ANTA Brand Releases 5-year Strategic Targets and a 24-month Acceleration Plan LEAD TO WIN

Key points

5-year strategic targets:

ANTA brand's compound annual growth rate (CAGR）of the retail sales of the next 5 years will reach 18-25% and that of online retail sales will exceed 30%. Online business will account for 40% of total retail sales by 2025. Increase and improve stores in first-,second- and third-tier cities,so that they contribute to over 50% of total retail sales. Double the number of stores in shopping centers.Increase ANTA's total market share by 3-5 percentage points and maintain its leading position among Chinese sports brands.

ANTA Brand's core strategies: Rooted in and known for performance sport,brand transformation.

The 24-month Lead to Win acceleration plan will mainly focus on the following8 aspects：

Rooted in performance Sport: continue to sponsor outfits for the Chinese National teams,leading the brands' innovation and R&D capability.;

Leverage its global advanced sports R&D capability: In the next 5 years,ANTA is to invest over 4 billion yuan to improve its global R&D system,in a move to increase the proportion of high-end products to gradually capture the market of mainstream consumers with core technology;

Give top priority to products and centralize resources to gain breakthrough in core sports categories: ANTA will continue to invest in core sports categories,including running,basketball and women's series. By 2025,it plans to increase the annual sales volume of running shoes from 20 million pairs to 40 million pairs and that of basketball shoes from 6 million pairs to 12 million pairs; and the retail sales of women's wear will be close to 20 billion.

Seize the opportunity of the "Two Olympics": Aim at the "Two Olympics" (2020 Tokyo Summer Olympics and 2022 Beijing Winter Olympics).,ANTA will lead Olympic marketing by rolling out the branding concept of "Sports for life,Anta for China",and will capture mainstream business districts in first- and second-tier cities by developing "Champion Series" high-end products and setting up "ANTA Champion Stores".

Win and Lead Generation Z: Target emerging sports favored by Generation Z by working closely with high-quality idols and athletes with strong sports attributes and being popular with young people,such as Wang Yibo and Gu Ailing; foster a young-people-oriented designer platform; and cooperate with KOLs from all walks of life to extensively interact with Generation Z on social media.

Accelerate DTC transition and digitalization: Consolidate advantageous multi-level channels and increase exposure on mainstream channels as well as the number of stores in first-,second- and third-tier cities and shopping malls; in the next 24 months store efficiency will jump over 40% and DTC marketing will contribute 70% of total retail sales thanks to higher product efficiency and strengthening the fast replenishment model and integration of omni-channel and products.

Invest over 400 million yuan in digitalization in the next 24 months; the number of effective members will double to 120 million by 2025,with a member contribution rate of 70%,and a repurchase rate of 40%; optimize the private traffic system in order to increase its retail sales to over 20%; improve product efficiency through digital revolution,increasing the five-month sell-out ratio to 75% in the next 24 months;

Maintain the leading market position of ANTA Kids: focus on running,outdoor activities,football,and basketball,strengthen the technology R&D of children exclusive sports,and sponsor sports events and training camps for children; online business is expected to account for over 40% of the total by 2025 through optimizing the channel structure; the market share will increase significantly,consolidating ANTA's leading position in the children's sports market;

Promote sustainability and sports welfare: Invest 600 million yuan in sports welfare in the next three years to support rural revitalization; further ESG construction and sustainability R&D; ANTA and WWF,the world's largest environmental protection organization,join hands to help the green transformation of over 3000 scaled textile suppliers in the industry and promote biodiversity conservation.

XIAMEN,China,July 8,2021 -- Today,ANTA Group (stock code: 2020.HK) announced a five-year strategic targets and a 24-month acceleration plan "Lead to Win" for its ANTA brand. ANTA brand aims to achieve a 18-25% CAGR increase in retail sales in the next 5 year; making its CAGR increase of online business to over 30% and then to 40% in 2025; consolidate multi-level high-quality channels,open more stores in the first-,with retail sales generated from these channels accounting for over 50% of the brand's total; double the number of stores in shopping centers; increase overall market share by 3-5 percentage points,and maintain ANTA's leading position in Chinese sports brands.

ANTA Brand Releases 5-year Strategic Targets

ANTA will lead Olympic marketing by rolling out the branding concept of “Sports for life,Anta for China”

Two strategies are at the core of ANTA Brand in the coming 24 months — rooted in performance sport and brand transformation. Through core measures such as leveraging its global sports R&D capability,winning the Generation Z,seizing the opportunities of the "Two Olympics",accelerating DTC transition,succeeding the digitalization,maintaining the leading position of ANTA Kids brand and promoting sustainable development,ANTA aims to sharpen its competitive edge in the Chinese market in sports R&D,branding and market scale. Taking the Olympics as the high ground for brand transformation,ANTA will fully seize the historical opportunity of the Two Olympics to make ANTA the go-to performance sports brand for Chinese people.

According to Ding Shizhong,Chairman and CEO of ANTA Group,"30 years on,ANTA has maintained growth for seven consecutive years through multiple reforms and transformation and became the first place in market share in China. What is exciting is that the sportswear industry in China has entered a golden age. Taking advantage of the accumulated sports resources over the years and the love of Generation Z for Chinese brands,I believe that ANTA brand has the potential and ability to achieve accelerated growth to lead the market. ANTA will not only help national professional athletes improve their performance through our world-class R&D innovation capability but also will apply the premium-quality technology and materials to mass products to provide sports-lovers with more professional choices. ANTA is also committed to promoting sustainable development and green growth,and fulfilling social responsibilities. I believe that after over 30 years of acceleratedtransformation,ANTA brand will achieve rapid growth in the next 24 months and become a leading sports brand in China."

To invest 4 billion yuan in R&D in 5 years

"Rooted in performance sports" means ANTA takes professionalism as the foundation of the brand. In the next five years,ANTA plans to invest more than 4 billion yuan in R&D to strengthen its core capabilities in technological innovation.As a brand that has sponsored eight Olympic Games and 28 Chinese national teams and owns more than 1,400 national patents,ANTA will continue to sponsor outfits for more national teams while improving innovation and R&D capabilities; at the same time,ANTA will accelerate the independent R&D and iteration of technologies for general sports products,and constantly improve the global distribution of innovation resources,especially the five design centers in China,the United States,Japan,South Korea,and Italy. ANTA will deepen the industry-university- research cooperation with universities and research institutions,such as Tsinghua University,integrate the global high-quality strategic supplier system,and establish strategic partnership with world-leading materials and chemical suppliers to build an innovative platform that is based on internal and external integration,and maintains continuous innovation in the professional sports market.

To take a lead in basketball,running and women's series by being more professional

ANTA will continue to focus on the two core categories that can best present its professionalism: running and basketball.Meanwhile,ANTA will step up efforts to develop women's series.

In terms of running products,upholding the concept of "Born for runners and Evolved for Runners",ANTA will apply cutting-edge technologies to build a nitrogen technology platform and a running product matrix to make breakthroughs in high-end product lines,so as to establish ANTA as a professional sports brand. Leveraging big data,ANTA aims to provide professional outfits that is most suitable for Chinese runners of all levels through in-depth research on the feet shape and running habits of Chinese people. ANTA running will support world-class sporting events and top runners,cultivate youth runners,and support Chinese runners to compete in international events. ANTA running's goal for 2025 is to increase the volume of running shoes from 20 million pairs to 40 million pairs.

Built on the advantages of the basketball category in the market,ANTA will continue to invest heavily in basketball products,and introduce world-class product design resources tobring the design and innovation of ANTA basketball products to a whole new level. While continuously sponsoring top international basketball stars by providing them with highest qualities products,ANTA also aim to expand its market share through our comprehensive product portfolio and investment in potential All-star team. ANTA Basketball will also vigorously develop outdoor and campus sports,invest in the "Shock the Game" IP developed by ANTA,and use junior high basketball league as an entry point to develop the campus sports in China. ANTA aims to create a basketball brand that represents the younger generation and a basketball culture of Chinese youngsters. ANTA's goal for 2025 is to increase the volume of basketball shoes from 6 million pairs to 12 million pairs.

ANTA will step up efforts to develop women's series. With the sports that women love as the core,ANTA will create a newly defined category driven by Innovation with Aesthetics. First,ANTA will make the best women's trousers by applying brand new and premium technological materials,patterns and in-store displays; second,ANTA will partner with top suppliers in the industry to launch a series of popular products; third,ANTA brand will integrate R&D resources,IP crossover series,brand endorsers and other resources into design of women's exclusive series and develop running and sports shoes aimed solely at women. The brand expect the retail sales of women's series by 2025 will be close to 20 billion yuan.

To expand product series whose retail sales reach more than 1 billion yuan by winning Gen Z

The Generation Z who were born after 1995 are growing rapidly into one of ANTA's main consumers. ANTA announced key initiatives to embrace the young people. First,expanding ANTA's product series based on emerging sports favored by young people and work closely with celebrities like Wang Yibo and Gu Ailing with strong sporting attributes; second,strengthening product designs for young people,and build a platform comprised of young designers to create products that fit young people; third,strengthening ANTA interaction with young people,for example,ANTA can invite young KOLs in marketing,or taking root in the sports communities to gain further recognition.

To seize the opportunity of the "Two Olympics" and launch "ANTA Champion Stores"

ANTA focuses on seizing the opportunity of the "Two Olympics" (2020 Tokyo Summer Olympics and 2022 Beijing Winter Olympics)". The Olympic Games is at the peak of competitive sports. ANTA will intensify investment and marketing,release the power accumulated over the years,the brand will increase our investment and introduce the brand concept of "Sports for life,to highlight ANTA's sporting spirit,build a professional sports brand image,and promote the development of national sports.

ANTA will launch brand-new "ANTA Champion Stores" in mainstream business districts in first- and second-tier cities. Through professional and quality image and products,ANTA will create a distinct feature of its own and the store is going to be a new growth driver leading the brand to make breakthroughs. The Champion Store will promote the stories of the Chinese national teams and the behind-the-scenes life of the Olympic athletes. ANTA will also introduce "Champion Series": a full-category of high-end product series including professional sportswear products and a combination of lifestyle and leisure products which incorporate the materials and technology adopted by the national team.

To speed up the DTC transition and lead the core channels

In 2020,ANTA has launched the DTC (direct-to-consumer) transition. So far initial results have been achieved in terms of product efficiency,store efficiency,and human efficiency. In the next 24 months,ANTA expects the contribution of DTC business to the total retail sales to reach 70% and store efficiency to increase by 40%. On the one hand,ANTAwill implement channel transformation and lead the core channels: increase the proportion of mainstream channels by increasing our presence in first- to third-tier cities as well as increase the number of stores in shopping malls with growing CAGR to over 30%; on the other hand,ANTA will improve product efficiency through enhancing the omni-channel,strengthening the fast replenishment model and integration of omni-channel and products,to improve product efficiency.

To win the digitalization with an investment of over 400 million yuan in 24 months

Digitization is the key driver of DTC's transformation. ANTA brand plans to invest more than 400 million yuan in the next two years to enhance its digital capabilities. On the one hand,it will strengthen the operation and content production of its own media platforms such as its official website,optimize the whole journey management of each consumer touch point,and enhance consumer stickiness; on the other hand,ANTA continues to strengthen its membership system to enhance the value of the membership experience and maintain the diversity of different platforms. By 2025,ANTA plans to double the number of its members to 120 million,with the member contribution rate reaching 70% and the member repurchase rate 40%; optimize the private traffic system through livestream ecommerce and KOL to increase the proportion of retail sales generated from this sector from less than 10% to over 20%; improve product efficiency through digital revolution,and increase the five-month sell-out ratio to 75% in the following 24 months. At the same time,ANTA will strengthen the intelligence of production and supply chains,so that products can be delivered to consumers faster and more efficiently.

To consolidate the leading position of ANTA Kids

ANTA Kids' development strategy takes children's exclusive sports technology and omni-channel operation efficiency as its core competitiveness. It plans to maintain sustained high growth online and offline,and improve the efficiency of omni-channel operation by integrating omni-channel crowd operations and membership marketing in online and offline stores. In the coming five years,Anta Kids aims to maintain high growth in store efficiency with online business accounting for over 40% of its total. The market share is expected to increase significantly,and ANTA Kids' leading position in the children's sportswear market will be consolidated.

Anta Kids will work with research institutions to increase the R&D of exclusive technology for children's sports protection and promotion,and become an industry pioneer in the research on the data of children's foot shape and posture while doing sports; develop products for four major scenes,that is,"running,basketball,and football" and apply more technologies in children's sports protection; at the same time,by sponsoring children's sports events and training camps,Anta Kids tries to be a leader in the development of children's healthy sports. In terms of channels,Anta Kids will continue to increase the proportion of stores in shopping malls and the number of integrated stores,and realize "one family,one-stop" shopping experience.

To promote sustainability and sports welfare

ANTA also announced its plan to continue to promote the R&D and innovation of sustainable and eco-friendly products. Besides publishing ESG reports for five consecutive years,ANTA also set its clear ESG goals and its aim to strengthen cooperation with international environmental protection organizations. ANTAhas worked jointly with WWF,leveraging its global network and resources,and in accordance with the United Nations SDGs,to participate in the continuous improvement of water,energy utilization,waste discharge and supply chain management of over 3000 large-scale textile suppliers. Also,it will join hands with hundreds of millions of consumers to protect biodiversity worldwide and encourage the use of renewable and eco-friendly materials in plastic packaging bags. In terms of social responsibility,ANTA will continue to invest over 600 million yuan in the next three years in the "Happy & Healthy Growth Charity Program" that benefits a total of 7 million young people in underdeveloped areas,and participating in China's rural revitalization through sports welfare.