Financial Results

During FY2022/23, the pandemic dealt an unprecedented blow to the overall retail market. With the optimisation measures easing the pandemic control policies introduced by the Chinese government in late 2022, offline customer traffic and the consumer market experienced a speedy recovery. The retail-end performance of sports and recreational apparel industry resumed growth. The Group continued to seize market opportunities through enhancing omni-channel deployment, optimising its business regime on an ongoing basis and accelerating its digitalisation process to improve efficiency and business performance.

During the Reporting Period, the Group registered a revenue of RMB1,679 million, representing a decrease of 12.4% YoY. Profit attributable to owners of the Group was RMB115 million (FY2021/22: loss attributable to owners of the Group was RMB$1,783 million). Basic and diluted earnings per share were RMB1.96 cents (FY2021/22: loss of RMB$30.41 cents), grew substantially YoY. The Board of Directors recommended the distribution of annual dividend of RMB1.66 cents and for the 12 months ended 31 March 2023.

Regarding fund management, the cash and bank balances of the Group amounted to RMB2,558 million as at 31 March 2023. The net asset value attributable to owners of the Company increased by 3.6% YoY to RMB9,665 million. The current ratio was 8.4 times, reflecting ample liquidity of the Group.

Operational Highlights

Deep integration of digitalisation and fashionable sportswear strengthened supply chain management
The pandemic has accelerated the change in the sales pattern of sports and recreational apparel. During the Reporting Period, the Group continued to develop digitalisation and omni-channel as part of its major strategic goals, strengthening the effective cross-regional and cross-boundary connection of online and offline operations, which significantly improved its operational efficiency. The Group also strengthened its supply chain management capabilities and optimised the aging profile of inventories through dynamic monitoring on planning, production scheduling and sales.

During the Reporting Period, the Group focused on product upgrade and optimisation of single-store efficiency to accelerate the efficient turnover of merchandise through omni-channel. As at 31 March 2023, the Group had a total of 1,025 Kappa stores (excluding Kappa Kid's stores), a net decrease of 158 stores as compared to the same period last year.

Solid adherence to a pragmatic investment approach
The global economy and stock markets experienced significant volatilities during the Reporting Period. The Group has effectively controlled its risks with a cautious approach to investment. As at 31 March 2023, the Group reported a net asset value of RMB8,741 million for its investment segment, representing a growth of 3% YoY, with investment income amounted to RMB131 million.

Mr. Chen Yihong, Chairman and Executive Director of China Dongxiang, said, "Looking ahead, given the resilience of the Chinese economy and the assurance afforded by macro-economic policies of the Chinese government, the overall economic conditions will steadily steer towards recovery. The government has introduced a number of policies for the development of national sports industry, which is favourable to the rapid development of the industry. The Group remains positive and optimistic toward China's economy and industry prospects. Going forward, the Group will continue to optimise its investment asset portfolio, strengthen cooperation with its investment project managers, advance new project investment in a prudent manner, facilitate timely and prudent divestments of invested projects and optimise post-investment and exit management to generate long-term and stable return for shareholders."

Ms. Chen Chen, Co-Chairman, Co-President and Executive Director of China Dongxiang, said, "With the optimisation of China's industry structure, Chinese consumer market has huge potential for upgrading. The Group will fully capitalise on the market opportunities and bring customers a better experience through the development of innovative and functional products to enhance our brand competitiveness. We will fully optimise our omni-channel management and promote online and offline synergies to seize the window period arising from industry transformation brought by the new consumption pattern after the pandemic. The Group is committed to fulfilling its responsibilities as a privately-owned enterprise and driving green development. The Group places a strong emphasis on green management in the manufacturing and sales process, such that our sustainability philosophy is implemented in all aspects of the Group. Going forward, the Group will continue to deepen and broaden its ESG practices in order to live up to our sustainability principles, so that we can promote the long-term development of the industry for the benefit of the society."

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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 Mainland China and Macau. Since April 2008, the Group became the owner of the brand PHENIX. PHENIX is a well-known skiing brand in the international market.

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