PEAK Gross Profit Increased By 31.8% Over The Same Period Last Year.

- turnover of RMB 1 billion 809 million yuan, an increase of 33.3% over the same period in 2009.

Gross profit was 681 million yuan, an increase of 31.8% over the same period in 2009.

The profit attributable to equity holders is 347 million yuan, an increase of 29.6% over the same period in 2009 and a net profit margin of 19.2%.

- the basic and diluted earnings per share were 16.52 yuan per share and 16.51 yuan per share respectively.

- the declared interim dividend is HK $7 per share, and the dividend payout ratio is 37%

- in June 30, 2010, PEAK authorized the number of retail outlets to reach 6796, a net increase of 590 compared to 6206 in December 31, 2009.

(August 26, 2010 - Hongkong) China's leading sporting goods brand enterprise --

Benefiting from the rapid development of urbanization in China's rural areas, a moderately loose monetary policy by the government and a substantial increase in workers' income, the sporting goods industry has maintained a steady growth in the first half of 2010.

During the review period, PEAK's profits recorded a sizeable increase.

The turnover increased by 33.3% to 1 billion 809 million yuan over the same period last year. The increase was mainly due to the increased demand for products in the market during the period and the continuous expansion of China's distribution network.

The profit attributable to equity holders is 347 million yuan, an increase of 29.6% over the same period last year. The basic and diluted earnings per share were 16.52 yuan and 16.51 yuan respectively.

The resolution of the board of directors announced an interim dividend of HK $7 per share and a dividend payout ratio of 37%.

In the first half of 2010, the gross profit margin of the group was 681 million yuan, a sharp rise of 31.8% over the same period last year, and the gross profit margin fell slightly by 0.4 percentage points.

Among them, the gross profit rate of clothing products has declined, mainly due to the increase in the direct labor cost during the period, resulting in an increase in the cost of production slightly higher than the rate of increase in product prices.

The decline in gross profit margin of clothing products has offset a slight increase in gross margin of footwear products, so the gross profit margin has declined slightly during the period compared with the same period last year.

China's second tier and three tier cities have been the focus of marketing for the group in recent years, so the new authorized retail outlets in 2010 were mainly located in two or three tier cities.

At the same time, with the increasing popularity of PEAK brand among all Chinese consumers, the group also strategically expands the retail network in the first tier cities to further enhance and enhance the brand image of the group so as to meet the needs of different customers.

During the period, the number of authorized retail outlets of PEAK has increased from 6206 at the end of 2009 to 6796 (including 28 basketball themed shops). The average area of each network has increased from 70.4 square meters in June 30, 2009 to 74 square meters in June 30, 2010.

This is consistent with the group's strategy of gradually increasing the area of new shops to showcase the increasing number of products and PEAK's brand image.

The group will increase 1000 PEAK authorized retail outlets before the end of 2010.

In addition, the group plans to increase the average area authorized to operate retail outlets from 74 square metres to 80 square metres.

In order to control the production process more effectively and respond to changes in market demand more quickly and flexibly, the group will invest about 100 million yuan in 2010, and continue to build two production facilities in Huian, Fujian and Shanggao County, Jiangxi province.

In the area of product development and design, the group is preparing to hire a professional designer team to enter the design office that the group will soon be established in the United States.

The Group believes that the brand image is the key to the success of PEAK's future development. Therefore, the group will continue to devote most of its resources to build and maintain the brand so as to enhance the internationalization and professional image of PEAK brand.

In addition to basketball, the group has started to focus on sports such as running, tennis and football, and has launched new marketing and promotion strategies to increase brand penetration and enhance market awareness of brands.

Looking forward to the future, Mr. Xu Zhihua, chief executive and executive director of PEAK sports, said: "with the Chinese government's efforts to promote domestic demand and the rapid development of the two or three tier cities in China, we are very optimistic about the prospects of the sporting goods industry.

The group will continue to adopt effective brand promotion and marketing strategies to invest most of its resources in the domestic market and some emerging markets to ensure sustained growth in the future.