Chairman Statement

In 2019, despite the shadow of the China-U.S. trade war, China’s economy still managed to achieve a moderate growth. The total retail sales of consumer goods exceeded RMB40 trillion for the first time, representing an increase of 8% over last year, becoming the greatest driver of China’s economic growth for 6 consecutive years. In recent years, the Group has been committed to promoting the sports and retail business in response to the nationwide advocacy of the “Sports for All(全民運動)”, and has established “Mass Consumption” as its future development direction to thoroughly explore and unlock consumers’ demand potential.

In view of the growing demand for sportswear throughout the world, the Group completed the acquisition of the global trademarks and patents of compression wear brand “SKINS” in September 2019, to further expand the sports brand business and the Group’s strategic layout. It is expected that the brand will contribute stable revenue to the Group in the coming year. During the year, the Group explored its own brand “PONY” with global trading partners, and will gradually adjust its business strategy in the future to tap the opportunities brought by the current resurgence of sports trend. Furthermore, the “arena” swimming brand, a joint venture of the Group in China, maintained a steady sales growth during the year. In the future, the
Group will launch more new products and collaboration series to further increase the brand’s market share.

In addition, the Group’s Park Outlets project in Xiamen was officially open for business in the fourth quarter of 2019, providing a pleasant place for daily shopping and weekend trips for over 20 million residents in Xiamen, Zhangzhou and Quanzhou. As many as 150,000
customers visited Xiamen Park Outlets in the first week, laying a sound foundation for future operation and development. It is expected that more famous brands will be attracted to the outlets. Meanwhile, the Group’s Shenyang Park Outlets project in Liaoning Province,
improved its operating efficiency by making effective use of certain commercial area after an early reconstruction. The Group has planned to expand the commercial area in the north zone of its shopping mall in the coming year to expand the management scale of the outlets.
Moreover, the CITS Park Outlets in Anyang has developed into a landmark shopping mall that provides one-stop shopping and entertainment experience to nearby residents.

Additionally, the Group holds two community malls in Tianjin and Chongqing, have provided great convenience for citizens living in the communities. Their prominent locations and complete transport facilities will allow them to draw in steady traffic. After years of hard
work, the Group has developed “Park Outlets” into a chain outlet brand in China with a variety of large shopping malls and community malls.

Global political and economic situation remain uncertain in 2020. With the impact of the novel coronavirus epidemic spreading across the world, global economic growth may further slowdown, which is expected to have a temporary impact on the Group’s future operating
results. However, the Group still considers 2020 a starting point for the new decade, and will adhere to the development strategy of “sports brand + retail” in the past and continue to prioritize improvement of its brand management and expansion of retail scale. Finally, the Group would like to express our sincere appreciation for the support of our partners, brand tenants and customers, as well as the efforts and contributions of all employees in the past year. In the coming year, the Group will surely be able to achieve better results and continue to maximize the value for our shareholders and investors.