ANTA Sports Products Limited

Distinguished guests, investors, analysts, good afternoon. Welcome to Enter Sports interim results presentation. At noon, we announced our interim results. So looking at the afternoon session stock price, I guess our results have exceeded market expectation. Before we officially begin, let me introduce our management in attendance. Group chairman and executive director, Mr. Ding Shijiong. Mr. Ding, please come up to the stage. Executive Director and Joint CEO, Mr. Lai Shixian. Executive Director and Joint CEO, Mr. Wu Yonghua. Executive Director, Mr. Deng Jie. Executive Director and CFO, Mr. Yu Mingming. Vice President, Mr. Lin Wei. In today's event, Mr. Lai will first present the 2026 first half group performance and various business performance. And then Mr. Bi will go through financial performance. And then Mr. Lai will talk about outlook. And then finally, there will be a Q&A session. Mr. Lai will lead our management to answer questions. Now, let me invite Mr. Lai to address us. Investors, ladies and gentlemen, analysts, good afternoon. First of all, let me report to you our first half business results. In the first half of 2026, the market environment remained challenging, but Anto Group's overall performance was stable, and we continued to maintain a good growth momentum. I'd like to use a few numbers to briefly summarize the performance in the first half of the year. First, the group's revenue was up 12.9% year-on-year, reaching $43.51 billion. This growth rate outpaced most of our global peers of similar size. Secondly, our growth was comprehensive. All brands performed well in the first half of the year. Among them, ANTA and other brands exceeded our full-year guidance at the beginning of the year. and Fila also reached the high end of the guidance range. This once again demonstrates the advantages of a multi-brand portfolio making the group's overall growth more stable. Third, while revenue growth exceeded expectations, our operational efficiency also improved further. The group's operating profit margin was up 0.7% point year-on-year to 27%, the highest level in the first half of 2019. or the highest level since the first half of 2019. This demonstrates that our growth is not merely an increase in scale, but also a growth in quality. In terms of profit, excluding the one-off gain from Amer Sports share issuance, profit attributable to shareholders increased by 12.9% year-on-year to $7.94 billion. Meanwhile, our cash flow remained robust. Net free cash inflow in the first half reached $11.63 billion. up 54.2% year-on-year, providing ample support for the group's future development. Finally, we continue to share our company's growth with our shareholders. The board declares an interim dividend per share of HK$0.151, a year-on-year increase of 10.2%. Based on the profit attributable to shareholders excluding profit and loss of associates, the payout ratio remains above 50% in the first half of the year. Overall, the results in the first half once again demonstrate that the multi-brand strategy coupled with our long-standing commitment to the brand plus retail model has enabled the group to maintain growth while also maintaining good operational quality and resilience in a complex market environment. Now let me talk about The Macro Industry Situation in the First Half Total retail sales of consumer goods grew 1.3%. Consumer confidence remained basically at the level of the end of last year. Therefore, what we are seeing is not a comprehensive and rapid recovery in the consumer market. However, the sportswear industry has shown relatively greater resilience. One important reason is that sports products today are no longer just for sports. They also meet multiple needs such as health, commuting and social interaction. So consumer demand for this category is relatively stable. Secondly, the K-shaped differentiation in the consumer market is becoming more apparent. On one hand, consumers place greater emphasis on cost-effectiveness and value for money. On the other hand, they still are willing to pay for products that truly offer professional functionality, clear brand value and differentiated experience. Sports Products Limited Consumers' demands for products with different functions and scenarios are becoming increasingly refined. That's why we consistently emphasize a multi-brand strategy. In today's market environment, it's difficult to only rely on one brand or one category to cover all growth opportunities. Our group's different brands serve different consumers, different sports scenarios and different price ranges, allowing us to better capture these structural growth opportunities. The group's performance in the first half of the year is due to both the resilience of the industry itself and the fact that our multi-brand, multi-category strategy is taking effect. Next. Let me give a review of our group's business. First, let's look at Enter Brand. In the first half of the year, Enter Brand continued to adhere to a strategy of mass market positioning, professional breakthrough, and brand elevation. Revenue was up 4.8% year-on-year. Operating profit margin remained above 20%, outperforming our peers of similar size in the industry. I think there are a few developments in the first half of the year that deserve special mention. First, we have made significant progress in developing key product categories and best-selling products, or hero products. Running is a key category we are focusing on. In the first half, sales of our core running shoe franchises, including the C family, PGG, and so on, sales volume exceeded 5.6 million pairs, a year-on-year increase of over 30% in apparel, so Feng Bao Jia, Da Shi Yao and so on, sales of these core products also exceeded 2 million units, up 35% almost year on year. This demonstrates that our product strategy is becoming more focused. We hope to drive category growth through products that truly resonate with consumers and gradually build a clearer consumer perception. of ANSA in the professional sports field. Secondly, kids' business is also developing in the same direction. In the first half of the year, the revenue of eight-square footwear IPs increased by more than 40% in sales, exceeding 900 million RMB. The revenue of four core apparel IPs also is more than doubled. Therefore, whether for adults or children, we are now more focused on one issue. Can we deepen our product offerings and expand our core IPs to truly make consumers remember our core products? Third, The focus of channel reform is to improve channel quality and efficiency. In the first half of the year, Antacor brand offline retail store productivity reached 310,000 RMB, up 2% year-on-year. Proportion of shopping malls continued to increase, and the revenue growth rate was better than the overall market, achieving healthy growth. Kids' offline store productivity was up 3% year-on-year, and We also did a lot of upgrading. So we have light house stores. After renovation and revamp, store productivity reached 440,000 RMB, 10% higher than the average level in the second half of last year. So for us, channel reform ultimately depends not only on how many stores have been opened, but on whether good products can reach consumers more effectively through suitable channels and store type and bring higher operational efficiency. Finally, international business. Internationalization is a crucial direction for ANTA's long-term brand development. In the first half of the year, with overall store count remaining relatively stable, ANTA's overseas revenue was up 35% year-on-year. Preparing products, brand channels and local operational capabilities and successfully implementing ANTA's international business model are key tasks at this stage. In the future, we'll proceed with our international business in a measured and focused manner, gradually establishing and expanding our operations in markets where conditions are ripe. Overall, Enterbrand's focus in the first half of the year was not simply on pursuing scale, but rather on continuing to strengthen our products, deepen product categories and improve channel efficiency. These capabilities are the foundation for Enterbrand's continued growth and expansion into the international market. Now let's look at Fila brand. In the first half of the year, Fila continued to advance its One Fila strategy, adhering to its positioning as a high-end sports fashion lifestyle brand, focusing on improvements in three key areas, brand, merchandise and retail. Fila's revenue was up 6.1% year-on-year, operating profit margin rose 1 percentage point to 28.7%. Despite already achieving a substantial revenue scale, Fila still achieved strong growth while further improving profitability, outperforming industry peers of similar size. I think there are three key areas about Fila that deserve our attention in the first half of the year. First, the brand focused more on core demographic and core sports scenarios. Female consumers are a very important group for Fila. In the first half, we further strengthened our communication with young female consumers through a series of brand activities, including new brand ambassador and event for Fila. International Women's Day. Proportion of women's apparel sales increased by two percentage points, reaching over 40%. Meanwhile, we continue to deepen our focus on two core sports categories, tennis and golf. In golf, Fila is sponsoring the Volvo China Open for the fourth consecutive year, and we have launched professional products such as the polo, boundless. In tennis, we continue to advance our 360 tennis strategy. extending from professional tournaments to young consumers. This includes the Fila Kids Garden Tennis Show and a series of core products launched around the French Open and Wimbledon, further strengthening our position in the tennis category. This enhanced the filler's brand recognition in the tennis field. Secondly, I think this is a very important change, and that is clothing or apparel has once again become a major driver of growth for filler. In the first half of the year, filler apparel achieved high single-digit growth, reversing the previous trend where footwear growth significantly outpaced apparel growth. In the past few years, filler apparel relied on footwear. a lot because the original share of apparel was low. In the past few years, footwear made a bigger contribution and apparel's growth was smaller. However, this year, apparel regained its high-speed growth trend, and among these, growth rate for sportswear exceeded 50%. Meanwhile, the two core categories of tennis and golf both achieved low double-digit growth, while representative products such as Chunky sneakers also maintained high single-digit growth. This indicates that feelers' growth is becoming more balanced. We're not relying on just one category, but rather creating more growth points in apparel, footwear, and professional sports categories. So now we are more balanced overall. In terms of professional sports categories, there are now more growth drivers. Third, retail quality of filler continued to improve. In the first half of the year, the offline store productivity of filler core, filler kits and filler fusion all improved to varying degrees. We are more focused on single-store efficiency, product performance and customer experience. Online sales also maintained strong performance for Fila. During the 618 Shopping Festival, Fila continued to rank first in the sports category on Tmall and Douyin. More importantly, while achieving this ranking, retail discount also improved year-on-year. Our pursuit is not to exchange sales for larger promotions, but rather for higher quality growth. Overall, I believe there is a significant change in feelers' performance in the first half of the year, more diversified and healthier growth drivers. The number of female consumers has further increased. Apparel has resumed high-speed growth. Core sports categories such as tennis and golf have continued to improve, and quality of both online and offline operations has also improved. So for the next stage, we have a lot of confidence in Fila's continued growth. In the first half of the year, Descente continued a strong growth momentum, retail sales increasing more than 25% year-on-year. More importantly, while achieving rapid growth, omni-channel retail discounts remained above 10%. 90% of full price, continuing to achieve high quality growth. Descente has consistently adhered to a clear development model over the past few years. Instead of relying on rapid store opening to achieve scale, it focuses on continuously improving efficiency of single stores through brand product and membership operations. This model was further validated in the first half of the year. First products. Descente continues to strengthen its brand positioning as a high-end professional sports brand. while gradually extending the product technology accumulated in professional fields such as skiing to more sports and everyday scenarios. The portfolio of top-selling hero products continued to expand in the first half. Sales of core footwear products was up more than 40% year-on-year. Sales of apparel products and also Body Flex women's training apparel increased by more than 50% year-on-year. So new directions such as women's and cross-training are gradually opening up new consumption scenarios. We hope that Descente can maintain its brand foundation in professional sports while expanding its consumer base through more product categories and scenarios. The second is retail... efficiency. In the first half of the year, Dassault's overall monthly store productivity exceeded 3 million RMB. Number of stores with annual store sales more than 50 million also increased from 49 last year to 53. For Dassault, our focus is not on the number of stores, but on whether each store can perform better. whether consumer experience can be improved and whether the brand value can be continuously enhanced. Third, membership. Currently, DaSant has over 2 million annual active members, with high-level, high-tier members growing by nearly 30%, faster than the overall membership growth. This is very important for a premium brand. It shows that growth isn't just coming from new consumers. Our core consumer base is also expanding. High quality consumer base is also expanding and their brand recognition and stickiness are continuously increasing. So we have high discount, high store productivity, continuous growth of core members and the expansion of products from advantageous categories to more professional sports scenarios are all foundation for Dassault's continued development in the future. Collins Sports, in the first half, it continued to maintain high quality and high growth with retail sales increasing more than 45% year-on-year. So this is the highest growing brand among our brands. Our... omnichannel retail discounts remained above 90% of full price. Collins Sports has experienced rapid growth over the past few years and in the future we will deepen our focus from outdoor lifestyle to professional outdoor activities and at the same time open up a larger consumer base and market space. In the first half of the year we saw good progress in a few areas. First, products and categories. Collins Sports continues to focus on the hiking and trail running sector, concentrating its resources on core categories that consumers truly need and that represent the brand's professionalism. In the first half, sales of footwear products such as hiking shoes and trail running shoes was up 80% year-on-year. sales of core apparel categories such as hard shell and soft shell increased by more than 70%. This is very important to us. Collinsport's growth is gradually expanding from its strong focus on outdoor lifestyle products in the past to more professional outdoor categories such as footwear, shell products and trail running gear, resulting in a more complete product structure. Second, channel efficiency and regional expansion. In the first half of the year, Collinsport's monthly store productivity further increased from about 2.25 million RMB in 2025 to over 2.8 million RMB. Meanwhile, we have made significant progress in the southern market, which we have been focusing on developing. While adding 11 stores, average store productivity increased from 1.7 million to 2.4 million RMB. This demonstrates that Collins Sports' consumer base and brand influence are gradually expanding, not only performing well in its original markets, but also beginning to establish healthy business foundation in new regions. Third, the brand's professionalism. We continue to establish Collins Sports' presence in hiking and trail running environments. In the first half, we signed contract with Chinese trail runners. and for the fourth consecutive year we became title sponsor of Donghai Genting Mountain Race. So we did this not just for event exposure but to build a long-term relationship between Collins Sport and professional outdoor and mountain trail running through the long-term accumulation of athletes, events and products. Therefore, our focus for Collinsport in the next stage is very clear to continue to maintain growth quality, to further solidify the brand foundation of professional outdoor products, to strengthen core product categories, and to expand the region and consumer base in a measured manner. This is why we believe Collins Sports still has great potential for future growth. Now let me briefly explain our retail network. On this slide, you can see the specific number of stores for each brand, so I won't read out the details. What I want to say is today when we look at retail network, we can no longer simply look at store count, but rather at whether the channel structure is healthy and whether the efficiency of each store is improving. So when I introduced various brands, I think you have realized one trend. Anta and Fila are continuously improving store productivity and channel quality, while Dassault and Collinsport are experiencing rapid growth while also continuously improving single-store efficiency. We adhere to the principle of where consumers are, that's where our resources will be. In the future, we'll proactively optimize less efficient products traditional street front shops and concentrate resources on high traffic, high growth channels such as shopping malls, e-commerce and outlets. Therefore, the total number of stores for some brands may not increase in the future and traditional channels may even decrease but proportion of high quality channels and online business will continue to grow. Next, our online business. In the second half of the year, e-commerce revenue was up 15.7% year-on-year, accounting for 35.7% of the total group revenue, continuing to maintain a good growth momentum. During 618's shopping festival, various brands performed well. Filler continued to hold the top spot in the sports category on major platforms. Enter maintained its fifth position. and for Descente and Collinsport, there would still be room for improvement. Today, when we look at e-commerce, we are not just looking at how much money was made online. Consumers are increasingly starting to learn about new products and decide what to buy online. So we're also strengthening our live streaming, short videos and product recommendation content to make it easier for consumers to understand what makes our products so good, what spots they are suitable for and what scenarios they are appropriate for. And then we can also see consumer reactions faster. We can more rapidly determine which products have the potential to become hero products, which categories require increased investment, and which product need adjustments. This also helps us improve operational efficiency of our products and categories. Therefore, e-commerce is not only an important sales channel for us, but also an important platform for us to understand consumers, create hero products, and improve product efficiency. in the future will continue to promote better cooperation between high-quality online and offline channels and invest resources in areas where consumers truly need us. Finally, let's talk about AI. Everybody is talking about AI nowadays. So for us, the most important thing is not how many AI tools we use, but whether AI has truly entered our business process and solved real-world problems. In the first half of the year, we continued to advance our AI 365 strategy. We hope that AI can truly help us do three things. Three most important things. One, make products faster. Two, do business more accurately. Three, serve consumers better. Let's talk about product first. In the past, developing a design concept from sketches to a relatively complete design draft required designers to spend a lot of time revising it repeatedly. Now, with our self-developed Ling Long design model, sketches can be transformed into design drafts in as little as 15 seconds, significantly shortening the traditional design cycle. Of course, AI will not replace designers. Ultimately, what constitutes a good product and what represents our brand will still be judged by our professional design teams. However, AI can perform a large amount of repetitive work much faster, allowing our designers to focus more time on creativity and the products themselves. Secondly, AI allows us to make faster and more accurate judgment about the market. We're now using AI to analyze social media, consumer trends, and product data to help us discover which sports, which products, which designs are likely to be popular with consumers. By combining such information with the test and repeat model and also supply chain and inventory management system, we can replenish orders faster and produce fewer products that consumers don't need. This is very helpful for our business. So ultimately, we hope to increase sell-out rates, reduce inventory, and improve discount. Third, consumer experience. We can use AI styling model so that consumers can tell us what kind of scenarios they're going to and what their needs are. And the system can recommend suitable products and outfit and also provide some styling recommendation and virtual try-on. Therefore, we don't view AI as a standalone technology project. from design to products to the supply chain and then to retail and consumers. AI is gradually integrating into our entire business process. We're still in a relatively early stage, but the direction is clear. In the first half of 2026, our group's ESG work will continue. to focus on product innovation and external recognition. In fact, we have made some satisfactory achievements. ANTA will launch a number of carbon-neutral products, including the new origami H1 running shoes with the upper mesh and shoelaces made of recycled bio-based eco-friendly materials. ANTA kits also launched a number of products based on eco-friendly yarns materials and recyclable materials so we can reduce water resource consumption and then for external evaluation we ranked in the top five percent of Chinese in S&P Global CSA 2025 and were included in S&P Global Sustainability Yearbook for the first time. Looking ahead to the second half of the year, we'll continue to drive sustainable development through product innovation and further enhance the group's ESG performance and industry influence. So, that's all in my presentation part. Thank you. Thank you, Mr. Lai. So from Mr. Lai's presentation, we can see that the group's multi-brand strategy has shown resilience and strength in the first half of the year. While the external environment was full of uncertainty in the first half of the year, the group still achieved satisfactory operating results. Next, Mr. B will go through our 2026 first half financial performance. Okay, investors, good afternoon. Thank you very much. Good results are given regard to by the markets. So now, I'm going to report to you our first half financial results. The group's revenue reached 43.51 billion RMB, up 12.9% year-on-year. So for anti-brand, revenue was $17.77 billion, up 4.8% year-on-year. Filler, $15.05 billion, up 6.1% year-on-year. Other brands... 10.69 billion RMB, up 44.2% year-on-year. So in the first half this year, our revenue reached a record high. Total revenue has increased almost 5 billion. So you can see that given the overall macro environment, our group's multi-brand strategy has shown a lot of strengths. gross profit margin. The group's overall gross profit margin was 63.9%, up 0.5 percentage point year-on-year. Enterbrand gross profit margin was up 0.2 percentage points and it remained stable. Fila gross profit margin down 0.2 percentage points, mainly due to Phyllis online growth was faster than offline and so The share of offline products had increased, so that's why. For other brands, gross profit margin decreased by 0.8 percentage points for Dessens, Colin and Maya Active. Gross profit margin for a single brand has increased. But because of the structure, there is the acquisition of Jack Wolfskin and Consolidation into the financial statements this year, with a high proportion of his business being wholesale. So that is one reason. Well, in fact, gross margin of Jack Wolfskin itself has increased. For operating expenses, staff costs, 15.4%. So we have made investment into human resources organization, advertising and promotion expenses 6.6%, flats year on year, R&D expenses 2.5%, almost the same as last year. In the first half of the year, We made more than 1.1 billion RMB in product and technology platform research and innovation. For ANTA, we developed the Origami technology and launched Origami Running Shoes, which is a cushioning and rapid rebound technology. After the launch of the first generation Origami technology, it had received good recognition from consumers. And then let's look at operating profit margin. In the first half, our operating profit was up 16 percent at $11.7 billion. Operating profit margin, 27 percent, up 0.7 percentage point year-on-year. Enter Brent, operating profit margin was down 0.8 percentage point. It is at 22.5%. This is mainly because of advertising expenses increase in Milan Winter Olympics. And then R&D expenses increased is another reason. Filabrand operating profit margin was up 1 percentage point at 28.7%. This year, We improved our operating quality. We closed down some low productivity stores so that overall store productivity increased further. We also reasonably controlled our marketing expenses. Quality improved, so that's why there is an increase by one percentage point. All other brands' operating profit margin was 33.1%, down 0.1 percentage points. So if you look at various brands, each brand's operating profit margin increased. So this is a structural factor leading to slight decrease in overall operating profit margin for all other brands. Profit attributable to shareholders including MR Sports up 12.9%. 18.2% is the profit margin for profit attributable to shareholders, the best in the past five years. And our dividend payout ratio is 50.3%. Interim dividend is HK$0.151 per share. So we are creating continuous and stable long-term return for shareholders. Working capital management. Inventory turnover days last year was 136 days. It came down... to 130 days, a decrease of six days. So, inventory turnover days decreased for almost all brands. In the first half of this year, in terms of operations, we will put in place several big moves to manage our inventory first. We will strictly control OTP into various brands, various categories. And then for Enter Group D2C model, well, we adopt D2C model. So for Enter Brand franchisees inventory, we introduced a number of measures. For franchisees, if there is inventory leak, then we will repurchase them to make sure that the omnichannel inventory is at healthy level. And internally, we have set some management leverages. to expand online-offline deployment of inventory so as to clear inventory. So in terms of inventory turnover days, it decreased by six days. It is not easy. This year, our revenue was up 13 percent. Inventory did not grow. It actually came down slightly year on year. So right now, our inventory for various brands is at around five, which is a healthy level. Some brands will see a lower number. And then our cash. In the first half of the year, our operating cash inflow was 13.08 billion RMB, an increase of 2.15 billion. and our cash collection rate is 107%. This is a very strong cash generation capability. Net free cash inflow was 11.63 billion, an increase of 4.1 billion year on year. We have 62.6 billion RMB in cash and deposits at the end of the period and interest bearing liabilities 23.49 billion. net cash $39.11 billion, up 23%, indicating a very sound financial position. In the first half of this year, if you look at our operating quality metrics, for example, inventory days down six days, cash flow up 20% year-on-year, operating profit margin 27%, up 0.7 percentage points year on year. So these are numbers related to operating quality and they are moving towards the positive side. This is because this year our group puts high quality growth as at the top for management. So we do not pursue only short-term retail sales growth. So the core is the quality. So in relation to high quality growth, We want to strengthen planning and management. That's the model. So for strong planning in terms of procurement, we have made plans to ensure that omnichannel inventory will be healthy. Then in terms of channels, this year, as Mr. Lai explained, we strictly control store opening quality. From top to bottom, we give guidance about store opening, about organization. We also made much investment. So we adjusted our organization so that it is in line with business growth and then for expenses. Input and output would be more efficient. So overall goal is that when there are challenges in the overall industry and market, our group will rely on our multi-brand strategy and we'll maintain our resilience. We go for long-term and sustainable development. That is our first goal and most important goal. Thank you all. And that's all in my report. Thank you, Mr. B. sound profitability, healthy operating metrics, and continuous investment into the future. With these three factors, well, our group had completed these three points at high level in the first half of the year. Now, let's ask Mr. Lai to give an outlook. Looking into the second half of 2026, there is still a lot of uncertainty in the external macroeconomic environment. But the long-term trend of sports consumption remains unchanged. China's sports, footwear and apparel industry will maintain stable operation, exhibiting an overall pattern of large and stable with high growth in segmented sectors, while outdoor professional sector will maintain high growth momentum. Our group will continue to uphold our long-term strategy of single-focus, multi-brand and globalization. So based on different growth stages of various brands, we will formulate business strategies to maintain the health of each brand, clarify the brand positioning and the original target audience of the brand and continuously create irreplaceable value for them. For Enter Brand, we are deeply rooted in our core positioning as a professional sports brand, and Enter continues to make breakthroughs in core categories and products while optimizing operational quality to maintain steady and sustainable growth. For Fila Brand, we serve urban middle-class women and other core demographics, so we will continue to innovate our products and enhance brand image online, expanding its leading position in the high-end fashion sports market. and also in golf and tennis, Descente. Maintain mindshare leadership in core product categories, continue to develop a portfolio of hero products and serve the target customer groups with top tier retail channels and membership systems. Collins Sports will maintain high growth in core product categories such as shell, apparel and footwear and continue to penetrate the promising southern markets and high tier cities. Besides, we also have Maya Active and also Jack Wolfskin. After a period of adjustment, the brand new products and brand new store formats can be seen in major cities in the second half of the year. So we have brand new image and products. So let's look forward to these two incubated brands making bigger contribution to our group. Thank you all.