Achieves Middle Single-digit Growth in Retail Performance with Strong E-commerce Momentum

HONG KONG, CHINA - Media OutReach - 12 July 2019 - The leadinginternational 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 operational results for the second quarter of2019 (2Q2019).

In 2Q2019, the retail performance of Kappa stores (excluding Kappa Kidsbusiness and Japan business) for the overall platform registered a middle single digit growth year-on-year (yoy), of which the off-line business recorded a lowsingle-digit growthwith e-commerce business recorded a growth of 30% to 35%. The same-store-sales for the overallplatform registered a low single-digit decrease yoy, of which the off-linebusiness recorded a high single-digit decrease while the e-commerce business registered agrowth of 30% to 35%. As of 2Q2019, the number of retail stores of the Group'sKappa brand was 1,228 (excluding Kappa Kids business and Japan business), representing a net increase of 48 ascompared with that as at the end of 2018.

In 2Q2019, the Group officiallylaunched forward and reverse logistics and distribution solutions upon thecompletion of the construction of two nationwide logistics and distributioncentres, sufficiently securing prompt movement of products through omni-channeldistribution. Meanwhile, the Group has been strengthening its management andcontrol over omni-channel distribution of products by actively developing andpreparing cloud warehouse system in order to speed up the movement ofomni-channel distribution of products. Thanks to the effective marketingstrategies, the Group has maintained the growth in its online business. Inspite of the underperformed offline sales for short-sleeve products in thisquarter, sales performance of Kappa's vulcanised shoes remained strong,offsetting the negative impact from seasonal fluctuation of apparel products.

Mr.Zhang Zhiyong, CEO, President and Executive Director of ChinaDongxiang, said, "TheGroup's Kappa brand business is in a period of transformation. The Group has continuedits reforms by adopting a series of effective measures focusing on customers, channels,brands and products and made good progress with interim achievements in line withour expectation. In addition, the Group has been eagerlyattracting talents and resources of design so as to improve andoptimise its product mix. The Group will be more focused on product reform based on thebrand's target customers, injecting key driving force for the brand's growth."

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

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