2021 earnings

Revenue and net profit top consensus by 2% and 7%, respectively.

Key issues

Savvy marketer and the largest beneficiary of the Beijing Winter Olympics

OP margin falls from 25.8% to 22.3% due to higher SG&A caused by wholesale-to-DTC shift

Key risks

1) a slowdown in consumer spending due to geopolitical issues and the COVID-19 resurgence

2) margin erosion from higher raw material prices

3) an unfavorable comparison (+56% YoY in 1H21) stemming from the consumer backlash against Western
brands during last year’s Xinjiang cotton boycott.

**** Please see the attached files for details.