ASPIRATION TOWARDS THE SUMMIT WHILE CONTINUING TO FORGE AHEAD!

I would like to extend my gratitude to everyone for your joint efforts in climbing to new heights with Bosideng. On behalf of the Board, I am pleased to present the Group's annual results for the year ended March 31, 2022.

FY2021/22 marks the beginning of the Group's new three-year strategic plan. Sticking to the strategic direction of "focusing on principal business and key brands", the Group started the new journey of becoming the "world's leading expert in down apparel" in the next three years. Revenue hit a record high again during the Year, amounting to approximately RMB16.21 billion, representing a year-on-year increase of 20.0%. Profit attributable to shareholders amounted to approximately RMB2.06 billion, representing a year-on-year increase of 20.6%. To thank the shareholders for their continued support and recognition, the Board recommended the distribution of a final dividend of HKD13.5 cents per share for the Year. This, together with the distributed interim dividend of HKD4.5 cents per share, the dividend distribution rate during the Year was 80.2%, continuously generating steady returns for our shareholders.

Striding towards new heights and steadily evolving as a market leader

In FY2021/22, against the backdrop of the convergence and combination of changes unseen in a century, coupled with the challenging situations arising from the global pandemic, complex and volatile external landscape, the accelerated reconstruction of the global economy and social order, and challenges in cross-border trade and the supply chain, China had been a stabilizer and catalyst of the recovery of the global economy. Determined and composed, Bosideng has positioned its brands from a global perspective, leading the development of a comprehensive system of products, channels, retail and supply chains to achieve the development goal of sustainable, steady and high-quality growth. According to the down apparel market position claim published by Euromonitor International, "both the revenue and sales volume of Bosideng down apparel ranked first worldwide".

Based on international vision and leading brand value

As the Group sticked to brand confidence, stayed committed to brand leadership and continued to lead the industry in innovation, Bosideng ranked first in the industry in terms of awareness rate, net promoter score (i.e. NPS) and level of brand reputation, etc., and was included in the ranking of "Brand Finance Apparel 50" by Brand Finance for two consecutive years. Bosideng was granted long-term credit ratings of "Baa3 (stable outlook)" and "BBB-(stable outlook)" by Moody's and S&P, respectively, and became the first company in the branded apparel industry in the Asia-Pacific region to obtain an investment grade. The "double investment grade" also demonstrated the recognition from the capital market of the Group's prudent financial policies and stable and steady financial performance, reflecting the Group's steady development resilience during the business cycle.

In FY2021/22, the Snow Flying brand continued to develop its online distribution business, further developed the "Internet+" operation model, utilized new platforms with substantial internet traffic, realized the breakthrough of new retail and the synergy of industry and ecology, and achieved rapid brand development. The OEM management business had overcome the impact on global production resources caused by the pandemic, focused on the needs of core strategic users, made good use of the Group's advantage in product development and supply chain management as a down apparel expert, and exploited the potential of the stock and incremental businesses, maintaining stable and healthy development. The fashionable ladieswear business also responded positively to the pandemic and downward pressure of the economy, remained steady and generally showed positive signs of growth.

The Group has continued to support China's winter industry and mountaineering for over 20 years, and helped Han Xiaopeng to win the first gold medal of China for winter games in the Winter Olympic Games, forming the climbing spirit of "bravely scale new heights and strive to be a pioneer and leader". During the Year, leveraging on the historical opportunity of encouraging 300 million people to participate in winter sports in the 2022 Beijing Winter Olympics, we reached a strategic cooperation with Bogner, a worldwide renowned athluxury sports fashion apparel brand, so as to explore great growth potential in the premium sport fashion market in China, which will inject innovative momentum into the medium- and long-term development of the Group.

Focusing on product innovation and leadership

Bosideng has specialized on down apparel for 46 years, continued to explore an end-to-end product development model focused on user value, and established a professional, comprehensive and three-dimensional product line, leading the development of the industry and setting fashion trends. In FY2021/22, we integrated oriental and occidental cultures, released the Bosideng original Trench-style Down Jacket and introduced a new heat-retention category in the business scenario. The composite structure camping down apparel and the environmentally-friendly and zero-pressure down apparel won the ISPO Global Design Award and the Red Dot Design Award, respectively. Climbing 2.0 series of down apparel incorporates Chinese original technologies to demonstrate that Chinese down apparel can achieve or even surpass the professional quality of down apparel from top international luxury brands. The Bosideng Testing Center was accredited as an authorized laboratory by the International Down and Feather Bureau (i.e. IDFB) and by the China Feather and Down Industrial Association, consolidating the core competitive advantages as a down apparel expert.

Focusing on targeted marketing to boost consumption momentum

We take a consumer-oriented approach and continue to promote new retail reform. In recent years, we have built a number of flagship stores offering a greater sense of experience and greater value in the core business areas of firsttier cities and new first-tier cities across the country. We focus on the marketing capabilities of key stores, deepening and expanding on online and offline integration, circle-level and community-based supply scenarios, and optimize and improve on consumer experience. Simultaneously, we break the online platform mentality, turn to brand thinking and user thinking, promote precise membership management, exert more effort on new platforms such as Douyin, explore new retail models, and drive compound growth with high-quality innovation in global retail. Bosideng's Tmall flagship store took the lead in the "Double 11" and "Double 12" events for three consecutive years, ranking first in the domestic apparel category. In addition, we targeted operational users and invested more on consumer interaction. In FY2021/22, our corporate WeChat platform attained 6.10 million new members, accumulated over 6.30 million followers on the Bosideng brand's official WeChat account and over 4.90 million fans on our Douyin official account, with a significant increase in the number of young consumers under the age of 30.

Embarking on intelligent and digital transformations to ignite the engine of development

The Group continues to implement digital infrastructure construction, the digital application of the whole value chain and digital-driven business model innovation. We have upgraded and tested our software system and big data center with our own intellectual property rights, promoted the digital intelligent transformation of associate factories, deeply integrated the new generation of digital technology with the traditional production model of down apparel, and opened up the front-end sales, mid-end inventory and back-end supply chain through production and marketing coordination. Our flexible and intelligent manufacturing of brand clothing has the ability of end-to-end quick response, while quickly and accurately serving customers and meeting market demand, it guides rapid production and replenishment, putting our intelligent and quick response ability far ahead of the industry standard. The Group has clarified that the digital transformation focuses on the three core business scenarios of "users, retail and commodities", and continuously improves the efficiency of enterprise operations through process reengineering, organizational restructuring and model innovation, so as to continuously create greater value for users.

Living up to the mission of our brand with high positive energy to focus on sustainable fashion development

In the process of the new three-year strategic transformation, the Group regards helping employees achieve internal targets, benefiting customers externally and giving back to the society and the community as its own responsibility, actively implementing the mission of the brand, fulfilling our corporate social responsibility, supporting rural revitalization and promoting common prosperity. In FY2021/22, we donated approximately RMB50 million market value of materials and cash equivalents to help Shanxi with flood relief efforts and post disaster reconstruction. Over the years, we have donated more than RMB1.2 billion to the society and was a three-time winner of the "China Charity Awards-the highest government award in China's charity field (中國慈善領域的最高政府獎項 - 中華慈善獎)". We actively explore ways to practise green products and sustainable fashion. In FY2021/22, Morgan Stanley Capital International (i.e. MSCI) upgraded the ESG (Environmental, Social and Governance) rating of the Group to "BBB", providing a leading management standard for Chinese textile and clothing brands.

Establishing strong global leading strength and opening a new chapter on the summit

Bosideng has been dedicated to the down apparel business for 46 years, adhering to the mission of "Bosideng warms the world", and strives to write the warm story of the world's leading Chinese down apparel for nearly half a century. Only by not forgetting the origin can we create the future. The year 2022 is a year of change and a year of tackling tough challenges, while the haze of the epidemic has not been dissipated. The international situation is changing and the development of the industry is facing uncertainty. Only sheer determination can be the core to support China's international voice and the global influence of Chinese brands. The Group will remain strong in strategy, flexibly respond to changes in tactics, concentrate on advantageous resources, focus on core business sectors, continuously upgrade the Bosideng brand from an international mid and high-end perspective, and strive to achieve a comprehensive global leading brand.

Establishing leadership, and strengthening young consumers' awareness

The Group will continuously and extensively exploit the representation of its brand, tell a compelling brand story and innovate brand communication as well as strengthen the professional awareness of down apparel among customers of the era, especially Generation Z. We will absorb the essence of and learn from the global fashion culture, incorporate innovation and breakthroughs, leverage on the brand's potential and influence on customers and the industry with a more open and inclusive attitude and a broader perspective.

Iterating products, and leading the trend in the down apparel industry

The Group will integrate global advantageous resources with a focus on innovative research and development and fashion design, and strive to satisfy new consumer demand from a product perspective and on a spiritual level. The Group will launch high-quality and affordable Chinese products with professional advantages and fashion designs to the global market. By grasping the winter economic development upsurge of the "post Winter Olympic Games era", we focus on the experience of outdoor functional scenes, arrange for the winter apparel equipment market such as public winter sport and urban skiing, so as to form our core competitive advantages of leading fashion, functionality, technology and quality.

Upgrading channels and accelerating the growth of digital empowerment

We will make every effort to open up business chains, pay attention to customers' value, build up a strong retail team, and enhance our cohesion and strength of mutual trust, effectiveness and results. We will improve the digital and intelligent integration of new retail, a large commodity smart cooperation platform and a large retail smart operation platform featuring whole scenarios to boost the business of the whole value chain, thus enhancing the transformation of consumption scenarios in the new era. We will continue to expand new categories, new channels and new markets, and build the core channels in core business districts in core cities according to local conditions. The Group will grasp the opportunity of the platform economy and its contents and resources to drive business growth through the high-quality development of three-dimensional whole-sector retail.

"To see a thousand miles afar, we should ascend to a higher mountain". With the stable recovery of global consumer demand for apparel products, the demand in the domestic market will return to normal. The opportunities for growth in the post-pandemic era will continue to arrive to industry-leading companies, bringing great opportunities for the Group to pursue development amid steady progress. The Group will adhere to the strategic direction of "focusing on principal business and key brands", and focus on the main development line of "fashionable functional apparel", developing professional leadership and establishing cutting-edge awareness. We endeavor to march towards global leadership in terms of brand complexity from a single sales scale with our slogan of "World Down Apparel, China Bosideng".

The brave feel no loneliness when climbing up. We will rouse ourselves on our way towards global leadership. On behalf of the Board, I would like to extend my sincere gratitude to the members of the Board, the management team and people who struggled for the Group for their perseverance and dedication. And I also hope our shareholders, partners and customers around the world can trust and support Bosideng as always. The Group will stay true to its original intention and mission of "Bosideng warms the world", and carry forward the corporate spirit of "overcoming difficulties, keeping abreast with the times, fighting cooperatively, striving for the best", innovate the mechanism for symbiosis and co-creation of shared corporate value, constantly provide consumers with higher-quality and worthy services and products, and create value for the good life of the people.

Gao Dekang
Chairman and President
June 23, 2022