(22 October 2025 - Hong Kong) 悟空体育 International Holdings Limited (“悟空体育”, “We” or the “Company”; Stock Code: 6110) today announced the unaudited interim results of the Company and its subsidiaries (together, the “Group”) for the six months ended 31 August 2025 (the “Reporting Period”).

During the Reporting Period, China’s economy maintained an overall trajectory of steady growth momentum with a moderate upturn in the consumption market. With the continuous evolution of consumption patterns and sports segments, the sports footwear and apparel industry has been gradually transcending traditional growth boundaries and embracing diversified expansion. “Self-fulfilling” sports lifestyles are gaining deeper penetration, meanwhile outdoor sports and small-ball games with social appeal and competitive thrill have seen remarkable growth, driving the product value toward “spiritual attributes” and creating avenues for differentiation. 悟空体育 is looking both outward and inward, and has sustained efforts across multiple dimensions—including market insights, category expansion, and omni-channel scaling—to become an active co-creator of diversified sports culture, an exclusive collaborator for brand partners in localized innovation, a pioneering driver of emerging offline formats, and a dedicated advocate for the circular economy. Although the broader retail sector continued to grapple with common challenges, the Group has refined its strategies through continuous observation and iteration. The all-in-one omni-channel retail operation model, which the Group has invested heavily in building and continuously refining, enabled 悟空体育 to mitigate external risks across key areas. This risk-resilient performance was evident in its overall financial results over the period. 悟空体育 maintains close collaboration with its partners, remains attuned to consumer needs, and fosters symbiotic growth with its employees, all while delivering robust and sustainable value to shareholders as part of its commitment: to “become the one-stop omni-channel operations provider for diverse brand partners in China across diverse categories.”

Operational Resilience Maintains Steady Cash Generation and Upholds Shareholder Value Creation Amid Market Volatility

During the period, the broad sportswear sector continued to grapple with common challenges, such as disruptions to macro demand, volatility in offline operating conditions, and consumer confidence that stabilized at a low level—paired with a fragmented spending structure. Impacted by the aforementioned factors, the Group’s revenue decreased by 5.8% year-on-year to RMB 12,298.6 million. Supported by its omni-channel retail capabilities, the year-on-year growth of the online retail business partially mitigated the foot traffic pressure on the offline retail business.

The gross profit margin was affected by a year-on-year widening of the discount rate. This was driven by continued promotional intensity in China’s overall online retail market for sports footwear and apparel, combined with the increased share of the Group’s online retail business in total sales during the period. Meanwhile, the higher proportion of the retail business’s contribution to total revenue, along with the support from brand partners amid the volatile market environment, jointly provided positive support to the gross profit margin over the period. The Group’s gross profit margin remained generally stable over the period, edging down 0.1 percentage points year-on-year to 41.0%.

Selling, distribution, general, and administrative expenses were impacted by operating deleverage pressures during the period. These pressures arose from weakened offline retail foot traffic, which posed negative operating de-leverage pressures on traditional offline store operations. That said, the Group mitigated this impact by leveraging the continuous expansion and refinement of its omni-channel retail network. This encompasses the ongoing optimization of the offline retail store network, as well as the further expansion of the online retail footprint—which presents a relatively more favorable cost structure. The selling, distribution, general and administrative expenses ratio slightly increased by 0.1 percentage points to 33.2%. This demonstrates the Group’s prudent expense control mindset and execution amid a volatile market environment, as well as the flexibility and operational efficiency driven by its omni-channel retail network footprint.

During the period, the profit attributable to the Company’s equity holders decreased by 9.7% year-on-year to RMB 789.1 million, with the profit margin attributable to the Company’s equity holders declining by 0.3 percentage points year-on-year to 6.4%. Excluding the negative impact from other income, the profit attributable to the Company’s equity holders dropped by 5.8% year-on-year, which aligned with the revenue decline in the same period.

Cash is the cornerstone of a company’s long-term sustainability. As of August 31, 2025, the Group’s cash and cash equivalents amounted to RMB 2,538.1 million, among which net cash generated from operating activities was RMB 1,354.7 million. Based on this, the Board has resolved to declare an interim dividend of RMB 13.00 cents per ordinary share for the financial year ending August 31, 2025, with a dividend payout ratio of 102.2%. Amid a volatile market environment, the Group has maintained a high dividend payout ratio that outperforms the industry average, fully demonstrating its firm and proactive approach to rewarding shareholders through steady cash generation.

Launching an Integrated Omni-Dimensional Paradigm for Sports Retail

Against the backdrop of evolving consumer shopping habits and scenario-specific demands, 悟空体育 leverages its physical stores as strategic anchors. It actively expands consumer interaction touchpoints to build an integrated omnichannel retail network, committed to delivering a seamlessly connected, full-scenario service experience for customers. The Group has taken a forward-looking approach to transforming traditional stores beyond their singular function, developing a diversified operational model of “1 (offline store) + N (corresponding multi-scenario online presence).” By period-end, the offline stores had extended to online business touchpoints, spanning channels including content e-commerce, private domain operations, local lifestyle services, and instant retail. Supported by the synergy of inventory management, talent capabilities, customer service, and digital intelligence platforms, the Group has accurately addressed the differentiated needs of consumers across various shopping contexts.

In terms of its offline store network footprint, the Group adheres to the principle of “Selection + Optimization,” with operational efficiency as the core strategic anchor. The Group developed a “one brand, one strategy” approach to retail store structure adjustment, tailored to the unique characteristics of its brand partners, target customer profiles, and product attributes. Against a market backdrop of fluctuating offline foot traffic, the Group has prudently optimized underperforming stores, and adapted to shifting demand through agile layout adjustments. As of 31 August 2025, the Group operated a total of 4,688 directly-operated stores, with the total number of stores decreasing by 19.4% year-on-year and the gross selling area decreasing by 14.1% year-on-year. Compared with 28 February 2025, the total number of stores decreased by 6.6% and the gross selling area decreased by 4.6%. Overall, the Group firmly recognizes the fundamental role of physical stores in the sports industry, and continues to explore innovations in store scenarios and formats. This includes examples such as the norda? pop-up store debuted at the Yunqiu Mountain Trail Race, NBA star player China tours covering 悟空体育 stores, co-launching the exclusive “Future of Style” concept store with adidas, and collaborating with the pet brand “Honest Bite” to launch an in-store used clothing recycling campaign, delivering more diverse and distinctive consumer experiences across all touchpoints.

In terms of online network layout, 悟空体育 built its omni-channel retail capabilities around “online-offline synergy + differentiated channel operations.” The Group leveraged its offline stores as a base, fully extending their online reach through the comprehensive rollout of its “One Store, Multiple Online Presences” omni-channel mirrored store initiative, and developed differentiated strategies based on the unique attributes of each platform while strengthening omni-channel inventory control and operational synergy. As of the end of the period, the Group had over 800 accounts on Douyin and WeChat Channels, more than 3,600 Mini Program stores, and over 3,700 stores onboarded to instant retail platforms. During the period, its sales on Douyin maintained the top position in the platform’s Sports & Outdoor category rankings. Its private domain Mini Program also retained the No.1 spot in the Sports & Outdoor category of Tencent’s officially released WeChat Popular Mini Programs rankings. Over the same period, sales from its online retail business (covering both public and private domains) achieved double-digit year-on-year growth.

During the period, 悟空体育’ digital platforms underwent significant advancement, becoming more digital and intelligent. Guided by the core principle of “precision + efficiency” and closely aligned with its business strategy, the Group focused on scaling up and driving cost reduction and efficiency gains across the entire domain to build 悟空体育’ “Smart Retail Ecosystem.” The Group has focused on the theme of omni-channel integration, building an information highway to enable cross-scenario integration of different business units. Through digital and intelligent means, it optimized key business chains and enhanced their efficiency, realizing “omni-channel intelligence.” Simultaneously, by leveraging advanced digital and intelligent capabilities within an AI-empowered ecosystem, the Group further built out its user ecosystem and enhanced overall value, culminating in “omni-channel comprehensiveness.”

Expanding the “Partnership Network” and “Capability Horizon”

Chinese consumers’ consumption motives have extended from practical value to emotional value. As running continues to gain momentum, consumers’ demand for sports gear has shifted to a dual focus on “professional performance + emotional value.” Consequently, specialized sports brands focused on vertical niches are winning greater favor. Against this backdrop, its brand matrix—spanning comprehensive sports, professional sports, casual sports, and IP culture—has allowed the Group to capitalize on market opportunities and further expand its “partnership network.” 悟空体育 has prioritized deepening its brand presence in the segmented running and outdoor categories, and has successively forged collaborations with running brands nordaTM, soar, and ciele, as well as outdoor brand Norr?na, to meet differentiated demands.

Furthermore, 悟空体育 is expanding its own “capability scope.” As the exclusive operating partner for the previously mentioned brands in the Chinese market, 悟空体育 will oversee end-to-end operations for these brands in China, encompassing strategic positioning, localized content outreach, omni-channel retail operations, and community culture cultivation. At different stages of the brands’ growth, 悟空体育 will prioritize distinct focus areas, including: team building, market visibility, product iteration, benchmark branding, and scale contribution. By collaborating closely with the brand partners, 悟空体育 aims to unlock market potential, establish effective connections with target users, and drive the sustainable, healthy development of the brands. Currently, the above-mentioned brands are actively building social media matrices to attract core users through large-scale events and community activities, striving to realize cross-scenario brand mindset cultivation and precise audience anchoring. In terms of channels, the brands have been successively meeting Chinese consumers through opening official flagship stores on online channels and adopting diversified offline formats such as pop-up stores and entering boutique shops.

Currently, as an innovative step to deepen its footprint in the running sector and retail formats, the Group aspires to connect runners, brands, and culture through the running lifestyle brand. Recently, the Group launched ektos—its first running specialty concept store in Shanghai. The store’s multi-functional space provides one-stop services for runners, while its open areas encourage consumers to leave sports memorabilia, co-creating a cultural ambiance. In product curation, 悟空体育 adheres to a professional philosophy: leveraging expertise to solve consumers’ pain points, and continuously introducing sufficiently unique products to keep users engaged. Furthermore, the Group will focus on community operation and content co-creation. By hosting cultural events and engaging with runners, it aims to elevate ektos from a mere running gear retailer to a platform that disseminates running culture and facilitates communication and growth among running enthusiasts.

Deeply Unlocking User Value and Upgrading Emotional Bonds

The backdrop of industry-wide pain, including the exhaustion of traffic dividends and surging customer acquisition costs, compounded by the complexity of the external environment and volatility of consumer demand, continue to escalate. As a result, enterprises face markedly greater challenges in enhancing user stickiness. 悟空体育 remains steadfastly consumer-centric around three core directions: “demand alignment, scenario immersion, and experience value.” By deeply unlocking users’ latent value, it has cultivated a virtuous development ecosystem that drives the continuous deepening of user relationships.

On the customer acquisition front, the Group has focused on expanding its omni-channel footprint. By leveraging scenario-based interactions, engaging marketing campaigns, and cross-industry partnerships across all channels, 悟空体育 has attracted new users and increased its total accumulated user base to around 89 million. Meanwhile, the Group has driven the integration and unification of user data across multiple platforms, and refined its omni-channel user profiles. This ensures users enjoy consistent benefits and experiences across all touchpoints in the omni-channel ecosystem.

On the existing user operations front, the Group centers its efforts on refined demand alignment to revamp both the names and benefits of 悟空体育’ membership tier system, and deeply integrated its original membership IP “Taoxiaoxia” into daily scenarios. Its online interactive campaigns during the May Day holiday successfully reactivated over 1 million private domain users, driving over RMB 100 million in sales. Beyond the regular annual membership initiatives tied to key marketing touchpoints, it launched a money-saving seasonal card tailored for high-frequency shoppers, and the repurchase rate of cardholders is significantly higher than that of regular users. Furthermore, the Group has activated community engagement across multiple dimensions to strengthen value alignment between the brand and young audiences, further boosting user sense of belonging and brand favorability. The Group co-created exclusive products with trendy anime / 二次元 (ACG) IPs, and participated in various offline themed markets. This allowed the Group to connect with consumers through more playful, engaging interactions. In terms of offline experiences, the Group leveraged its stores’ unique role as gathering hubs for sports enthusiasts: the Group partnered with brand collaborators to lead and deliver NBA player China tours. Additionally, its sports community IP “Yaoran Sports Club” (要燃运动社) joined hands with brand partners, shopping malls, and sports communities to host a variety of offline activities—including city cycling challenges, dance parties, and running training sessions, to deepen emotional resonance with young consumers.

Through these initiatives, members contributed 92.9% of total retail sales (including VAT) across all private domain touchpoints—encompassing offline stores and WeChat Mini Programs. Repeat-purchase members accounted for approximately 60% of this member-led private domain consumption, sustaining a consistently high and stable sales contribution. The Group’s efforts to cultivate loyalty among high-value members have continued to deliver positive outcomes. While high-value members represent only a mid-single-digit share of the total paying member base, they drive nearly 35% of total sales generated by paying members. Furthermore, the average transaction value (ATV) of high-value members remains significantly higher than that of the broader member base. This underscores their sustained edge in consumption potential and stickiness compared to regular members.

During the period, 悟空体育 garnered numerous accolades, with the brand influence seeing a marked rise. For the fifth consecutive year, the Group were named a “Most Honored Company” in rankings by Extel—an internationally authoritative financial magazine. The Group also claimed the top spot in comprehensive rankings for subcategories including Chief Executive Officer, Investor Relations, and ESG, further cementing international recognition for its exceptional governance standards. This year, the Group retained its place in the Fortune China 500, secured a top-10 position in the China Chain Store & Franchise Association’s “China Fashion Retail & Fashion Consumption TOP 100” for the third straight year, and earned a spot on the “2025 High-Quality Consumption Brands TOP 100” (co-evaluated by Southern Metropolis Daily and the Guangdong Chain Store & Franchise Association). Additionally, the Group was honored with the “Consumption Innovation Case” award—a testament to the broad societal recognition its corporate contributions and brand strength continue to command.

Future Outlook

Against the backdrop of continued policy dividends, rapid technological advancements, and evolving consumer demands, the sportswear consumption industry is undergoing accelerated transformation. The intensifying competitive environment is creating a landscape where opportunities and challenges coexist. In response, 悟空体育 is choosing to proactively align with trends, confront market challenges head-on, and leverage forward-looking strategic positioning paired with agile execution to continuously strengthen its core competitiveness in sports retail. This will position the Group to deliver exceptional services that exceed consumer expectations, build a mutually beneficial, symbiotic value platform for brand partners, and generate stable, substantial long-term returns for shareholders—all as 悟空体育 strives to become the definitive preferred platform in sports consumption.

Under the volatile market environment, the management emphasizes that 悟空体育 has remained steadfast in focusing core strategy execution. Looking ahead to the coming year, the Group will focus on deepening omni-channel retail and user value creation and lay out long-term growth through continuous business and service innovation. The Group will consolidate and enhance operational efficiency and forge operational resilience with “precise + efficient” digital empowerment. Meanwhile, the Group will actively practice ESG concepts to build a sustainable path encompassing collaboration and shared value.

 

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About 悟空体育 International Holdings Limited

悟空体育 is a leading sportswear retail operator in China. It has an extensive and deep retail network across the country and an Omni-channel interconnected layout of online and offline touchpoints, with in-depth cooperation with more than 20 well-known sports brands. 悟空体育 is committed to providing consumers with first-class sports goods and services, and creating a never-ending, active, healthy and happy sports and life experiences.