Diversified Channels and Improved Product Management Brings Growth Momentum

HONG KONG, CHINA - MediaOutReach - 27 October 2020 - The leading international sportswearbrand enterprise in the PRC, China Dongxiang (Group) Co., Ltd.("China Dongxiang" or "the Company", together with itssubsidiaries, "the Group", HKEx stock code: 3818) announces its operational results for the threemonths ended 30 September 2020 (2QFY2020/21) 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 overallplatform registered a mid-single-digit growth on a year-on-year basis, of whichthe offline business recorded a flat growth, and the e-commerce businessrecorded a mid-to-low thirties growth. The retail performance of the overallplatform for the 1H FY2020/21 recorded a low-single-digit growth on ayear-on-year basis, of which the offline business recorded a mid-single-digitdecrease and the e-commerce business recorded a mid-to-low thirties growth.

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

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

Mr. Zhang Zhiyong, CEO, Presidentand Executive Director of China Dongxiang, said, "Sincethe implementation of ''direct-franchise'' model, the Group has continued toreform. Interim progress has been achieved in Kappa brand business which hasbeen in line with management's expectation. During the Period, growth momentumof the offline sales was principally derived from structural optimisation ofchannels as well as continuing steady growth in business performance of outletsand shopping centres. Meanwhile, the Company has made progress in reform andconstruction of the product management and design team. Through a series ofeffective measures, apparel product ranges were further diversified in theperiod, registering a growth in mix-and-match sales. In addition, we aredeveloping a new business platform which helps to build a solid foundation forthe development of our e-commerce business. The Company will continue toimplement localised management of sales teams, further accelerate themerchandise turnover in omni-channel retailing and strengthen the professionalcapabilities of product teams. We will closely monitor the changes of the pandemic, strengtheningsupervision and control over our operations to protect the Group's value andshareholders' interests."

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

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

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