastly and consequentially drive the demand for the apparel and footwear. Chinese consumer products are going abroad, favored by the e-commerce platforms. Our company as early as 2021 started our global strategy. Under this current situation, it is very fearful for us to go abroad. In addition, we found that there are certain features of the sportswear industry, like large size and stable performance. Specifically, the features are, first, the professional apparels are growing steadily for the running, training, and tennis, golf, and skiing, those categories are performing pretty well. Therefore, enter and filler descents are showing positive performance in those niche areas. That's why we are above the industry average. Second, fashion sportswear is taking a large volume. Though the growth rate is slowing down, but the sportswear is penetrating into daily uses. and the growth rate is continued. Fila, as the leader in the sports fashion industry, maintained 7% almost growth rate in the last year. Outdoor is an emerging area of business, including the real outdoor products and the urban outdoor products. I believe there are great potential for these segments to grow better. That's why for Descent and Cologne, we think they are very promising because of the right sector. And I'm going to go through the different business segments. Our brand is committed to serve the public, to be professional and to be premium. We are enabled by technology to cover different categories and consolidate the leading position as well as expanding the overseas market. In 2025, the revenue grew 3.7%. The operating profit remained 20% of the margin. The performance is definitely over. the industry of the sizeable business or with similar size. In that period, we have done a couple of things. First, the China reform is showing the results. We have three arena flagship and the performance was over 3 million. We are serving tier 1 and tier 2 CBD area by palace stores. The efficiency was over 800,000. For the public market, we have the lighthouse stores. There are 3,000 either new or reformed. The efficiency is up 25% after the reform. Therefore, you can definitely see the improved efficiency of those new stores, and the reality proves our strategy. Second, we are serving for the champions, for the professional athletes, and we have that kind of stores, in total 77. At the end of the year, we in total have 160 professional stores. Ancha is building the market heat. For example, the C-plus or the C-series of the products on that year, we sold 1.2 pairs of that kind of the shoes. We have PG-7, which is featured by being comfortable and cushioning. The sales volume was also pretty good on the apparels. We have... We have the new kind of pants that performed pretty well. For kids, we have three key IPs, Zhugong, Hailang, and Zhufeng. The sales volume was definitely over the target. The online traffic sales was over 8%. Therefore, based on the very comprehensive that consolidated ourselves as the leading position in the sports kit industry. Looking at the overseas business, our overseas business has grown 70% and amounted 850 million. This year, probably you have found that the first flagship store in North America located in Los Angeles. Beverly Hills just launched that made our presence in the American market. Fila Fila is featured by the premier brands and the reform and the retail upgrading. You know, the revenue of Fila grew 7% in the last year. The operating profit margin was 25% and over. That is definitely over the industry with similar size. Speaking of the Fila brand, we consolidated the Fila brand and focusing on two sports, tennis and golf. On tennis, Fila launched the new technology strategy that then leveled up the sales amount and the influencing power. We became the sole sponsor for China Open Tennis, and we signed the brand ambassador. and we redesigned the polo shirts and the tennis skirts. In golf, for three years, we sponsored the World War China Open golf tournament and also the professional athletes. and the signs in running the athletes and then we are highly recognized in this circle on the products we first on polo down jackets running shoes and the sneakers those products are very competitive during the reported period all of those products are showing very positive results on retail the store has been reformed that could be perfectly match the niche market and we have the flagship store in for example the CN number one store and the Fila Kids is located it's launched in the Universal Studio in Beijing and the Fila Golf has the new kinds of the stores in Beijing and the image has been consolidated This sent the revenue growth 34.5% and make the breakthrough over 100 million. It is the third hundreds of million brand and the overall channel discount. was 10% or less, so the growth is really high in high quality. Decent will continue the high-quality development and developing the products for skiing, golf, and the running shoes. And the women products will make some breakthrough that accounts 2.4 more percentage points. Descent, the efficiency of the store, is over 2.7 million. For the store achieved over 50 million, it grew from 21 to 49, and eight stores of Descent made revenue over 800 million. Online growth was also getting better, and the discount available online is definitely lower than 10% on the royalty program. For those under 35 years old, it accounts for 40% of the total membership base. Outdoor Cologne showed a really positive growth, and the traffic was over 6 million, growth rate 70%. Over-revenue discount rate is lower than 10% on products. The Cologne products make some breakthroughs on products offering. Made the hiking shoes and the outdoor shoes. The sell-through went up 140% probably you know it was mainly making clothes apparels but now we have a couple of the shoes by cologne they are pretty popular and well received by the market on channels as the in 2025 the efficiency was over 2 million before we have the unbalanced development in the north and the south but now even the south of China the per store performance of growth to 1.5 million from 950,000 and within in last year we announced that we are going to we were sponsoring the national climbing team of China Network Management of the Retail We continue to optimize the network and enhancing the efficiency of the stores. We need to set up the red store at the right location. By December 2025, the adult store will have 7,205 kids, 2,650. Fila Core, 1,270. Fila Kids, 578. Brand, 189. Descent, 250. Colon, 209. Maya, 252. For the whole year, we set it up 971 stores, closed 1,260 stores, reformed 1,302 stores. By the end of 2025, in total, we have 12,949 stores. Year-on-year, 68 stores down. In the meantime, in the last June, we acquired another brand who have 402. Among that, 248 are in China. The rest are in the overseas markets. Online business in 2025, the contribution was 35.8. Year-on-year, it was a growth of 15.5%. The online growth is pretty fast. In 2025, Fela brands performed pretty well. On Tmall, Jindong, JD, and TikTok, they have the low double digital growth, which is above the industry average. I think the industry average is like the high single-digit, but we achieved the double-digit. In the footwear ranking, we were the top three. Decent at the three major platforms, the growth rate was 40%, and definitely make itself as the top 10 brands in footwear. We will continue to optimize the structure of the products and expand to the Southeast Asia and Amazon platform and also expand the overseas business development. AI and Digitalization. Our company launched AI365 strategy, which means reduce the cost, driving the growth, strengthening the experience. Those are the three targets of AI development, and we are happy to see the results. Cost reduction. For the first time of the sports industry, we launched a big model of this industry that enables AI to help the design of the products. For the driving of the growth, at many platforms, we used the digital avatar to do the live stream. The GMV contribution was 300 yuan. meaning the total live stream hour was over 100,000. Through AI, we do the targeted precise marketing and the conversion rate was 20%. On experience of the users, after the AI customer service, the response rate was over 50%. Satisfactory level was over up 11%. Let me give you a few examples. Remarks on our performance of ESG. I think we have done tremendous and very down-to-earth job about ESG and the performance is pretty good. MSCI rating for three years, we jumped four grades. Now it's triple. is AA, Climate Change Rating is A-Rage, and we are included in the A-list. Only 2% of the business in the world could be included. We are also included in Hansen ESG Index and the Dow Jones Sustainable Development Emerging Index. We were ranked at the top 10 of those two index. Developing with the consumers, 38 products are renewable and sustainable and we launched the replacement pathway and it has made us the first one to commit to replace the polyesters and renewable packaging is being used in 48% of our total products for all of our stores we stopped using the one-off plastic bags disposable Group 1 and Group 2 emissions it was down 65.2%, and by 2024, it's down 46%. It's in line with. For the Group 3, it was for the first time we reduced. It was the first time for the Chinese industry. For the governance, we have 60,000 employees. 41% of the management people are females and we hit this target earlier than our deadline. Every year, we give the share incentives to let the employees to grow up together with us. On social responsibility, we donate cash and donate sports facilities for the development with our partners for the primary and the secondary suppliers. All of them are in complying with the ESG and we have done 1500 times of the supervision and 88% were receiving good or excellent reading of the ESG. That's all of my review of the performance in 2025. Thanks very much, Mr. Lai. Thanks very much for How could you make it? And how could we implement our multiple brands strategy? Now let's pass the floor to Mr. Bi to do the financial review. Good afternoon, investors. Now I'm going to dive into the specific financial performance. In 2025, the overall revenue was 80.2 billion, up 13.3% year on year. The growth of this year was 9.4 billion. Through the multiple brands strategy and the stable operation, I believe just within this year, we made the growth over 10 billion. It is very stable. Let's go to the specific performance of each brand. ANCHA 34.7. year-on-year 3.7% online growth rate 7.3% failure revenue 28.4% 6.9% year-on-year online growth was over double digit All the rest of the brands contribute 19 billion revenue. The growth rate was 59.2%. Represented by Descent and Cologne, the growth rate was so good. Looking at the gross margin, the overall gross margin of the group of 62% down 0.2 percentage point. What are the reasons behind ANTA growth region was down 0.9%? The reasons are First, we continue to invest more in running and basketball and other professional products, like the C-Series running shoes. We invest more in the R&D of the technology platform. Online business is taking a larger portion. online discount is generally lower than the offline market. That's why the gross margin was impacted. Fila gross margin was 66.4, down 1.4 percentage points. In 2025, Fila has the special position. Based on that, we redesigned the model of the products offering, and we invest more in DNA products, and we made more efforts in the fabric development and products design. That's why the gross margin is suffered a bit. For the rest of the brands, if you look at the figure alone, it's getting down, but I want to say a few more words. Those other brands were incorporated in the performance of our new brands because it's dedicated to the wholesale business. That's why the gross margin is low. If we exclude that acquisition, those other brands' gross margin was actually growing up. Expenses of operation. Salary accounts 15.3 up 0.5 percentage points. We will continue to do the efforts in human resources, advertisements and publicity accounts 8% down 1 percentage points. In 2024, it was the big year because there were a lot of sports tournaments like the Olympic Games, and we have to invest in those events. But in 2025, this was pretty easy and normal, so the expenditure was stable. R&D accounts 2.7% down. 1%. Using other research centers of the world, we continue to develop the best products for the customers. That's why we continue to invest in that by developing new technology, new material, and new methods. We spent $22.2 billion on the development of the platform. Probably you found that in the Winter Olympics in Milan, we sponsored 13 national teams in China. and we provide the professional apparels and facilities to them and help them to achieve the best results they could. Profit margin, we have the revenue 80 billion and the profit ratio was 23.8, up 0.4 percentage points. Among that, Ancha, the operating profit margin was 20.7%. It's mainly used for the investment of brand building and product development. The global position of Ant gives a very good momentum of growth. So if we look at the future, and if we are speaking about the investment for the future, I believe we are on the right track. And the operating profit margin maintains the same level. Fila, operating profit margin 28.1% up 0.8 percentage points. As I mentioned that even the gross margin dropped a bit for Fila, but the operating profit margin maintained at a high single-digit growth rate, and we reasonably controlled the uses and allocation of the resources for Fila. That's why the overall efficiency of Fila were pretty high, so the operating profit margin was 286.1. Excluding the impacts of our acquisition, for the rest of the brands, dissent was over chain billing and the size of the scale. showed the benefits and the gross the profit margin the operating profit margin growth 2.3 points 2 percentage points to 31.8 the profits to shareholders accounts 60.9 is 0.1% up. I believe it is the best possible figure in the past three years. And in 2024, AMA contributed 200 million positive profit into 2025 it was 1.22 billion that's why the year end dividend was 108 cents and the payout ratio was 50.1 and the long-term payout ratio was very stable operating capital management inventory life is a bit below the growth rate of the revenue. At the beginning of 2025, we had a rather big inventory base from 2026, now the inventory life is 137 days, it's 14 days more. We have a strong data system to let us know the overall inventory of different channels and the Inventory sales ratio is like 5 times. I think overall it is rather healthy. In 2026, I believe we will continue to strengthen the healthy level management for the inventories. We will take different measures to control the inventory. For example, precise and reasonable management of the procurement and the online-offline coordinated management of the data, I believe then the inventory level will be better in 2026. Receivables and liabilities and payables are roughly the same level of last year. Looking at the cash flow, the net cash flow of operating 21 billion up to 4.2 billion, the ratio is 96%. It is the really stable capacity of cash generation We paid the acquisition in the last year, 2.17 billion. After that, the free cash flow was 16.11 billion, 2.8 billion more. The year-end cash and deposit amounted 50 billion, liability 23.3, net cash flow 31.7. It is roughly the same level of last year, so the financial situation is rather stable and healthy. In 2025, we will continue to commit to the high quality development as the leading principle. We have the multiple brands and we are trying to differentiate them. and we have an organized way to management all of them. Though we are standing on a high base, we still want to grow further. A couple of the aspects we want to develop. First, the stable profit-making ability. In 2025, we know the net cash flow and the operating profit growth achieve the high double-digit growth and On the operation, the net gross margin was rather stable. In 2025, the net cash flow created was 21 billion, up 21%. Now our cash flow is really sufficient. It's around 30 billion and we will continue to invest for the future. 2.2 billion were invested for R&D. Antafila and other brands will definitely make one breakthrough after another. by our data. I believe those breakthroughs consolidate our leading position in the industry. We will go to the world as our usual business strategy. That's why the overseas business will take a larger portion of the total business. That's the overall situation. Thank you very much. Thanks very much, Mr. Bi. Mr. Bi, so five times has been mentioned at least about stability. So Anta proves that we always want to be stable but not driven by the short-term gains. Now I'd like to pass the floor to Mr. Dai to have an outlook for the future. Mr. Dai will brief us how will go to the world from China. Looking at 2025, by our estimation, I think professional and fashion sports business segments will grow stably. The outdoor sports will continue the growth in high speed and high quality that will have the stable development of the whole industry. Our group will have the clear strategy and committed to the focus on multiple brands and globalization. We will definitely focus on products and operations. Through the high-quality products and highly efficient operations, we can achieve good development. Products is the king. Products is driving the development. Products is the core competitiveness of the business. Through the structure optimization of the products and the precise supply of the products, we can enhance the stability and the certainty of the products of the profit making. Second, to make the a good offering of the products and continue to provide market hits, then we can have a network of market hits products. Thus, the structure will be consolidated. We will focus on the key products and key channels, optimize the portfolio of products and the price, consolidate our leading position. 4. We will release the efficiency of the dividend or the premium through the organic and systematic management of the operation. We will speed up the cycle of inventory and improve the efficiency of the inventory, also release more potential of the profits. Operation is the driver of our overall system. Also, we will do the digitalization of the system and the procedures. The quality of development will be improved and the inventory will be managed better through dynamic management system. The housing level will be monitored and the risk will be eliminated or reduced. Channel quality management is another focus. We will put the priority to quality, optimize the structure of the stores and its combination with the channels. The efficiency of both the operation and the brands will be enhanced. Those are the two key areas we'd like to work on in 2026. Overall speaking, we are confident for 2026, and thanks for your support.