Tebu Announced The Full Year Performance Of 2021, And The Group'S Revenue Set A New Record Of RMB 10.13 Billion

Group revenue set a record of RMB 10.13 billion, up 22.5% (2020: RMB 8.172 billion)

The revenue of main brands of Tebu increased strongly, setting a record of RMB 8.841 billion (2020: RMB 7.101 billion), up 24.5%, mainly driven by the revenue growth of more than 34% in the second half of 2021, a significant increase compared with 12.4% in the first half of 2021

The group's gross margin increased to 41.7% (2020: 39.1%)

The group's operating profit increased by 52.1% to RMB 1.396 billion (2020: RMB 918 million)

The share of the company's common equity holders' profit increased by 77.1% to RMB 908 million (2020: RMB 513 million)

It is suggested that a final dividend of HK $13.5 per share (2020: HK $7.5 per share) be paid, and shareholders may also receive interest bearing shares in lieu of cash. Together with the interim dividend of HK $11.5 per share, the annual dividend ratio is about 60.0% (2020: 60.0%)

As of December 31, 2021, the group has 6151 Tebu brand stores in mainland China and overseas

As of December 31, 2021, gaswell and paladin have 44 and 57 stores in the Asia Pacific region respectively. With the development of the group's business in mainland China, the fashion and sports business is expected to improve gradually in 2022

As of December 31, 2021, sokoni and Melo have 44 and 6 self operated stores in mainland China respectively. It is expected that they will continue to open stores in higher line cities in 2022

Hong Kong, March 16, 2022 - China's leading professional sporting goods company XTEP International Holdings Limited (the "company", together with its subsidiary "group") (Stock Code: 1368. HK) today announced its audited results for the year ended December 31, 2021 ("2021" or "within the year").

In the context of macroeconomic instability, XTEP Still able to close 2021 with satisfactory financial performance. The group's revenue set a record of RMB 10.13 billion (2020: RMB 8.172 billion), breaking through RMB 10 billion for the first time, doubling compared with RMB 5.113 billion in 2017. The revenue growth of main brands of Tebu was strong, reaching a record of RMB 8.841 billion (2020: RMB 7.101 billion), up 24.5%, mainly driven by the revenue growth of more than 34% in the second half of 2021, a significant increase compared with 12.4% in the first half of 2021. The group's gross margin increased to 41.7% (2020: 39.1%). The group's operating profit increased by 52.1% to RMB 1.396 billion (2020: RMB 918 million). The share of common equity holders in the company's profits increased by 77.1% to RMB 908 million (2020: RMB 513 million). The basic earnings per share is 36.4 points (2020: 20.8 points).

The board of directors intends to pay a final dividend of HK $13.5 per share (2020: HK $7.5 per share), and shareholders may also receive interest bearing shares in lieu of cash. Together with the interim dividend of HK $11.5 per share, the annual dividend ratio is about 60.0% (2020: 60.0%).

Mr. Ding Shuibo, chairman and chief executive officer of Tebu International Holding Co., Ltd., said: "2021 marks the 20th anniversary of the establishment of the company. In the past 20 years, it has witnessed the ups and downs of the sporting goods industry in mainland China, and has developed into a world-famous sporting goods company with unprecedented achievements. It has benefited from the" four five year plan "period from 2016 to 2020 With the success of the plan, the group has transformed from a domestic company into a mature global enterprise. In 2021, we released a new "Five Year Plan", which opened another milestone for our business. With our impressive growth momentum, the revenue target of the main brand of Tebu is RMB 20 billion in 2025, while that of the four new brands is RMB 4 billion. With the promotion of health awareness in the mainland of China, driving the sports boom, and the support of the state for the sports industry, the sports goods industry in the mainland of China is bound to have a bright and long-term development prospect. We are optimistic about the business development of the group in 2022 and beyond. "

Business Review

Mass movement

　　 XTEP

During the year, the group continued to consolidate its running ecosystem, strengthen research and development capabilities for running, revitalize product design, strengthen cooperation with professional marathon runners, and cultivate running groups in mainland China. The group has more than 1.3 million tebute members, successfully consolidating its moat in the running market. On the other hand, Tebu adheres to the customer-oriented values, promotes brand value by upgrading retail channels, and integrates Chinese cultural elements into its products to attract the younger generation.

product

　　 XTEP The main brand provides high cost performance, professional and fashionable sporting goods for mass market customers. Running has become an indispensable part of the special step brand. The group's brand-new professional carbon fiber board running shoes "160x" series ranked first among all running shoe brands, and surpassed the international brand for the first time in the world track and field white gold standard competition Xiamen marathon in April 2021, and the wearing rate exceeded 50% [1]. Since its launch in March 2021, this series has attracted the attention of the whole running community and won many awards from the runner world. In October 2021, Tebu 260 broke the sales record of professional running shoes, selling more than 5000 pairs in 24 hours. In line with the policy of sports power, the group launched the special 100 series in December 2021 to help teenagers participate in a wide range of school sports activities.

Special step launched a new high-end brand "xDNA", featuring high-end fashion sports products and displaying Chinese cultural elements. This brand marks a new era of "new national trend" and resonates with customers who are not satisfied with blindly following the trend. Since Deli Reba became the group's latest brand spokesperson in August 2021, the group has strengthened its partnership with her by launching a new women's wear series "half sugar" to promote the special step boom among young female customers.

Retail management and e-commerce

During the year, the group stepped up efforts to upgrade its retail channels, and launched more and larger ninth generation flagship stores. The 9th generation retail stores have a large average total area, a wide range of products and immersive design, which can improve the store efficiency and brand strength. As of December 31, 2021, the group has 6151 Tebu brand stores mainly operated by authorized dealers in mainland China and overseas.

The digital shift of consumer behavior also accelerated during the outbreak. The group quickly transferred its marketing and sales resources to social media platforms, such as tremolo and xiaohongshu, and made full use of live e-commerce. Tebu's e-commerce business achieved strong year-on-year growth, accounting for more than 30% of the revenue of the main brands of Tebu in 2021.

Marathon and running sponsorship

Although some marathon and running activities have resumed in the first half of 2021, many international and major sports events have been cancelled or postponed due to the repeated outbreak of the new crown in the mainland of China in the second half of 2021. During the year, the group sponsored seven marathon and running events to enhance public health awareness and accelerate the development of national sports. Among the events sponsored by special step, the 2021 Xiamen marathon is one of the most famous marathons in mainland China, and has won the world track and field "elite white gold standard" certification.

Special run clubs and sports stars

During the year, the group accelerated the establishment of special run club to further consolidate the special step running ecosystem. The special run club provides one-stop professional running services, including running consultation and running group support, so that the group can sell the products targeted. As of December 31, 2021, there are 30 special running clubs and more than 1.3 million special running members in mainland China.

The group has sponsored 25 professional athletes to participate in various sports in mainland China to enhance their influence in the sports industry.

Special children

On the basis of the successful restructuring of products, brands and retail network management, the group witnessed the accelerated growth of children's business since it cooperated with Shaolin to launch children's sporting goods combined with "Guochao" elements. As of December 31, 2021, there are 1179 outlets for children in mainland China.

Fashion sports

Gaswell and Paladin

In 2021, the revenue from the fashion and Sports Division was RMB 971 million, accounting for 9.7% of the group's revenue. The overall performance of the fashion and Sports Division is expected to improve in 2022 as the negative impact of the new crown on the group's overseas business is gradually reduced and the group's business expansion in mainland China.

Gaswell has made great efforts to restructure its business in mainland China and reposition its brand. Its flagship store and physical store of tmall will debut in the mainland of China for the first time in January 2022, marking the completion of brand reconstruction. In 2022, more iconic stores will be opened in the capital cities of mainland China. As of December 31, 2021, gasway has 44 self operated stores in the Asia Pacific region.

In 2021, the Group strives to optimize its product portfolio and Palladin's retail network in mainland China. Paladin's image store will continue to launch in 2022 and further adjust its product mix and design to increase store efficiency. As of December 31, 2021, Paladin has 57 self owned stores in the Asia Pacific region, of which 25 are located in the mainland of China.

　 Professional sports

Sokoni and melo

Revenue from the professional sports division recorded a strong year-on-year increase of 180.2% to rmb201 million. During the year, soconi successfully demonstrated its growth potential in mainland China with its proud store efficiency and increased recognition among elite runners.

In 2021, sokoni will continue to open stores in prime locations and high-end shopping malls in mainland China's high-end high-end cities, and the first image store will be opened in Shanghai's brand-new leisure hot spot and high-quality commercial landmark, Shanghai Xingye taikoohui. In 2022, more sokoni and Maile stores will be opened in high-speed cities in mainland China. As of December 31, 2021, sokoni and Melo have 44 and 6 self operated stores in mainland China respectively.

During the year, sokoni was committed to expanding e-commerce and using various e-commerce platforms to reach a diverse customer base. Driven by the rapid growth of emerging e-commerce platforms, the total volume of commodity transactions of sokoni and Melo reached 140% and 138% respectively year-on-year growth.

expectation

The state's support for the sporting goods industry and the preference of more young generations for domestic brands further enhance the group's confidence in the business prospects of the group in 2022 and beyond.

The next few years , special step The main brands will continue to drive the growth of the group. The group will maintain flexibility in product innovation and actively promote special step running clubs in mainland China to consolidate the running ecosystem and continue to make steady progress towards the group's long-term goals. At the same time, the group will optimize its distribution channels and open more "ninth generation retail stores" to improve store efficiency and increase market share. The group will also follow the trend of "national trend" to provide more new leisure and fashion sports products for the main brand of Tebu and the new brand "xDNA".

The four new brands remain the driving force for the group's sustainable growth. As far as soconi and Melo are concerned, the group will continue to increase the brand awareness of the two brands in mainland China by accelerating the opening of stores in mainstream shopping centers in high-speed cities and increasing the supply of clothing and localized products. The Group expects to launch gaswell stores in the provincial capital city in the first half of 2022, which will become a solid pillar for its future expansion in high-speed cities. The group will also strive to continuously improve the product portfolio planning according to market response, so as to give full play to the potential of gaswell gene. Paladin's e-commerce business and retail network will be continuously optimized to maximize the o2o synergy effect. Together with image stores that launch new product lines, it is expected to bring positive effects.

Group to mainland China sports goods The long-term outlook for the industry remains optimistic. The multi brand strategy helps the group to meet the diversified customer needs from mass sports to professional market segments. The solid and stable "Five Year Plan" will lead the group on the right track and continue to grow at the best speed for a long time.

[1] data source: yuepao lap (April 2021) - sports shoes worn by participants who completed the race within three hours of the 2021 Xiamen marathon

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