On behalf of the board of directors (the "Board") of ANTA Sports Products Limited ("ANTA Sports" or the "Company"), I am pleased to report the audited annual results of the Company and its subsidiaries ("ANTA" or the "Group") for the year ended 31 December 2007.

2007 was a landmark year in the Group’s milestone. With the effort of all parties, the Group was successfully listed on The Stock Exchange of Hong Kong Limited on 10 July 2007. The positive response from the global capital markets demonstrated investors’ confidence in the business prospects and competitive edge of the Group. The listing not only enhances our corporate image and governance transparency while internationalises our brand, but also allows the Group to share the fruits of our success with our shareholders. The Board proposes to declare a final dividend of HK8 cents per share in respect of the year.

During the year under review, the Group’s turnover reached RMB3,182.4 million, representing over 1.5 times increase as compared with last year. Net profit attributable to shareholders increased by 2.6 times as compared with 2006, amounting to RMB537.8 million (2006: RMB147.4 million). Earnings per share has a more than double increase to RMB25.3 cents (2006: RMB8.2 cents).

SEIZING BUSINESS OPPORTUNITY OF ECONOMIC DEVELOPMENT IN CHINA
The robust economic growth in China has brought about numerous business opportunities to the Group. In 2007, the gross domestic product soared by 11.4% to RMB24.7 trillion whilst the per capita disposable income of urban population increased by 17.2% to RMB13,786. With the rising living standard and demand for consumer goods, the total retail sales of consumer goods in 2007 amounted to RMB8.9 trillion, representing a growth of 16.8% against the corresponding period in 2006. As China is one of the leading countries in terms of urbanization and economic development, the development potential of its sportswear market should not be overlooked.

The accelerating urbanization has changed consumers’ behavior and their consumption patterns, tending towards lifestyle-enhancing products and services like sportswear products. Meanwhile, with increasing awareness of health, sports activities have become indispensable activities in peoples’ daily life which stimulate strong demand for sportswear products with high quality and functionality and at a reasonable price. Seizing these business opportunities, the Group has provided value-for-money sportswear to the consumers, and therefore achieved satisfactory development.

SPEEDY AND HEALTHY BUSINESS DEVELOPMENT
The Group continues to strengthen our leading position in China’s sportswear market and expands retail network of ANTA’s brand in China through 39 distributors. As at the end of 2007, the Group’s distributors operated 4,716 ANTA authorised retail outlets and four flagship stores in Shanghai (two stores), Shenyang and Wuhan. Meanwhile, the Group’s overseas distributors have set up authorised retail outlets in Southeast Asia and Eastern Europe, which boosted the recognition of ANTA brand in international markets. The retail business of international branded sportswear is expected to make contributions to the Group starting from 2008.

The Group will continue to emphasize on brand building and marketing, initiating diversified brand promotion campaigns including integrated marketing strategies such as event sponsorship, advertisement placement and spokesman endorsement. Meanwhile, the Group will launch comprehensive advertising promotion for featured products. These advertising campaigns can enhance our communication with consumers, single-out product differentiation and improve the brand image. The Group continues to strengthen its capability of product research and development as well as quality control to enhance the competitiveness of our products, while making appropriate expansion in the production capacity to maintain quick response to the market.

CLEAR STRATEGIC OBJECTIVES AND SATISFACTORY CORPORATE GOVERNANCE
Through conscientious analysis of the industry environment and our own edges, the Group has formulated strategic objectives and implementation plan which cater for the Company’s future development. Meanwhile, the Group optimizes our organizational management structure from time to time. This will strengthen coordination across each department, adaptability to business environmental changes, and raise the overall management and operational efficiency of the Company. As for internal corporate governance, the Group has established a number of committees which perform duties according to their terms of reference to strictly control the internal systems, conduct ongoing review to enhance measures of internal and external control so as to reach a governance standard as outstanding as that of a multi-international enterprise.

Thanks to our outstanding performance, the Group is recognized and awarded by all circles of life. The Group’s footwear has led in "composite index on market shares of sporting footwear for six consecutive years in China", awarded by the China General Chamber of Commerce and China National Commercial Information Centre. Furthermore, ANTA’s products passed the ‘‘ISO 9001 quality management system certification’’ and were again awarded the title of ‘‘State-designated Products Exempt from Quality Surveillance Inspection’’ by General Administration of Quality Supervision, Inspection and Quarantine of China. On 10 March 2008, the Group became one of the constituents in "Hang Seng Mainland Composite Index" and "Hang Seng Mainland Freefloat Composite Index", demonstrating the public recognition of the Group’s brand value and business development.

PROSPECTS
Looking forward, resulting from the rapid growth of China economy, surging consumption power of residents, urbanization as well as the change of economy mode in the PRC, demand for sportswear become increasingly considerable. Furthermore, the Beijing Olympics which every Chinese is proud of has aroused the concern about and awareness of sports and stimulate demand for sportswear. The Group will enhance the competitive edges to continuously expand the market.

Responding to the opportunities and challenges in the China sportswear market, the Group will maintain its steady expanding strategies by enlarging the national retail network as well as enhancing the recognition and desirability of the brand, aspiring for providing value-for-money sportswear for consumers and collaborating with certain international brands with market potentials.

On behalf of the Board, I would like to express my sincere gratitude to our management and all staffs for their unremitting efforts and whole-hearted attitude as well as our shareholders and customers for their support and trust.

 

Ding Shizhong
Chairman

Hong Kong, 12 March 2008