ANTA Sports Products Limited

IMPORTANT

If you are in any doubt about this prospectus, you should consult your stockbroker, bank manager, solicitor, professional accountant or other professional advisers.

(Incorporated in the Cayman Islands with limited liability)

GLOBAL OFFERING

Number of Offer Shares under the Global : 600,000,000 Shares (subject to Offering adjustment and the Over-allotment Option) Number of Hong Kong Offer Shares : 60,000,000 Shares (subject to adjustment) Number of International Placing Shares : 540,000,000 Shares (subject to adjustment and the Over-allotment Option) Maximum offer price : HK$5.28 per Hong Kong Offer Share plus brokerage of 1%, SFC transaction levy of 0.004% and Stock Exchange trading fee of 0.005% (payable in full on application in Hong Kong dollars and subject to refund) Nominal value : HK$0.10 per Share Stock code : 2020 Sole Global Coordinator, Bookrunner, Sponsor and Lead Manager

The Stock Exchange of Hong Kong Limited and the Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this prospectus. A copy of this prospectus, having attached thereto the documents specified in the section headed ‘‘Documents Delivered to the Registrar of Companies’’ in Appendix VII to this prospectus, has been registered by the Registrar of Companies in Hong Kong as required by Section 342C of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission of Hong Kong and the Registrar of Companies in Hong Kong take no responsibility as to the contents of this prospectus or any other documents referred to above. The Offer Price is expected to be determined by agreement between the Global Coordinator (on behalf of the Underwriters) and us on or before June 30, 2007 or such later date as may be agreed by us and the Global Coordinator, but in any event not later than July 5, 2007. The Offer Price will be not more than HK$5.28 per Offer Share and is currently expected to be not less than HK$4.28 per Offer Share unless otherwise announced. Investors applying for the Hong Kong Offer Shares must pay, on application, the maximum offer price of HK$5.28foreachOfferSharetogetherwith a brokerage of 1.0%, an SFC transaction levy of 0.004% and a Stock Exchange trading fee of 0.005%, subject to refund if the Offer Price is lower than HK$5.28. The Global Coordinator (on behalf of the Underwriters), with our consent, may reduce the indicative offer price range stated in this prospectus and/or reduce the number of Offer Shares being offered pursuant to the Global Offering at any time prior to the morning of the last day for lodging applications under the Hong Kong Public Offer. In such a case, a notice of the reduction of the indicative offer price range will be published in the South China Morning Post (in English) and the Hong Kong Economic Times (in Chinese) not later than the morning of the last day for lodging applications under the Hong Kong Public Offer. If applications for Hong Kong Offer Shares have been submitted prior to the day which is the last day for lodging applications under the Hong Kong Public Offer, then even if the indicative offer price and/or the number of Offer Shares is so reduced, such applications cannot subsequently be withdrawn. If, for any reason, the Offer Price is not agreed between us and the Global Coordinator (on behalf of the Underwriters) on or before July 5, 2007, the Global Offering will not proceed and will lapse. The Offer Shares have not been and will not be registered under the U.S. Securities Act or any state securities law in the United States and may not be offered, sold, pledged or transferred within the United States, except that Offer Shares may be offered, sold or delivered to QIBs in reliance on an exemption from registration under the U.S. Securities Act provided by, and in accordance with the restrictions of, Rule 144A or another exemption from the registration requirements of the U.S. Securities Act. The Offer Shares are being sold outside the United States in offshore transactions in accordance with Rule 903 or 904 of Regulation S. Prior to making an investment decision, prospective investors should consider carefully all of the information set out in this prospectus, includingthe risk factors set out in the section headed ‘‘Risk Factors’’ in this prospectus. Pursuant to certain provisions contained in the Underwriting Agreements in respect of the Offer Shares, the Global Coordinator, on behalf of the Underwriters, has the right in certain circumstances, subject to the sole opinion of the Global Coordinator, to terminate the obligations of the Underwriters pursuant to the Underwriting Agreements at any time prior to 8: 00 a.m. (Hong Kong time) on the day on which dealings in the Shares first commence on The Stock Exchange of Hong Kong Limited. Further details of the terms of such provisions are set out in the section headed ‘‘Underwriting’’ in this prospectus. It is important that you refer to that section for further details.

June 26, 2007 EXPECTED TIMETABLE(1)

Application lists open(2) ...... 11:45a.m.onFriday,June29,2007

Latest time for lodging WHITE and YELLOW ApplicationForms...... 12:00noononFriday,June29,2007

Latest time for giving electronic application instructions to HKSCC(3) ...... 12:00noononFriday,June29,2007

Applicationlistsclose...... 12:00noononFriday,June29,2007

Expected Price Determination Date(4) ...... Saturday,June30,2007

Announcement of the Offer Price, the level of indication of interest in the International Placing, level of applications in the Hong Kong Public Offer and basis of allotment of the Hong Kong Offer Shares under the Hong Kong Public Offer to be published in the South China Morning Post (in English) and the Hong Kong Economic Times (in Chinese) and on our Company’s website at www.anta.com and the website of the Stock Exchange at www.hkex.com.hk on ...... Monday,July9,2007

Results of applications and Hong Kong identity card/passport/Hong Kong business registration numbers of successful applicants under the Hong Kong Public Offer to be available through a variety of channels as described in the section headed ‘‘How to Apply for the Hong Kong Offer Shares — Publication of Results’’ including the Company’s website at www.anta.com and the website of the Stock Exchange at www.hkex.com.hk from ...... Monday,July9,2007

Dispatch of share certificates on(5) & (7) ...... Monday,July9,2007

Dispatch of refund cheques on(6) & (7) ...... Monday,July9,2007

DealingsinSharesontheStockExchangetocommenceon ...... Tuesday,July10,2007

Notes:

(1) All times refer to Hong Kong local time.

(2) If there is a ‘‘black’’ rainstorm warning or a tropical cyclone warning signal number 8 or above in force in Hong Kong at any time between 9: 00 a.m. and 12: 00 noon on Friday, June 29, 2007, the application lists will not open or close on that day. Please refer to the section headed ‘‘How to Apply for the Hong Kong Offer Shares — Effect of bad weather on the opening of the application lists’’ in this prospectus.

If the application lists do not open and close on Friday, June 29, 2007, the dates mentioned in this section headed ‘‘Expected Timetable’’ may be affected. We will make a press announcement in such event.

(3) Applicants who apply for the Hong Kong Offer Shares by giving electronic application instructions to HKSCC should refer to the section headed ‘‘How to Apply for the Hong Kong Offer Shares — Applying by giving electronic application instructions to HKSCC’’ in this prospectus.

(4) The Price Determination Date, being the date on which the Offer Price is to be determined, is expected to be on or about Saturday, June 30, 2007 and, in any event, not later than Thursday, July 5, 2007. If, for any reason, the Offer Price is not agreed between the Global Coordinator (on behalf of the Underwriters) and us by Thursday, July 5, 2007, the Global Offering (including the Hong Kong Public Offer) will not proceed and will lapse.

—i— EXPECTED TIMETABLE(1)

(5) Share certificates for the Offer Shares will only become valid certificates of title at 8: 00 a.m. on Tuesday, July 10, 2007 provided that (i) the Global Offering has become unconditional in all respects and (ii) the Underwriting Agreements have not been terminated in accordance with their terms. If the Global Offering does not become unconditional or the Underwriting Agreements are terminated in accordance with their terms, we will make an announcement as soon as possible.

(6) Refund cheques will be issued in respect of wholly or partially unsuccessful applications pursuant to the Hong Kong Public Offer and also in respect of wholly or partially successful applications in the event that the final Offer Price is less than the price payable per Offer Share on application. Part of the applicant’s Hong Kong identity card number or passport number, or, if the application is made by joint applicants, part of the Hong Kong identity card number or passport number of the first-named applicant, provided by the applicant(s) may be printed on the refund cheque, if any. Such data would also be transferred to a third party for refund purpose. Banks may require verification of an applicant’s Hong Kong identity card number or passport number before cashing the refund cheque. Inaccurate completion of an applicant’s Hong Kong identity card number or passport number may lead to delay in encashment of or may invalidate the refund cheque.

(7) Applicants who have applied on WHITE Application Forms for 1,000,000 or more Hong Kong Offer Shares under the Hong Kong Public Offer and have indicated in their Application Forms that they wish to collect any refund cheques and share certificates in person, may do so from our Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong between 9: 00 a.m. to 1: 00 p.m. on Monday, July 9, 2007. Applicants being individuals who opt for personal collection must not authorize any other person to make collection on their behalf. Applicants being corporations who opt for personal collection must attend by their authorized representatives bearing letters of authorization from their corporation stamped with the corporation’s chop. Both individuals and representatives of corporations must produce, at the time of collection, identification and (where applicable) documents acceptable to Computershare Hong Kong Investor Services Limited at the time of collection. Applicants who have applied on YELLOW Application Forms for 1,000,000 or more Hong Kong Offer Shares under the Hong Kong Public Offer may collect their refund cheques, if any, in person but may not elect to collect their share certificates which will be deposited into CCASS for the credit of their designated CCASS participants’ stock accounts or CCASS investor participant stock accounts, as appropriate. The procedures for collection of refund cheques for YELLOW Application Form applicants are the same as those for WHITE Application Form applicants. Applicants who apply for Hong Kong Offer Shares by giving electronic application instructions to HKSCC should refer to the paragraph headed ‘‘Applying by giving electronic application instructions to HKSCC’’ under the section headed ‘‘How to Apply for the Hong Kong Offer Shares’’ in this prospectus for details. Uncollected share certificates (if applicable) and refund cheques (if applicable) will be dispatched by ordinary post at the applicants’ own risk to the addresses specified in the relevant Application Forms. Further information is set out in the section headed ‘‘How to Apply for the Hong Kong Offer Shares — Dispatch/Collection of share certificates and refund cheques’’ in this prospectus.

Particulars of the structure of the Global Offering, including the conditions thereto, are set out in the section headed ‘‘Structure and Conditions of the Global Offering’’ in this prospectus.

—ii— CONTENTS

IMPORTANT NOTICE TO INVESTORS

This prospectus is issued by ANTA Sports Products Limited solely in connection with the Hong Kong Public Offer and does not constitute an offer to sell or a solicitation of an offer to buy any security other than the Hong Kong Offer Shares offered by this prospectus pursuant to the Hong Kong Public Offer. This prospectus may not be used for the purpose of, and does not constitute, an offer or invitation in any other jurisdiction or in any other circumstances. No action has been taken to permit a public offering of the Offer Shares or the distribution of this prospectus in any jurisdiction other than Hong Kong.

Youshouldrelyonlyontheinformationcontained in this prospectus and the Application Forms to make your investment decision. We have not authorized anyone to provide you with information that is different from what is contained in this prospectus. Any information or representation not made in this prospectus must not be relied on by you as having been authorized by us, the Sponsor, the Global Coordinator, any of the Underwriters, any of their respective directors, or any other person involved in the Global Offering.

Page

Expected Timetable ...... i

Summary ...... 1

Definitions ...... 15

Risk Factors ...... 24

Waivers from Compliance with the Listing Rules ...... 40

Information about this Prospectus and the Global Offering ...... 42

Directors and Parties Involved in the Global Offering ...... 46

Corporate Information ...... 49

Industry Overview ...... 51

History and Corporate Structure ...... 58

Business ...... 67 Overview ...... 67 OurStrengths ...... 68 BusinessStrategies ...... 70 OurANTABusinessModel ...... 72 ANTABrandandProducts ...... 72 Production ...... 74

— iii — CONTENTS

Page

SalesandDistributionofANTAProducts...... 80 InventoryControl ...... 96 ResearchandDevelopment ...... 97 Quality Control ...... 99 RetailBusiness ...... 100 Competition ...... 102 Employees ...... 103 DirectorandStaffRemuneration ...... 103 Properties and Facilities ...... 104 IntellectualPropertyRights ...... 106 EnvironmentalandSafetyMatters ...... 107 Insurance ...... 109 LegalComplianceandProceedings ...... 109 GovernmentRegulations ...... 110

Relationship with Controlling Shareholders ...... 112

Connected Transactions ...... 117

Directors, Senior Management and Staff ...... 126

Substantial Shareholders ...... 132

Share Capital ...... 134

Financial Information ...... 137

Future Plans and Use of Proceeds ...... 175

Underwriting ...... 177

Structure and Conditions of the Global Offering ...... 184

Corporate Investor ...... 190

HowtoApplyfortheHongKongOfferShares ...... 191

—iv— CONTENTS

Page

Appendices

Appendix I: — Accountants’ Report ...... I-1

Appendix II: — Unaudited Pro Forma Financial Information ...... II-1

Appendix III: — Profit Forecast ...... III-1

Appendix IV: — Property Valuation ...... IV-1

Appendix V: — Summary of the Constitution of Our Company and Cayman Islands Companies Law ...... V-1

Appendix VI: — Statutory and General Information ...... VI-1

Appendix VII: — Documents Delivered to the Registrar of Companies and Available for Inspection ...... VII-1

—v— SUMMARY

This summary aims to give you an overview of the information contained in this prospectus. Since it is a summary, it does not contain all the information that may be important to you. You should read the prospectus in its entirety before you decide to invest in the Offer Shares.

There are risks associated with any investment. Some of the particular risks in investing in the Offer Shares are set out in the section headed ‘‘Risk Factors’’ of this prospectus. You should read that section carefully before you decide to invest in the Offer Shares.

OVERVIEW

We place great emphasis on brand building and promote ANTA products through advertisements in the press and television media, sponsorship of PRC sports competitions, national leagues such as the Chinese Basketball Association, and athletes, and various other promotional activities. In 2002, the Trademark Office of the State Administration for Industry and Commerce of the PRC ( ) named our ANTA trademark as applied to our sports footwear as one of ‘‘China’s Well-Known Trademarks’’ ( ).

Our ANTA products are manufactured through a combination of internal and external production, which we believe is cost-effective and offers us greater flexibility to adjust our production schedules and to meet unforeseen demand. During the Track Record Period, we produced the majority of our footwear products at our production facilities in Jinjiang, Fujian, while the remainder of our footwear products and all of our apparel and accessory products were outsourced to contract manufacturers. We commenced our own production of a proportion of our apparel products in 2007.

We believe that our ANTA products have high levels of performance and customer appeal. Each year we introduce four distinct seasonal product collections designed to meet consumer tastes and fashion trends. We conduct research and development and cooperate with external scientific and educational institutions to further enhance the technological content of our ANTA products. We have obtained patents for footwear technologies including, among others, our ‘‘Magnetic-Core’’ shock absorption technology. During the Track Record Period, we recorded no sales returns to us, which we believe is attributable to our commitment to product quality.

Pursuant to our wholesale business model, we do not sell our ANTA products directly to consumers but rely on our distributors to distribute our products to authorized ANTA retail outlets which sell our products to consumers in the PRC. Our Directors believe that our wholesale business model is a common business model in the sportswear industry in the PRC and has enabled us to achieve growth in sales by leveraging economies of scale from our distributorship arrangements.

As at December 31, 2004, 2005 and 2006 and March 31, 2007, we had 12, 28, 35 and 37 distributors, respectively. Almost half of the 35 distributors as at December 31, 2006 have had business relationships with us for more than two years. In addition, during the Track Record Period, we also sold some of our ANTA products directly to department stores and sole proprietors. However, since January 2007, all such sales have been made to our distributors.

—1— SUMMARY

We enter into distributorship agreements with each of our distributors to distribute exclusively our ANTA products for a term of one year which is renewable at our discretion. Such distributorship agreements are normally entered into at the end of the preceding year and contain substantially the same terms for the distributors except for the sales and expansion targets and payment and credit terms.

These distributorship agreements include the following principal terms:

. Geographic exclusivity — pursuant to our distributorship agreements, the distributors are authorized to sell exclusively our products under the ANTA brand name within a defined geographical area.

. Sales and expansion targets — since January 2007, our distributorship agreements specify sales and expansion targets for the number of new authorized ANTA retail outlets the distributors are required to open during the year. All of our distributors are required to meet such individual sales and expansion targets. We negotiate and agree the annual sales and expansion targets with our distributors. No minimum purchase amount is stipulated in such distributorship agreements.

. Payment and credit terms — the distributorship agreements include the payment and credit terms agreed with the distributors, determined on a case-by-case basis.

. Undertakings — the distributorship agreements contain undertakings by the distributors to comply with our sales policies, adhere to our pricing policies, and refrain from selling competing brands of sportswear, including footwear, apparel and accessories.

. Sales reports and estimates — pursuant to the terms of the distributorship agreements, our distributors are required to provide monthly sales reports and quarterly sales estimates to us.

We sell our ANTA products to our distributors at a wholesale price, which represents a discount to the suggested retail price of our ANTA products. Save for such discount and subsidies and training mentioned below, we do not offer any sales incentives to our distributors and no fees were payable by our distributors to us or by us to our distributors under the terms of the distributorship agreements.

Our distributors manage local networks of authorized ANTA retail outlets, which they either directly operate themselves or appoint third party retail outlet operators to manage, subject to our approval. We do not own or operate any of these authorized ANTA retail outlets and do not enter into any contractual relationship with the third party retail outlet operators appointed by our distributors. These authorized ANTA retail outlets operate under the ANTA brand name with a uniform store layout and sell exclusively our ANTA products. We provide retail policies and guidelines as well as training to our distributors to assist them in the management of their ANTA retail networks. Our distributors directly operated or indirectly managed an aggregate of 4,108 authorized ANTA retail outlets as at December 31, 2006 and had increased this number to 4,217 as at March 31, 2007.

—2— SUMMARY

The following chart illustrates the structure of the ANTA sales network for our ANTA products:

Our Group

Distributors

Management

Third Party Retail Outlet Operators Direct operation

Authorized ANTA retail outlets

The criteria we consider when approving the appointment of third party retail outlet operators by our distributors include whether the operator:

. has experience in retailing sportswear;

. has the ability to meet our sales targets;

. has adequate operating capital to operate an authorized ANTA retail outlet; and

. has a suitable store location and size.

Retail outlet operators are not required to meet any minimum number of years of experience in retail business.

Such third party retail outlet operators appointed by our distributors enter into annual contracts with our distributors. Our distributors are responsible for supervising and managing the third party retail outlet operators’ retailing activities according to our retail policies and guidelines. Since 2007, our distributors are required to sign substantially the same form of agreement provided by us with the third party retail outlet operators appointed by them. Any change to the principal terms of this agreement must be approved by us. The agreement entered into between our distributors and the third party retail outlet operators provides, among others, that such agreement would automatically terminate if that distributor’s distributorship agreement with us is terminated.

Our distributors and third party retail outlet operators appointed by them are subject to retail policies governing sales and expansion targets, product pricing, stock management, store layout, promotion, customer service and after-sale service standards which we provide to our distributors. Pursuant to such policies and the terms of the agreements that the third party retail outlet operators enter into with our distributors, they are prohibited from selling any products other than our ANTA products in the authorized ANTA retail outlets and are required to adhere to our guidelines in the use of ANTA brand materials, store layout and product display. We rely on our distributors to implement and enforce such retail policies and do not have any direct redress against third party retail outlet operators in the event of any breach of such policies or agreement. However, it is our policy that if any of our distributors consistently fails to cause the third party retail outlet operators engaged by it to comply with our policies and guidelines, or fails to take

—3— SUMMARY necessary steps to cause such operators to remedy any breach or terminate its contract with such operators, we may choose not to renew our distributorship agreement with that distributor. See ‘‘Risk Factors — We rely on third party distributors and the retail outlet operators appointed by them for the sales of our ANTA products and any failure by us to maintain good relationships with the distributors or failure by them to ensure that such third party retail outlet operators adhere to our retail policies may adversely affect our business.’’ Some of the authorized ANTA retail outlet operators may also own and operate other stores or retail outlets in addition to the authorized ANTA retail outlets operated by them.

We plan to selectively establish and operate ANTA flagship stores in prime commercial locations in major cities in the PRC for brand building purposes, with three to four flagship stores planned to open in 2007. These ANTA flagship stores will be significantly larger than existing authorized ANTA retail outlets and are intended to showcase our latest ANTA product ranges, enhance our brand profile in the local market and give us a platform to test marketing initiatives and gain direct access to consumer feedback.

To leverage our strong marketing resources and our experience in the sportswear market in China, we have entered into retail agreements with Adidas (Suzhou) and Adidas (China) to retail sporting goods under the adidas and Reebok brands, respectively, in China. We have also signed a re-distributorship agreement with Dongzhijie, an authorized sub-distributor of the Kappa brand in China, to sell sporting goods under the Kappa brand in Shanghai. As at April 30, 2007, we operated and managed 13 retail outlets selling adidas branded products, 15 retail outlets selling Reebok branded products and 12 retail outlets selling Kappa branded products.

Our turnover grew by approximately 301.3% from 2004 to 2006 which we believe is a result of our broad range of high quality products, the extensive ANTA sales network and our strong marketing and manufacturing capabilities.

OUR STRENGTHS

We believe that our competitive strengths have positioned us well to capitalize on the increasing spending power of consumers in the PRC. We believe that our competitive strengths include:

. Well-established and market-leading brand position

. Extensive network of third party distributors which manage nationwide retail outlets

. Vertically integrated business model with strong manufacturing capabilities

. High quality and functionality of ANTA products

. Strong and effective marketing and promotional capabilities

. Experienced management team

BUSINESS STRATEGIES

We aim to become the number one domestic sporting goods brand in China by leveraging our competitive strengths and by implementing the following strategies:

. Enhance brand image and recognition

. Continue to work with our distributors to expand and strengthen the ANTA sales network

—4— SUMMARY

. Improve product research, design and development capabilities

. Increase our scale of production and enhance production flexibility

. Develop our sportswear retail business

SUMMARY FINANCIAL INFORMATION

The table below summarizes the combined financial information of our Group for the three years ended December 31, 2006. The following summary combined income statement, balance sheet and cash flow information was derived from our Company’s audited combined financial information prepared in accordance with International Financial Reporting Standards under the basis as described in the Basis of Preparation included in the accountants’ report in Appendix I to this prospectus and you should read the entire audited financial statements, including the notes thereto, included in Appendix I for more details.

Year ended December 31, Summary combined income statement information 2004 2005 2006 RMB (million) RMB (million) RMB (million)

Turnover...... Footwear...... 265.9 446.0 797.7 Apparel...... 41.2 215.0 409.9 Accessories...... 4.4 9.3 42.5

311.5 670.3 1,250.1

Costofsales...... (267.7) (544.5) (936.9)

Gross profit...... 43.8 125.8 313.2 Otherrevenue...... 0.5 1.5 2.1 Othernetincome...... — — 0.5 Selling and distribution expenses...... (40.7) (61.2) (132.3) Administrativeexpenses...... (8.6) (15.0) (35.2)

(Loss)/profit from operations ...... (5.0) 51.1 148.3 Financecosts...... (1.5) (0.9) (0.3)

(Loss)/profit before taxation ...... (6.5) 50.2 148.0 Incometax...... (1.9) (2.2) (0.6)

Net (loss)/profit for the year...... (8.4) 48.0 147.4

Dividenddeclaredduringtheyear...... — — 22.9

(Loss)/earnings per Share Basic(RMB)...... (0.005) 0.027 0.082

—5— SUMMARY

As of December 31, Summary combined balance sheet information 2004 2005 2006 RMB RMB RMB (million) (million) (million)

Assets Non-currentassets...... 129.5 194.3 265.2 Currentassets...... 167.7 251.8 591.2

Totalassets...... 297.2 446.1 856.4

Equity and liabilities Totalequity...... 160.5 111.1 237.9 Non-current liabilities ...... — — — Current liabilities ...... 136.7 335.0 618.5

Total equity and liabilities ...... 297.2 446.1 856.4

Year ended December 31, Summary combined cash flow information 2004 2005 2006 RMB RMB RMB (million) (million) (million)

Net cash (used in)/generated from operating activities . . . (19.6) 40.6 155.2 Net cash used in investing activities ...... (38.4) (72.2) (83.4) Net cash generated from financing activities ...... 65.5 63.0 34.6

PROFIT FORECAST FOR THE FINANCIAL YEAR ENDING DECEMBER 31, 2007

Forecast combined profit attributable to the equity holders of our Group(1) & (2) ...... notlessthanRMB384.4million (HK$392.2 million)

Forecast earnings per Share

. pro forma fully diluted(3) ...... notlessthanRMB0.16(HK$0.16)

. weighted average(4) ...... notlessthanRMB0.18(HK$0.18)

Notes:

(1) The bases and assumptions on which the above profit forecast for the year ending December 31, 2007 has been prepared are summarized in Appendix III to this prospectus.

(2) The forecast of the combined profit attributable to equity holders of our Company for the year ending December 31, 2007 prepared by our Directors is based on the unaudited combined income statements of our Group for the three months ended March 31, 2007 and the forecast of the combined results of our Group for the nine months ending December 31, 2007. Our Directors are not aware of any extraordinary items which have arisen or are likely to arise during the year ending December 31, 2007. The forecast has been prepared on the basis of the accounting policies being consistent in all material respects with those currently adopted by our Group as set out in note 1 ‘‘Significant accounting policies’’ under section C in the accountants’ report attached as Appendix I to this prospectus.

(3) The calculation of the forecast earnings per Share on a pro forma fully diluted basis is based on the forecast combined profit attributable to equity holders of our Company for the year ending December 31, 2007, assuming that our Company had been listed since January 1, 2007 and a total of 2,400,000,000 Shares have been in issue during the entire year. The calculation of the pro forma fully diluted forecast earnings per Share does not take into account any Shares which may be issued upon the exercise of the Over-allotment Option. If the Over-allotment Option is exercised in full, the number of Shares in issue would be

—6— SUMMARY

2,490,000,000 Shares, and the forecast earnings per Share on the pro forma fully diluted basis mentioned above would be RMB0.16 (approximately HK$0.16). Please refer to ‘‘Unaudited Pro Forma Fully Diluted Forecast Earnings Per Share’’ in Appendix II to this prospectus.

(4) The calculation of forecast earnings per Share on a weighted average basis is based on the forecast combined profit attributable to equity holders of our Company for the year ending December 31, 2007 and a weighted average number of 2,087,671,233 Shares expected to be in issue during the year. This calculation assumes that the Over-allotment Option will not be exercised and the Shares issued pursuant to the Global Offering will be issued on July 10, 2007.

GLOBAL OFFERING STATISTICS(1)

Based on an Based on an Offer Price of HK$4.28 Offer Price of HK$5.28

Market capitalization of the Shares(2) ...... HK$10,272.0million HK$12,672.0 million Prospective price/earnings multiple (a) Pro forma fully diluted(3) ...... 26.8times 33.0times (b) Weighted average(4) ...... 23.8times 29.3times Unaudited pro forma adjusted net tangible assets value per Share(5)...... HK$1.11(RMB1.09) HK$1.35(RMB1.32)

Notes:

(1) All statistics in this table assume the Over-allotment Option is not exercised.

(2) The calculation of market capitalization is based on 2,400,000,000 Shares expected to be in issue immediately upon completion of the Global Offering and the Capitalization Issue.

(3) The calculation of the prospective price/earnings multiple on a pro forma fully diluted basis is based on the forecast earnings per Share for the year ending December 31, 2007 on a pro forma fully diluted basis at the respective Offer Prices of HK$4.28 and HK$5.28.

(4) The calculation of the prospective price/earnings multiple on a weighted average basis is based on the forecast earnings per Share for the year ending December 31, 2007 on a weighted average basis assuming the Global Offering occurs on July 10, 2007, at the respective Offer Prices of HK$4.28 and HK$5.28.

(5) Pursuant to the Corporate Reorganisation, certain business and assets will be retained by ANTA Fujian, a predecessor entity of our Group, and had been treated as a deemed distribution by our Group upon our Company becoming the holding company of our Group on June 16, 2007. Our unaudited pro forma net tangible assets have been reduced by RMB35.5 million accordingly after taking into account this deemed distribution, which is based on the financial information of ANTA Fujian prepared in accordance with International Financial Reporting Standards as at December 31, 2006. The unaudited pro forma adjusted net tangible assets value per Share has been arrived at after the adjustments referred to in the paragraph headed ‘‘Unaudited pro forma adjusted net tangible assets’’ under the section headed ‘‘Unaudited Pro Forma Financial Information’’ in Appendix II to this prospectus and on the basis of 2,400,000,000 Shares in issue at the respective Offer Prices of HK$4.28 and HK$5.28 per Share immediately following completion of the Global Offering and the Capitalization Issue.

DIVIDEND POLICY

We intend to declare and pay dividends in the future. The payment and the amount of any dividends will depend on the results of operations, cash flows, financial condition, statutory and regulatory restrictions on the payment of dividends by us, future prospects and other factors that we may consider relevant. Holders of the Shares will be entitled to receive such dividends pro rata according to the amounts paid up or credited as paid up on the Shares. The declaration, payment, and amount of dividends will be subject to our Board’s discretion.

—7— SUMMARY

Dividends may be paid only out of our distributable profits as permitted under relevant laws. To the extent profits are distributed as dividends, such portion of profits will not be available to be reinvested in our operations. There can be no assurance that we will be able to declare or distribute any dividend in the amount set out in any of our plans or at all. Our dividend distribution record in the past may not be used as a reference or basis to determine the level of dividends that may be declared or paid by us in the future.

Subject to the factors described above, we currently intend to recommend at the next annual shareholders meeting of our Company an annual dividend of approximately 25% of our net profit available for distribution to our shareholders after the Global Offering.

For the year ended December 31, 2006, we declared dividends of approximately RMB22.9 million, of which approximately RMB1.6 million was distributed in 2006 and approximately RMB21.3 million was distributed in 2007, representing the respective total dividend payments made by ANTA Jinjiang and ANTA Fujian to their respective equity holders. You should note that historical dividend distributions are not indicative of our future dividend policy.

PRE-IPO SHARE OPTION SCHEME

We have adopted the Pre-IPO Share Option Scheme to motivate our employees to optimize their performance, efficiency and future contributions to our Group and to reward them for their past contributions to our Group.

The total number of Shares which may be issued upon the exercise of options granted under the Pre- IPO Share Option Scheme is 16,000,000 Shares, representing (i) approximately 0.667% of the issued share capital of our Company immediately after the completion of the Global Offering and the Capitalization Issue (without taking into account any Shares which may be allotted and issued upon the exercise of any options which have been granted under the Pre-IPO Share Option Scheme or which may be granted under the Share Option Scheme or the exercise of the Over-allotment Option); and (ii) approximately 0.662% of theissuedsharecapitalofourCompanyimmediatelyafter the completion of the Global Offering and the Capitalization Issue and assuming that all options granted under the Pre-IPO Share Option Scheme are exercised at the same time (without taking into account any Shares which may be allotted and issued upon the exercise of any options which may be granted under the Share Option Scheme or the exercise of the Over-allotment Option). Assuming that all the options granted under the Pre-IPO Share Option Scheme had been exercised in full during the year ending December 31, 2007 and that 2,416,000,000 Shares, comprising 2,400,000,000 Shares to be in issue immediately after the Global Offering and the Capitalization Issue and 16,000,000 Shares to be issued upon the exercise of all the options granted under the Pre-IPO Share Option Scheme, were deemed to have been in issue throughout the year ending December 31, 2007, but not taking into account any Shares which may be allotted and issued upon the exercise of the Over-allotment Option or any option which may be granted under the Share Option Scheme, this will have a dilutive effect of approximately 0.133% on forecast earnings per Share from approximately HK$0.16342 to approximately HK$0.16321. As at the Latest Practicable Date, none of the options granted under the Pre-IPO Share Option Scheme had been exercised by the grantees.

—8— SUMMARY

A breakdown of options granted under the Pre-IPO Share Option Scheme by category of grantees is set out below:

Number of Shares to be issued upon full exercise of all options granted under the Pre-IPO Share Option Category of grantees Number of grantees Scheme

Executive Director 1 5,250,000 Senior management members of our Group 11 4,250,000 Other employees of our Group 26 6,500,000

38 16,000,000

Save as disclosed above, no options have been granted or will be granted under the Pre-IPO Share Option Scheme.

Pursuant to the Pre-IPO Share Option Scheme and the relevant offer letters in respect of the grant of options:

(i) the exercise price of each of such options is 80% of the final Offer Price; and

(ii) the options granted under the Pre-IPO Share Option Scheme may be exercised by the grantees at any time during the option period which is (a) in relation to 30% of the total number of options granted, any time after the first anniversary of theListingDate;(b)inrelationtoanother30%of the total number of options granted, any time after the second anniversary of the Listing Date; and (c) in relation to the remaining 40% of the total number of options granted, any time after the third anniversary of the Listing Date. No option holder shall in any way sell, transfer, assign, charge, mortgage, encumber or create any interest in favour of any third party over or in relation to any options or purport to do so.

Our Directors have undertaken to our Company that they will not exercise options granted under the Pre-IPO Share Option Scheme to such extent that the Shares held by the public (as defined in the Listing Rules) after the Global Offering and the Capitalization Issue will fall below the required percentage set out in Rule 8.08 of the Listing Rules or such other percentage as approved by the Stock Exchange from time to time.

Please refer to ‘‘Statutory and General Information’’ in Appendix VI for further details of the Pre-IPO Share Option Scheme.

SHARE OPTION SCHEME

Our Company has conditionally adopted the Share Option Scheme, the purpose of which is to motivate the relevant participants to optimize their future contributions to our Group and/or to reward them for their past contributions, to attract and retain or otherwise maintain on-going relationships with such participants who are significant to and/or whose contributions are or will be beneficial to the performance, growth or success of our Group, and additionally in the case of the executive Directors and senior management of our

—9— SUMMARY

Group, to enable our Group to attract and retain individuals with experience and ability and/or to reward them for their past contributions. The principal terms of this scheme are summarized in the paragraph headed ‘‘Share Option Scheme’’ in Appendix VI to this prospectus.

USE OF PROCEEDS

The net proceeds from the Global Offering, after deducting underwriting fees and estimated expenses payable by our Company in connection thereto, are estimated to be approximately HK$2,746.3 million, assuming that the Over-allotment Option is not exercised and assuming an Offer Price of HK$4.78 per Share, being the mid-point of the proposed Offer Price range of HK$4.28 to HK$5.28 per Share. We intend to use such net proceeds as follows:

. Approximately HK$1,100 million for organizing trade fairs, brand promotion, sponsorship of major sports leagues and events, media advertising (such as television commercials, outdoor displays and magazine advertising), marketing campaigns and activities and endorsements of up- and-coming athletes;

. Approximately HK$550 million for renovation costs, display equipment and rental deposits for opening retail outlets under the authorized international sportswear brands, opening retail sports complexes and setting up ANTA flagship stores in major cities in China;

. Approximately HK$440 million for further developing regional sales offices, expanding and improving the coverage of the ANTA sales network and providing renovation subsidies in the form of standardized promotional materials and display equipment to authorized ANTA retail outlets;

. Approximately HK$250 million for acquiring land use rights, plant and machinery, furniture and fixtures and staff quarters as part of the expansion of our production facilities for footwear products (through the addition of 12 more production lines) and shoe soles and the addition of production bases for apparel products, and upgrading production machinery;

. Approximately HK$70 million for establishing a new information management system to link up the production, sales and finance systems and to gather operating information and inventory data from the retail outlets of both ANTA branded products and non-ANTA branded products;

. Approximately HK$70 million for investing in advanced testing and scientific equipment, recruiting experts and designers and engaging consultancy firms and universities for enhancing our sports science and raw material research, product testing, innovation and development and design capabilities and for applying for intellectual property rights and licences for new technological know-how that we developed to protect our intellectual property rights. For details, please refer to the paragraph headed ‘‘Intellectual property rights — Protection of Intellectual Property’’ in the ‘‘Business’’ section of this prospectus;

. Approximately HK$266 million for working capital and other general corporate purposes.

If the Offer Price is set at the high-end or low-end of the proposed Offer Price range, the net proceeds from the Global Offering (assuming that the Over-allotment Option is not exercised) will increase or decrease by approximately HK$291.0 million, respectively. In such event, we will increase or decrease the allocation of the net proceeds to the above purposes on a pro-rata basis.

—10— SUMMARY

If the Over-allotment Option is exercised in full, the net proceeds from the Global Offering will increase to approximately HK$3,163.6 million, assuming an Offer Price of HK$4.78 per Share, being the mid-point of the proposed Offer Price range. If the Offer Price is set at the high-end or low-end of the proposed Offer Price range, the net proceeds from the Global Offering (including the proceeds from the exercise of the Over-allotment Option) will increase or decrease by approximately HK$334.7 million, respectively. We intend to apply the additional net proceeds to the above uses in the proportions stated above.

None of the net proceeds from the Global Offering will be used to acquire any of our distributors or any part of the ANTA sales network.

THE GLOBAL OFFERING

The Global Offering consists of:

. the offer of initially 60,000,000 Hong Kong Offer Shares for subscription by the public in Hong Kong pursuant to the Hong Kong Public Offer; and

. the offer of initially 540,000,000 International Placing Shares (a) in the United States to qualified institutional buyers (as such term is defined in Rule 144A under the U.S. Securities Act) in reliance on Rule 144A under the U.S. Securities Act or another exemption from the registration requirement under the U.S. Securities Act, and (b) outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act, including to professional investors in Hong Kong, collectivelyreferredtointhisprospectusasthe International Placing.

RISK FACTORS

Our Group’s operations are subject to a number of risks, a detailed discussion of which is set out in the section headed ‘‘Risk Factors’’ in this prospectus. These risks can be broadly classified into:

. Risks relating to our Group’s operations;

. Risks relating to our industry;

. Risks relating to conducting business in the PRC; and

. Risks relating to the Global Offering.

Set out below is a list of the risks referred to above.

Risks relating to our Group’s operations

. Failure to effectively promote our ANTA brand may adversely affect our performance and sales of ANTA branded products

. We rely on third party distributors and the retail outlet operators appointed by them for the sales of our ANTA products and any failure by us to maintain good relationships with the distributors or failure by them to ensure that such third party retail outlet operators adhere to our retail policies may adversely affect our business

—11— SUMMARY

. We rely on a small number of customers for a significant portion of our sales. Our financial condition and results of operations may be adversely affected if we fail to maintain our relationship with any or all of these customers

. Our future success depends on our ability to anticipate and respond in a timely manner to ever- evolving consumer tastes and preferences for sportswear products

. The results of operations of our apparel business during the Track Record Period may not be indicative of our future performance

. Our ability to increase our operating results in the future depends on the successful expansion of our production capacity

. During the Track Record Period, we relied on our contract manufacturers for the production of a portion of our footwear and all of our apparel and accessory products, and since we commenced our apparelproductionin2007,wecontinuedtorelyonour contract manufacturers for the production of a portion of our footwear and apparel products and all of our accessory products. Any disruption to the supply of products from our contract manufacturers would adversely affect our operating results

. We rely on a small number of suppliers for a large portion of our raw material and product supply and any interruption of supply from these suppliers would affect our results of operations

. Our operating results may be adversely affected by increases in the market prices of raw materials if we are unable to pass on the increased cost of raw materials to our customers through higher prices for our products

. We may not be able to adequately protect our intellectual property rights, which could harm our ANTA brand and our business

. Our business could be adversely affected by intellectual property rights disputes or proceedings with third parties for possible infringement of their intellectual property rights

. We may not succeed in expanding into the PRC sportswear retail business

. We may not be successful in implementing our future expansion plans and may not secure additional funding for the implementation of such plans

. We incurred losses in 2004 and may incur additional losses in the future

. Loss of any of our key executive personnel or any failure to attract such personnel in the future will adversely impact our business and growth prospects

. Increases in labor costs in China may adversely affect our business and our profitability

. Disruption in the supply of electricity to our production facilities may adversely impact our production

. Ourcurrentinsurancecoveragemaynotbesufficient to cover the risks related to our operations

. Any change in our tax treatment, including preferential corporate tax rates, in China may have a negative impact on our operating results

. The operating results of our business may fluctuate due to seasonality

—12— SUMMARY

. Historical dividends should not be used as an indicator for our future dividend policy

. We recorded net current liabilities during the Track Record Period and we cannot assure you that we will not experience net current liabilities again in the future

. We relied on the provision of advances to us by our Controlling Shareholders during the Track Record Period for our expansion and the cessation of such advances upon the Listing may affect our cash flows

. Our ANTA brand may be damaged if our contract manufacturers or suppliers violate any relevant laws, rules or regulations, particularly in respect of labor and environmental protection

. Any change in the laws and regulations in relation to the retail industry in the PRC may intensify competition in the PRC retail industry, which may adversely affect our expansion into the sportswear retail business and our operating results

. We may be required to obtain additional approvals from the PRC authorities for the operation of our retail business and failure to obtain such approvals will adversely affect our business

. The costs of share options granted under the Pre-IPO Share Option Scheme and the Share Option Scheme will adversely affect our results of operations and any exercise of the options granted may result in a dilution of Shareholders’ shareholdings

Risksrelatingtoourindustry

. Our future performance is dependent on the PRC economy and, in particular, the level of growth of the PRC consumer market

. Competition in the PRC sportswear industry may adversely affect our brand loyalty and results of operations

Risks relating to conducting business in the PRC

. Changes in the economic, political and social conditions in the PRC and policies adopted by the PRC Government may adversely affect our business, operating results and financial condition

. The PRC legal system is not fully developed and has inherent uncertainties which could limit the legal protections available to us and adversely affect our operations

. Changes in foreign exchange regulations and future movements in the exchange rate of the Renminbi may affect the value of any future dividend payments

. We are a holding company that heavily relies on dividend payments from our subsidiaries for funding

. It may be difficult to effect service of process upon our Directors who live in China or to enforce against them in China judgments obtained from non-PRC courts

. An outbreak of the Avian Influenza or SARS or any other similar epidemic may, directly or indirectly, adversely affect our operating results and the price of the Shares

—13— SUMMARY

Risks relating to the Global Offering

. There has been no prior public market for our Shares and an active trading market for our Shares may not develop

. The trading price of our Shares may be volatile

. Future sales of Shares or a major divestment of Shares by any major shareholder could adversely affect the Share price

. Investors may face difficulties in protecting their interests because our Company is incorporated under Cayman Islands law, which may provide less protection to minority shareholders than the laws of Hong Kong and other jurisdictions

. The Controlling Shareholders may take actions that are not in, or may conflict with, public Shareholders’ best interests

. Certain facts, forecasts and other statistics with respect to China, the PRC economy and the sportswear industry in this prospectus are derived from various official sources and may not be reliable

. Forward-looking information contained in this prospectus may prove inaccurate

. You should read the entire prospectus carefully and we strongly caution you not to place any reliance on any information contained in press articles or other media, including, in particular, any projections, valuations or other forward-looking information.

—14— DEFINITIONS

In this prospectus, unless the context otherwise requires, the following expressions have the following meanings:

‘‘Adidas (China) ’’ (adidas (China) Co., Ltd.), a wholly foreign- owned enterprise incorporated under the laws of the PRC, a wholly-owned subsidiary of the Adidas Group and an Independent Third Party

‘‘Adidas Group’’ means adidas-Salomon AG, a company listed on the stock exchange in Frankfurt, and its subsidiaries, associates and entities or companies controlled by it or its subsidiaries or its associates

‘‘Adidas (Suzhou)’’ (adidas (Suzhou) Co., Ltd.), a wholly foreign- owned enterprise incorporated under the laws of the PRC, a wholly-owned subsidiary of the Adidas Group and an Independent Third Party

‘‘Anda Holdings’’ Anda Holdings International Limited ( ), a company incorporated in the BVI with limited liability on August 22, 2006, the entire issued share capital of which is indirectly owned by HSBC International Trustee Limited as trustee of the DYL Family Trust, a discretionary trust set up by Ms. Ding Yali for the benefit of her issue. Ms. Ding Yali is the sister of our executive Directors, Mr. Ding Shizhong and Mr. Ding Shijia, and the spouse of our executive Director, Mr. Lai Shixian

‘‘Anda Hong Kong’’ Anda International Investment Limited ( ), a company incorporated in Hong Kong on September 1, 2004 and an indirect wholly- owned subsidiary of our Company

‘‘Anda Investments’’ Anda Investments Capital Limited ( ), a company incorporated in the BVI with limited liability on August 22, 2006, the entire issued share capital of which is indirectly owned by HSBC International Trustee Limited as trustee of the DHM Family Trust, a discretionary trust set up by Mr. Ding Hemu for the benefit of his family members. Mr. Ding Hemu is the father of our executive Directors, Mr. Ding Shizhong and Mr. Ding Shijia and the father-in-law of our executive Director, Mr. Lai Shixian

‘‘ANTA Changting’’ (ANTA (Changting) Sports Products Co., Ltd.), a wholly foreign-owned enterprise incorporated under the laws of the PRC on February 20, 2006 and an indirect wholly-owned subsidiary of our Company

‘‘AN TA China’’ (ANTA (China) Co., Ltd.), a wholly foreign-owned enterprise incorporated under the laws of the PRC on August 16, 2000 and an indirect wholly-owned subsidiary of our Company

‘‘Anta Enterprise’’ Anta Enterprise Group Limited ( ), a company incorporated in the BVI with limited liability on August 22, 2006 and a wholly-owned subsidiary of our Company

—15— DEFINITIONS

‘‘ANTA Fujian’’ (ANTA (Fujian) Shoes Industry Co., Ltd.), a sino- foreign equity joint venture incorporated under the laws of the PRC on July 30, 1994, the equity interests of which are held as to 40% by Mr. Ding Siren and 60% by Jinjiang Shifa

‘‘Anta International’’ Anta International Group Holdings Limited ( ), a Company incorporated in the BVI with limited liability on August 22, 2006, the entire issued share capital of which is indirectly owned by HSBC International Trustee Limited (i) as to 41.44% as trustee of the DSZ Family Trust, a discretionary trust set up by Mr. Ding Shizhong for the benefit of his family members, (ii) as to 40.84% as trustee of the DSJ Family Trust, a discretionary trust set up by Mr. Ding Shijia for the benefit of his family members, (iii) as to 11.41% as trustee of the WWM Family Trust, a discretionary trust set up by Mr. Wang Wenmo for the benefit of his family members, (iv) as to 6.01% as trustee of the WYH Family Trust, a discretionary trust set up by Mr. Wu Yonghua for the benefit of his family members, and (v) as to 0.30% as trustee of the KYF Family Trust, a discretionary trust set up by Mr. Ke Yufa for the benefit of his family members. Mr. Ding Shizhong, Mr. Ding Shijia, Mr. Wang Wenmo and Mr. Wu Yonghua are our executive Directors and Mr. Ke Yufa is a member of our senior management

‘‘AN TA Jinjiang’’ (Jinjiang ANTA Sports Products Trading Co., Ltd.*), a limited liability company incorporated under the laws of the PRC on August 6, 2002, the equity interests of which were held as to 30% by Ms. Ding Youmian (the spouse of Mr. Ding Shizhong, one of our executive Directors), as to 30% by Mr. Wang Wenmo (one of our executive Directors) and as to 40% by Ms. Ding Yali (the sister of our executive Directors, Mr. Ding Shizhong and Mr. Ding Shijia and the spouse of our executive Director, Mr. Lai Shixian). ANTA Jinjiang was dissolved in November 2006

‘‘ANTA Quanzhou’’ (ANTA (Quanzhou) Sports Products Limited), a wholly foreign-owned enterprise incorporated under the laws of the PRC on January 16, 2007 and an indirect wholly-owned subsidiary of our Company

‘‘ANTA sales network’’ the sales network for our ANTA products comprising our distributors and the authorized ANTA retail outlets operated by our distributors or third party retail outlet operators appointed by our distributors

‘‘ANTA Xiamen’’ (ANTA (Xiamen) Sports Goods Co., Ltd.), a wholly foreign-owned enterprise incorporated under the laws of the PRC on August 14, 2006 and an indirect wholly-owned subsidiary of our Company

‘‘Application Form(s)’’ WHITE application form(s) and YELLOW application form(s), or where the context so requires, any of them, relating to the Hong Kong Public Offer

‘‘Articles of Association’’ or the articles of association of our Company, adopted on June 11, 2007 and as ‘‘Articles’’ amended from time to time, a summary of which is set out in Appendix V to this prospectus

—16— DEFINITIONS

‘‘associate(s)’’ has the meaning ascribed thereto under the Listing Rules

‘‘authorized ANTA retail a retail outlet operated by one of our distributors or a third party retail outlet outlet’’ operator appointed by our distributor and approved by us which operates under the ANTA brand name with a uniform brand image and store layout and sells exclusively our ANTA products

‘‘Beijing Fengxian’’ (Beijing Fengxian Oriental Sporting Goods Co., Ltd.*), a limited liability company incorporated under the laws of the PRC on January 25, 2007 and an indirect wholly-owned subsidiary of our Company

‘‘Board’’or‘‘Boardof the board of Directors Directors’’

‘‘Business Day’’ a day on which banks in Hong Kong are generally open for business to the public and which is not a Saturday, Sunday or public holiday in Hong Kong

‘‘BVI’’ The British Virgin Islands

‘‘CAGR’’ acronym for compound annual growth rate

‘‘Capitalization Issue’’ the issue of 1,798,430,000 Shares upon capitalization of certain sums standing to the credit of the share premium account of our Company referred to in the paragraph headed ‘‘Written resolutions of our Shareholders passed on June 11, 2007’’ under the section headed ‘‘Further Information about our Group’’ in Appendix VI to this prospectus

‘‘CCASS’’ the Central Clearing and Settlement System established and operated by HKSCC

‘‘CCASS Broker a person admitted to participate in CCASS as a broker participant Participant’’

‘‘CCASS Custodian a person admitted to participate in CCASS as a custodian participant Participant’’

‘‘CCASS Investor a person admitted to participate in CCASS as an investor participant who Participant’’ may be an individual or joint individuals or a corporation

‘‘CCASS Participant’’ a CCASS Broker Participant, a CCASS Custodian Participant or a CCASS Investor Participant

‘‘Changting Sports’’ (Changting Anta Sports Products Co., Ltd.*), a limited liability company incorporated under the laws of the PRC on May 20, 2004, owned as to 50% by Mr. Ding Shijia and 50% by Mr. Wang Wenmo, both of whom are our executive Directors

‘‘China’’ or ‘‘PRC’’ the People’s Republic of China excluding, for the purpose of this prospectus, Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

—17— DEFINITIONS

‘‘Companies Law’’ the Companies Law, Cap 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands

‘‘Companies Ordinance’’ the Companies Ordinance (Chapter 32 of the Laws of Hong Kong)

‘‘Connected Person’’ has the meaning ascribed thereto under the Listing Rules

‘‘Controlling Shareholders’’ has the meaning ascribed thereto in the Listing Rules and unless the context requires otherwise, refers to Mr. Ding Shizhong, Mr. Ding Shijia (brother of Mr. Ding Shizhong), Mr. Ding Hemu (father of Mr. Ding Shizhong), Ms. Ding Yali (sister of Mr. Ding Shizhong), Mr. Wang Wenmo (cousin of Mr. Ding Shizhong), Mr. Wu Yonghua and Mr. Ke Yufa who, together, will control the exercise of 75% voting rights in the general meeting of our Company immediately after the Global Offering and the Capitalization Issue (assuming that the Over-allotment Option is not exercised). Mr. Ding Shizhong, Mr. Ding Shijia, Mr. Wang Wenmo and Mr. Wu Yonghua are our executive Directors and Mr. Ke Yufa is a member of our senior management

‘‘Corpora te the corporate reorganization of our Group conducted in preparation for the Reorganization’’ Listing, details of which are set out in the paragraph headed ‘‘Corporate Reorganization of our Group’’ under the section headed ‘‘History and Corporate Structure’’ in this prospectus

‘‘Covenantors’’ Anta International, Mr. Ding Shizhong and Mr. Ding Shijia

‘‘Director(s)’’ the director(s) of our Company

‘‘Dongzhijie’’ (Shanghai Dongzhijie Sporting Goods Development Co. Ltd.*), a limited liability company incorporated under the laws of the PRC on September 26, 2006 and an Independent Third Party

‘‘Global Offering’’ the Hong Kong Public Offer and the International Placing

‘‘Group’’, ‘‘we’’ and ‘‘us’’ our Company and its subsidiaries or, where the context so requires in respect of the period before our Company became the holding company of our present subsidiaries, the present subsidiaries of our Company and the businesses carried on by such subsidiaries or (as the case may be) their predecessors

‘‘Guangzhou Fengxian’’ (Guangzhou Fengxian Sporting Goods Co., Ltd.*), a limited liability company incorporated under the laws of the PRC on February 7, 2007 and an indirect wholly-owned subsidiary of our Company

‘‘Harbin Fengxian’’ (Harbin Fengxian Sporting Goods Development Co., Ltd.*), a limited liability company incorporated under the laws of the PRC on January 8, 2007 and an indirect wholly-owned subsidiary of our Company

‘‘HK$’’ and ‘‘cents’’ Hong Kong dollars and cents respectively, the lawful currency of Hong Kong

—18— DEFINITIONS

‘‘HKSCC’’ Hong Kong Securities Clearing Company Limited

‘‘HKSCC Nominees’’ HKSCC Nominees Limited, a wholly-owned subsidiary of HKSCC

‘‘Hong Kong’’, ‘‘HKSAR’’ the Hong Kong Special Administrative Region of the PRC or ‘‘HK’’

‘‘Hong Kong Public Offer’’ the offer of the Hong Kong Offer Shares for subscription by the public in Hong Kong for cash at the Offer Price, on and subject to the terms and conditions described in this prospectus and in the Application Forms relating thereto

‘‘Hong Kong Offer Shares’’ the 60,000,000 Shares being initially offered by our Company for subscription under the Hong Kong Public Offer at the Offer Price (subject to adjustment as described in the section headed ‘‘Structure and Conditions of the Global Offering’’ in this prospectus)

‘‘Hong Kong Underwriters’’ the several underwriters of the Hong Kong Public Offer listed in the paragraph headed ‘‘Hong Kong Underwriters’’ under the section headed ‘‘Underwriting’’ in this prospectus

‘‘Hong Kong Underwriting the underwriting agreement relating to the Hong Kong Public Offer dated Agreement’’ June 25, 2007 between, among others, our Company, the Global Coordinator and the Hong Kong Underwriters

‘‘Independent Third Party’’ an individual or a company who or which is not connected with (within the meaning of the Listing Rules) any Director, chief executive or substantial shareholder (within the meaning of the Listing Rules) of our Company, its subsidiaries or any of their respective associates

‘‘International Placing’’ the conditional placing of the International Placing Shares (a) in the United States to qualified institutional buyers (as such term is defined in Rule 144A under the U.S. Securities Act) in reliance on Rule 144A under the U.S. Securities Act or another exemption from the registration requirement under the U.S. Securities Act, and (b) outside the United States in offshore transactions in reliance on Regulation S under the U.S. Securities Act, including to professional investors in Hong Kong, as further described in the section headed ‘‘Structure and Conditions of the Global Offering’’ in this prospectus

‘‘International Placing the 540,000,000 Shares being initially offered for subscription under the Shares’’ International Placing together, where relevant, with any additional Shares thatmaybeissuedpursuanttoanyexercise of the Over-allotment Option, subject to adjustment as described in the section headed ‘‘Structure and Conditions of the Global Offering’’ in this prospectus

‘‘International the several underwriters of the International Placing Underwriters’’

—19— DEFINITIONS

‘‘International Underwriting the underwriting agreement relating to the International Placing expected to Agreement’’ be entered into between, among others, our Company, the Global Coordinator and the International Underwriters on or around June 30, 2007

‘‘Jinjiang Shifa’’ (Jinjiang Shifa Light Industry Co., Ltd.*), formerly known as (Jinjiang Chendai Andou Qiuzhi Leather Shoe Factory*), a limited liability company incorporated under the laws of the PRC on April 6, 1988, which changed its name to the current name on September 28, 2004 and the equity interests of which are held as to 60% by Mr. Ding Hemu (father of Mr. Ding Shizhong), 10% by Mr. Ding Shizhong, 10% by Mr. Ding Shijia (brother of Mr. Ding Shizhong), 10% by Ms. Ding Youmian (spouse of Mr. Ding Shizhong) and 10% by Ms. Ding Liming (spouse of Mr. Ding Shijia)

‘‘Keen Power’’ Keen Power International Limited ( ), a company incorporated in Hong Kong with limited liability on August 17, 2006 and an indirect wholly-owned subsidiary of our Company

‘‘Latest Practicable Date’’ June 20, 2007, being the latest practicable date prior to the printing of this prospectus for the purpose of ascertaining certain information contained in this prospectus

‘‘Listing’’ the listing of the Shares on the Main Board of the Stock Exchange

‘‘Listing Date’’ the date, expected to be on or about July 10, 2007, on which dealings in the Shares first commence on the Stock Exchange

‘‘Listing Rules’’ The Rules Governing the Listing of Securities on the Stock Exchange (as amended from time to time)

‘‘Memorandum of the memorandum of association of our Company Association’’ or ‘‘Memorandum’’

‘‘Morgan Stanley’’ or Morgan Stanley Asia Limited ‘‘Bookrunne r’’ or ‘‘ Global Coordinator’’ or ‘‘Lead Manager’’ or ‘‘Sponsor’’

‘‘Motive Force’’ Motive Force Sports Products Limited ( ), a company incorporated in the BVI with limited liability on August 22, 2006 and a wholly-owned subsidiary of our Company

‘‘OEM’’ acronym for original equipment manufacturer, a business that manufactures goods or equipment for branding and resale by others

‘‘Offer Price’’ the final Hong Kong dollar price per Offer Share (excluding brokerage fee, SFC transaction levy and Stock Exchange trading fee) which will be not more than HK$5.28 and is expected to be not less than HK$4.28, such price to be determined in the manner as further described in the section headed ‘‘Structure and Conditions of the Global Offering’’

—20— DEFINITIONS

‘‘Offer Shares’’ the Hong Kong Offer Shares and the International Placing Shares

‘‘Our Company’’, the ANTA Sports Products Limited ,anexempted ‘‘Compa ny’’ company incorporated with limited liability under the laws of the Cayman Islands on February 8, 2007

‘‘Over-allotment Option’’ the option to be granted by our Company to the International Underwriters exercisable by the Global Coordinator on behalf of the International Underwriters, pursuant to which our Company may be required to allot and issue up to 90,000,000 additional new Shares, representing 15% of the Shares initially available under the Global Offering at the Offer Price, to, among other things, cover over-allocations in the International Placing (if any) as further described in the section headed ‘‘Structure and Conditions of the Global Offering’’

‘‘PBOC’’ (the People’s Bank of China), the central bank of China

‘‘PRC Government’’ or the central government of the PRC, including all political sub-divisions ‘‘State ’’ (including provincial, municipal and other regional or local government entities) and instrumentalities thereof

‘‘Pre-IPO Share Option the existing share option scheme for employees of our Group approved and Scheme’’ adoptedbyourCompanypursuanttoaresolutionpassedbyourshareholders on June 11, 2007

‘‘Price Determination Date’’ the date, expected to be on or around Saturday, June 30, 2007 but not later than Thursday, July 5, 2007, on which the Offer Price is fixed for the purposes of the Global Offering

‘‘QIBs’’ qualified institutional buyers within the meaning of Rule 144A

‘‘Regulation S’’ Regulation S under the U.S. Securities Act

‘‘RMB’’ or ‘‘Renminbi’’ Renminbi, the lawful currency of the PRC

‘‘Rule 144A’’ Rule 144A under the U.S. Securities Act

‘‘SAFE’’ (the State Administration of Foreign Exchange of the PRC)

‘‘SFC’’ the Securities and Futures Commission of Hong Kong

‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

‘‘Shanghai Fengxian’’ (Shanghai Fengxian Sporting Goods Development Limited*), a limited liability company incorporated under the laws of the PRC on October 20, 2006 and an indirect wholly-owned subsidiary of our Company

‘‘Share(s)’’ ordinary share(s) with a nominal value of HK$0.10 each in the capital of our Company, which are to be subscribed for and traded in Hong Kong dollars andlistedontheStockExchange

—21— DEFINITIONS

‘‘Share Option Scheme’’ the share option scheme conditionally adopted by our Company on June 11, 2007, the principal terms of which are summarized in the paragraph headed ‘‘Share Option Scheme’’ in Appendix VI to this prospectus

‘‘Stock Borrowing a stock borrowing agreement expected to be entered into on or about June Agreement’’ 30, 2007 between Morgan Stanley & Co. International plc and Anta International

‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

‘‘Suzhou Fengxian’’ (Suzhou Fengxian Sporting Goods Co., Ltd.*), a limited liability company incorporated under the laws of the PRC on December 26, 2006 and an indirect wholly-owned subsidiary of our Company

‘‘Track Record Period’’ the three years ended December 31, 2006

‘‘Underwriters’’ the Hong Kong Underwriters and the International Underwriters

‘‘Underwriting the Hong Kong Underwriting Agreement and the International Underwriting Agreements’’ Agreement

‘‘United States’’ or ‘‘U.S.’’ the United States of America within the meaning of Regulation S

‘‘US dollars’’ or ‘‘US$’’ United States dollars, the lawful currency of the United States

‘‘U.S. Securities Act’’ the United States Securities Act of 1933, as amended

‘‘Xiamen Fengxian’’ (Xiamen Fengxian Sporting Goods Co., Ltd.*), a limited liability company incorporated under the laws of the PRC on January 22, 2007 and an indirect wholly-owned subsidiary of our Company

‘‘Xia men I nvestme nt’’ (Xiamen ANTA Investment Management Company Limited*), a limited liability company incorporated under the laws of the PRC on June 1, 2006 and an indirect wholly-owned subsidiary of our Company

‘‘Xiamen Trading’’ (Xiamen ANTA Trading Co., Ltd.), a wholly foreign-owned enterprise incorporated under the laws of the PRC on January 18, 2007 and an indirect wholly-owned subsidiary of our Company

‘‘%’’ per cent.

In this prospectus, unless otherwise stated, certain amounts denominated in Renminbi have been translated into HK dollars or US dollars at an exchange rate of RMB0.98 = HK$1.00 or RMB7.62 = US$1.00, respectively, for illustration purpose only. Such conversions shall not be construed as representations that amounts in Renminbi were or could have been or could be converted into HK dollars or US dollars at such rates or any other exchange rates on such date or any other date.

Certain amounts and percentage figures included in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures preceding them.

—22— DEFINITIONS

In this prospectus, if there is any inconsistency between the Chinese names of the entities or enterprises established in China and their English translations, the Chinese names shall prevail. The English translation of company names in Chinese or another language which are marked with ‘‘*’’ and the Chinese translation of company names in English which are marked with ‘‘*’’ is for identification purpose only.

—23— RISK FACTORS

Potential investors should consider carefully all the information set out in this prospectus and, in particular, should consider and evaluate the following risks associated with an investment in us before making any investment decision in relation to our Company. Additional risks and uncertainties not presently known to us or currently deemed immaterial could also harm our business, financial condition and operating results. If any of the possible events described below materialize, our business, financial condition and results of operations could be materially and adversely affected and the market price of the Offer Shares could fall significantly.

RISKS RELATING TO OUR GROUP’S OPERATIONS

Failure to effectively promote our ANTA brand may adversely affect our performance and sales of ANTA branded products

We believe that brand image is a key factor in consumers’ purchasing decisions for sportswear products. Our ANTA brand is therefore critical to our success in the PRC sportswear market. We seek to position our ANTA brand as a high quality sportswear brand targeting young consumer groups. We market our ANTA brand through media commercials, league sponsorships and athlete endorsements in different sporting sectors in China. If we fail to successfully promote our ANTA brand in China, the goodwill attached to our ANTA brand may decrease, and the market recognition of the ANTA brand may suffer. As a result, consumer confidence in our ANTA brand may be eroded and our business, profitability and results of operations may be adversely affected.

We rely on third party distributors and the retail outlet operators appointed by them for the sales of our ANTA products and any failure by us to maintain good relationships with the distributors or failure by them to ensure that such third party retail outlet operators adhere to our retail policies may adversely affect our business

Since 2007, we sell all of our ANTA products in the PRC to third party distributors, which in turn sell our products to consumers in the PRC through authorized ANTA retail outlets operated by these distributors or third party retail outlet operators appointed by these distributors. We do not sell any of our ANTA products directly to consumers and we do not own or operate any authorized ANTA retail outlets. During the Track Record Period, sales to third party distributors accounted for approximately 54.5%, 53.7% and 82.2%, respectively, of our total revenue. The remaining sales during the Track Record Period were made directly by us to sole proprietors and department stores, but since January 2007, all such sales have been made through our distributors. We therefore expect to continue to rely on these distributors for substantially all of our sales of ANTA products. As such, the sales performance of our distributors and the ability of our distributors to expand their business and sales networks are crucial to the future growth of our business. Furthermore, we do not have long-term agreements with these distributors, but generally enter into distributorship agreements with them for a term of one year, renewable annually. There is no assurance that we will be able to renew the distributorship agreements with these distributors on mutually acceptable terms or at all. If we fail to renew our distributorship agreements with any of them or to attract new distributors, the ANTA sales network, our financial condition and operating results may be adversely affected.

Further, we also rely on the contractual obligations set forth in the distributorship agreements entered into with our distributors to impose our retail policies on these distributors in respect of the authorized ANTA retail outlets directly operated or on third party retail outlet operators indirectly managed by them. As we do not enter into any agreements with these third party retail outlet operators, we rely on our distributors to manage these authorized ANTA retail outlets and to ensure that they operate in accordance with our retail policies. There is no assurance that our distributors or the third party retail outlet operators

—24— RISK FACTORS will comply with, or that the distributors will enforce, our retail policies. In such event, we may not be able to effectively manage the ANTA sales network or maintain a uniform brand image, and we cannot guarantee that such authorized ANTA retail outlets would continue to offer quality services to consumers. Although we intend to replace any distributors who consistently fail to comply with, or fail to cause the third party retail outlet operators appointed by them to comply with, our retail policies in their operation of authorized ANTA retail outlets, we may be unable to replace them in a timely manner. As a result, our business, results of operations and financial condition may be adversely affected.

We rely on a small number of customers for a significant portion of our sales. Our financial condition and results of operations may be adversely affected if we fail to maintain our relationship with any or all of these customers

A significant portion of our annual sales is derived from a small number of customers, who are the distributors of our ANTA products. Our five largest customers accounted for approximately 50.6%, 35.6%, and 44.7% of our total turnover for the three years ended December 31, 2004, 2005 and 2006, respectively. Our largest customer accounted for approximately 14.5%, 12.8% and 13.9% of our total turnover for the three years ended December 31, 2004, 2005 and 2006, respectively.

We generally enter into distributorship agreements with our distributors for a term of one year. There is no guarantee that any of our five largest distributors will renew their distributorship agreements with us on mutually acceptable terms. Further, our five largest customers are not obliged to continue to place orders with us at the same level as before or at all . We cannot provide any assurance that we would be able to obtain orders from other customers to replace any such lost sales. If any of our five largest customers substantially reduce their purchases from us, or otherwise fail to renew their agreements with us, we may suffer a significant loss of sales and our business, financial condition and results of operation may be adversely affected.

Our future success depends on our ability to anticipate and respond in a timely manner to ever- evolving consumer tastes and preferences for sportswear products

The success and popularity of our sportswear products depends, in large part, upon our ability to identify fashion trends and design products that appeal to the mass market. Fashion trends and consumer preferences, however, may change frequently. We are unable to guarantee that we can anticipate and respond in a timely manner to changes in consumer tastes and preferences. If we are unable to successfully adjust to changes in consumer tastes and preferences, the demand for our ANTA products may decrease and our business, financial condition and results of operations may be adversely affected.

The results of operations of our apparel business during the Track Record Period may not be indicative of our future performance

Since the commencement of our apparel business in 2002 and until the second quarter of 2007, we outsourced all of our apparel production to contract manufacturers. We only commenced our own apparel production in the second quarter of 2007 to meet a portion of our apparel sales. We do not have any experience in producing apparel products and we only have a limited operating history in the apparel business. As a result, the operating results of our apparel business during the Track Record Period may not provide a meaningful basis for evaluating the performance of our apparel business going forward and may not be indicative of our future performance.

—25— RISK FACTORS

Our ability to increase our operating results in the future depends on the successful expansion of our production capacity

During the Track Record Period, we manufactured a significant portion of our footwear products and outsourced the production of the remainder of our footwear products and all of our apparel and accessory products to contract manufacturers. We only commenced our own production of a portion of our apparel products in 2007. Our footwear production facilities operated at close to full capacity in the year ended December 31, 2006. Our ability to continue to increase our sales depends on the successful expansion of our footwear production capacity and the availability of external contract manufacturers with sufficient production capacity. In 2006, we constructed five new footwear production lines at our Jinjiang facilities increasing the number of our footwear production lines from ten to fifteen. These five new production lines commenced production in the first quarter of 2007. However, our internal footwear production facilities may continue to be under pressure in the future. In addition, our new apparel production facilities in Changting, which commenced operation in the second quarter of 2007, and in Xiamen, which we expect to commence production in the third quarter of 2007, will only produce a portion of our apparel products. We are likely to continue to rely on external contract manufacturers for the production of a portion of our footwear, most of our apparel and all of our accessories. If we are unable to continue to successfully increase our internal production capacity or engage suitable external contract manufacturers who are able to help fulfil sales orders in excess of our internal production capacity, our future operating results may be adversely affected.

During the Track Record Period, we relied on our contract manufacturers for the production of a portion of our footwear and all of our apparel and accessory products, and since we commenced our apparel production in 2007, we continued to rely on our contract manufacturers for the production of a portion of our footwear and apparel products and all of our accessory products. Any disruption to the supply of products from our contract manufacturers would adversely affect our operating results

During the Track Record Period, approximately 18.9%, 15.4% and 24.6% of the total production volume of our ANTA footwear, and all of our apparel and accessory products, were manufactured by third party contract manufacturers. We only commenced our own production of a portion of our apparel products in 2007. We have not entered into any long term contracts with these contract manufacturers. Any of them may unilaterally terminate their relationship with us at any time or seek to increase the prices that they charge us. As a result, we are not assured of an uninterrupted supply of footwear, apparel and accessory products of acceptable quality and prices from our third party contract manufacturers. We may not be able to offset any interruption or decrease in supply of our products by increasing production at our own production facilities due to capacity constraints, and may not be able to substitute suitable alternative third party contract manufacturers in a timely manner or who will supply us at acceptable prices. Any disruption in the supply of products from our third party contract manufacturers may adversely affect our business and could result in a loss of sales and an increase in production costs, which would adversely affect our business and results of operations.

We rely on a small number of suppliers for a large portion of our raw material and product supply and any interruption of supply from these suppliers would affect our results of operations

In addition to purchases of raw materials, we also purchase a portion of our footwear and apparel and all of our accessory products from our suppliers. We only commenced our own production of a portion of our apparel products in 2007. During the Track Record Period, our five largest suppliers included some of our contract manufacturers and suppliers of various types of artificial leather for our footwear production. Our five largest suppliers accounted for approximately 43.2%, 27.6%, and 33.5% of our total purchases for the three years ended December 31, 2004, 2005 and 2006, respectively. Our largest supplier accounted for approximately 14.9%, 6.5% and 9.2% of our total purchases for the three years ended December 31, 2004,

—26— RISK FACTORS

2005 and 2006, respectively. There is no assurance that such suppliers would be able to deliver raw materials or finished products to us in a timely manner or at acceptable prices and quality. Further, we do not enter into long-term agreements with any of our five largest suppliers. As such, we cannot guarantee that there will be no interruption in the supply of raw materials or footwear, apparel and accessory products from our suppliers. Any disruption in supply of raw materials or products from our suppliers may adversely affect our business, financial condition and results of operations.

Our operating results may be adversely affected by increases in the market prices of raw materials if we are unable to pass on the increased cost of raw materials to our customers through higher prices for our products

Our manufacturing operations depend on obtaining adequate supplies of raw materials. We purchase all of our materials on an order-by-order basis and have no long-term contracts with any suppliers. The prices of certain of our key raw materials, such as artificial leather, are subject to fluctuations in crude oil prices. During the Track Record Period, the average prices of artificial leather purchased by us were approximately RMB53.2, RMB62.0 and RMB53.6 per meter, respectively. We may also experience difficulty in obtaining other acceptable quality materials on a timely basis and the prices that we pay for such materials may increase due to increased industry demand. If we are unable to pass on the increased cost to our customers, our business, financial condition and results of operations may be adversely affected.

We may not be able to adequately protect our intellectual property rights, which could harm our ANTA brand and our business

Our principal intellectual property rights include our ‘‘ANTA’’ and ‘‘ ’’ trademarks, as well as the patents for technologies or product features or designs. As at the Latest Practicable Date, we had been granted three utility patents and nine design patents for our products. We are currently applying for the registration of patents for a number of other designs and product features. The success of a patent application depends upon a number of factors, and we cannot guarantee that we will be successful in obtaining patents for technologies or product features currently under application or which we may develop in the future. We depend to a significant extent on PRC laws to protect our trademarks, patents or other intellectual property rights. There is no assurance that third parties will not infringe our intellectual property rights. We have discovered counterfeit versions of our products on the market. Our efforts to enforce or defend our intellectual property rights may not be adequate and may require significant attention from our management and may be costly. The outcome of any legal actions to protect our intellectual property rights may be uncertain. In the event that we are unable to adequately protect or safeguard our intellectual property rights, our business, financial condition and results of operation may be adversely affected.

Our business could be adversely affected by intellectual property rights disputes or proceedings with third parties for possible infringement of their intellectual property rights

It is possible that third parties, including our competitors, may seek to bring claims against us that our products infringe their trademarks, copyrights, patents or other intellectual property rights, and, as a result, we might be required to devote substantial management time and resources to defend such claims. The risk of being subject to such claims will increase as we continue to expand and diversify our product mix. Because patent applications in the PRC are confidential, and many new patent applications are currently under review in the PRC, we may be unable to determine whether any of our products, their features or their design or appearance infringe, or will infringe, upon the patent rights of others. If we are unsuccessful in defending any claim against us for infringement of others’ intellectual property rights, we may be required to take certain actions including paying monetary damages, modifying our products or suspending our production and sale of such products, any of which could adversely affect our business, reputation and results of operations.

—27— RISK FACTORS

We may not succeed in expanding into the PRC sportswear retail business

As part of our overall strategy, we are expanding our business into sportswear retailing in the PRC, including retailing of ANTA products and products under authorized brands.

We entered into retail agreements with Adidas (Suzhou) and Adidas (China) to sell sporting goods under the adidas and Reebok brands in China for a period of three years from January 1, 2007 to December 31, 2009 and two years from January 1, 2007 to December 31, 2008, respectively. We also signed a re- distributorship agreement with Dongzhijie, an authorized sub-distributor of the Kappa brand in China, to retail sporting goods under the Kappa brand in Shanghai for a period of one year from January 1, 2007 to December 31, 2007. The agreement with Dongzhijie requires us to meet designated targets for sales and the number of stores we open during the term of the agreement. In addition, Adidas (Suzhou) and Adidas (China) have the right to impose such targets on us pursuant to the terms of our retail agreements with them. Should we fail to meet such targets, steps may be taken against us, such as reducing the level of discounts enjoyed by us on our purchases of the authorized products or unilaterally terminating the relevant agreements. As at April 30, 2007, we operated and managed 13 retail outlets to sell adidas branded products, 15 retail outlets to sell Reebok branded products and 12 retail outlets to sell Kappa branded products.

We also plan to establish and operate our own flagship stores in prime locations to sell our ANTA products. In addition, we plan to open retail sports complexes selling sportswear under a variety of brands, including our ANTA products, as well as our authorized brands and products distributed by other retailers. There is a possibility that the flagship stores and retail sports complexes that we operate may compete with the authorized ANTA retail outlets directly operated or indirectly managed by our distributors and we cannot assure you that our revenues will increase as a result of, and that our relationship with our distributors will not be adversely affected by, our retail sales efforts.

Our retail business will require the investment of significant capital for the lease or purchase of premises, purchase of sporting goods and hiring of sales and other staff, which may place significant demands and strains on our financial resources and on management time. We have little or no experience in the operation of retail stores and cannot guarantee that we will be successful in the establishment or operation of these stores. We currently anticipate that our retail business will be loss-making during its initial set-up phase in 2007. In addition, if we fail to meet the relevant targets set under our agreement with Dongzhijie or which may be set under our retail agreements with Adidas (Suzhou) and Adidas (China), we may be unable to recover any investments that we have made in this business and may remain subject to liabilities under the terms of lease and other agreements entered into. In addition, we cannot assure you that our operation of stores selling products under the adidas, Reebok and Kappa brands, which compete with products sold under our ANTA brand, will not adversely impact our sales of ANTA branded products. If we are unsuccessful in our retail business or are unable to renew our retail agreements or re-distributorship agreement on the expiry of their terms, our business, financial condition and results of operations may be adversely affected.

We may not be successful in implementing our future expansion plans and may not secure additional funding for the implementation of such plans

Our business expansion plans will require us to increase investment in, and devote significant resources to, our brand promotion efforts, our internal production capacities, our research and design capabilities, the ANTA sales network and our retail network for other authorized branded products.

—28— RISK FACTORS

The opening of retail outlets by us is subject to the relevant permits and approvals from regulatory authorities in the PRC. Should we experience delays in, or fail to obtain, such approvals, we may not be able to continue to increase the size of the sales networks for our ANTA or authorized branded products in accordance with our expansion plan.

If we fail to implement our future expansion plans, we may not achieve the growth we expect. Furthermore, our ability to obtain adequate funds to finance our expansion plans will depend on our financial condition and results of operations, as well as other factors that may be outside our control, such as general market conditions, the performance of the PRC sportswear industry, and political and economic conditions in China. If additional capital is unavailable, we may be forced to abandon some or all of our expansion plans, as a result of which our business, financial condition and results of operations could be adversely affected.

We incurred losses in 2004 and may incur additional losses in the future

We incurred a net loss of approximately RMB8.4 million in 2004, primarily because we incurred significant expenditures of approximately RMB29.1 million on brand building and marketing activities for the purpose of driving the expansion of our business during the year, and also because we set lower prices for our apparel and accessory products which were introduced to the markets in 2002 and 2003, respectively, in order to promote these products to the market. We expect our operating expenses to increase as we expand our operations. Our ability to maintain profitability depends on the PRC sportswear market conditions, the continued market acceptance of our ANTA products, the competitiveness of our products and our ability to provide new products and services to meet the demand of our target consumer groups. There is no assurance that we will not incur additional losses in the future.

Loss of any of our key executive personnel or any failure to attract such personnel in the future will adversely impact our business and growth prospects

Our future success depends upon the continued service of our senior management, in particular, our executive Directors. Their talent, effort, experience and leadership are critical to our operations and financial performance. If we lose the services of any of these key personnel, including our executive Directors, Mr. Ding Shizhong and Mr. Lai Shixian, without adequate replacement, such loss may reduce our competitiveness, and may adversely affect our financial condition, operating results and future prospects. We intend to expand the scale of our production of ANTA products and increase our presence in the sportswear retail market, all of which will require additional personnel. In addition, we may need to offer higher compensation and other benefits in order to attract and retain key personnel. There is no assurance that we will be able to retain our existing key executives or attract additional qualified personnel in the future.

Increases in labor costs in China may adversely affect our business and our profitability

The sportswear manufacturing industry is labor intensive. Labor costs in China have been increasing recently, and we cannot assure you that the cost of labor in China will not continue to increase in the future or that we will be able to increase the prices of our products to offset such increases. If labor costs in China continue to increase, our production and administration costs will increase. If we are not able to pass these increases on to our customers, our business, profitability and results of operations will be adversely affected.

—29— RISK FACTORS

Disruption in the supply of electricity to our production facilities may adversely impact our production

Our manufacturing processes consume substantial amounts of electricity supplied by local power grids. We have in the past experienced interruptions of, and limitations on, our electricity supply. We maintain backup power generators to provide electricity to our machinery and equipment in the case of electricity supply interruptions. However, there can be no assurance that we will always have adequate supply of electricity to meet our production requirements and our results of operations may be adversely affected in the event of any interruption in electricity supply.

Our current insurance coverage may not be sufficient to cover the risks related to our operations

Our operations are subject to hazards and risks normally associated with manufacturing operations, which may cause damage to persons or property. Currently, we maintain insurance policies in respect of damage to real estate property, employer liability for personal injury of employees and third party liability for vehicle-related accidents. We do not have insurance coverage for product liability and therefore, we may be exposed to product liability claims in the event that any of our products is alleged to have caused bodily injury or other adverse effects. Further, we do not maintain business interruption insurance or third party liability insurance against claims for property damage, personal injury and environmental liabilities. The occurrence of any of these events may result in interruption of our operations and subject us to significant losses or liabilities. Any losses or liabilities that are not covered by our current insurance policies may have a material adverse effect on our business, financial condition and results of operations.

Any change in our tax treatment, including preferential corporate tax rates, in China may have a negative impact on our operating results

On March 16, 2007, the National People’s Congress of the PRC promulgated the new Enterprise Income Tax Law of the PRC (‘‘New Tax Law’’), which will come into effect on January 1, 2008 and will supersede the PRC Foreign Invested Enterprise and Foreign Enterprise Income Tax Law (‘‘FIE Tax Law’’) and the Provisional Regulations on Enterprise Income Tax of the PRC at the same time. The New Tax Law will consolidate the current two separate tax regimes for domestic enterprises and foreign invested enterprises and impose a unified enterprise income tax rate of 25% for both types of enterprise.

Under the New Tax Law, enterprises that currently enjoy a preferential tax rate prior to the New Tax Law’s promulgation will gradually transit to the new tax rate over five years from the effective date of the New Tax Law. Enterprises which currently enjoy a fixed period of tax exemption and reduction under currently applicable rules and regulations will continue to enjoy such preferential tax treatment until the expiry of such prescribed period, and for those enterprises whose preferential tax treatment has not commenced due to lack of profit, such preferential tax treatment will commence from the effective date of the New Tax Law.

Under the current tax regime, ANTA China, being a foreign invested enterprise engaged in manufacturing business, is entitled to an enterprise income tax exemption for its first two years of profitable operations (after offsetting all tax losses carried forward from previous years), and a 50% tax reduction for the following three consecutive years. Located in the coastal economic open zone, ANTA China is subject to a preferential state enterprise income tax rate of 24% and is exempt from the local enterprise income tax for five years. ANTA China enjoyed a full exemption from state enterprise incometaxin2005and2006, which had a significant positive effect on our profit after taxation during the years ended December 31, 2005 and 2006. Under the New Tax Law, we expect that ANTA China will continue to be entitled to a 50% reduction of its current state enterprise income tax rate of 24% for three years from 2007 to 2009, and will thereafter be subject to a 25% tax rate. We expect that upon the expiry of the full exemption from enterprise income tax currently enjoyed by ANTA China, our Group’s tax payment will increase from 2007 onwards and will further increase following the expiry of the above preferential tax treatment.

—30— RISK FACTORS

Under the FIE Tax Law, a foreign invested enterprise engaged in the manufacturing business and scheduled to operate for a period of not shorter than ten years is entitled to the preferential tax treatment of two years’ full exemption and three years’ 50% reduction subject to the approval by the competent tax authority. Under the current tax regime, ANTA Changting and ANTA Quanzhou are qualified for the same type of preferential tax treatments as ANTA China because they are engaged in the manufacturing business and as a result of their places of incorporation and their foreign invested enterprise status except that ANTA Changting is not exempted from the local enterprise income tax. ANTA Xiamen, being a foreign invested enterprise engaged in the manufacturing business, is qualified for the preferential tax treatment of two years’ full exemption and three years’ 50% reduction available under the FIE Tax Law. However, ANTA Changting, ANTA Quanzhou and ANTA Xiamen shall apply for and obtain the approval from the competent tax authorities for the preferential tax treatment of two years’ full exemption and three years’ 50% reduction after they have started to make profit. Shanghai Fengxian enjoys a full exemption from enterprise income tax in 2007 because it was newly incorporated in Shanghai Pudong District.

ANTA Xiamen, Xiamen Trading and Xiamen Investment, all are qualified for a preferential tax rate of 15% because they were all incorporated in Xiamen Special Economic Zone. Their current preferential tax rate of 15% will, according to the New Tax Law, gradually transit to 25% within five years from January 1, 2008. Similarly, the current preferential tax rate of 15% applicable to Shanghai Fengxian will also undergo transition to 25% within the same five year period. Therefore, by 2013, each of ANTA Quanzhou, ANTA Xiamen, Shanghai Fengxian, Xiamen Trading and Xiamen Investment will be subject to the same enterprise income tax rate of 25%. As the detailed implementation rules of the New Tax Law have not yet been published, it is unclear how the tax rate will be raised during the transitional period. However, the New Tax Law and the change in the enterprise income tax rate would have a material adverse impact on our results of operation.

Under the New Tax Law, if an enterprise incorporated outside the PRC has its ‘‘effective management’’ located within the PRC, such enterprise may be recognized as a PRC tax resident enterprise and be subject to the unified enterprise income tax rate of 25%. We cannot rule out the possibility that members of our Group which are not incorporated in the PRC may be recognized as a PRC tax resident enterprise according to the New Tax Law by the PRC taxation authorities in the future. According to the New Tax Law, dividends received by a qualified PRC tax resident from another PRC tax resident are exempted from enterprise income tax. However, given the short history of the New Tax Law, it remains unclear as to the detailed qualification requirements for such exemption and whether dividends declared and paid by members of our Group in the PRC to their overseas holding companies will be exempted from enterprise income tax if they are recognized as PRC tax residents. Our financial performance will be adversely affected if such dividends are subject to enterprise income tax.

The operating results of our business may fluctuate due to seasonality

Our operating results have fluctuated from season to season in the past and are likely to continue to fluctuate due to seasonality. During the Track Record Period, we generally recorded higher sales in the third and fourth quarters than in the first and second quarters, and our highest sales were generally recorded in the fourth quarter of the year. The seasonality of our operating results is primarily attributable to the seasonal nature of some of our products, particularly our apparel products, and the fact that our autumn and winter apparel products generally have higher selling prices than our spring and summer products. In addition, there are other factors relevant to seasonality which may affect our sales, including weather conditions and the timing of the launch of our new products. Accordingly, any unpredictable change in weather patterns may adversely affect our performance, and any comparison of our operating results between our interim and annual results in a calendar year is not necessarily meaningful. As a result, our interim results should not be referred to as an indicator of our performance for the year.

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Historical dividends should not be used as an indicator for our future dividend policy

For the year ended December 31, 2006, ANTA Jinjiang and ANTA Fujian declared dividends of an aggregate of approximately RMB22.9 million, representing approximately 15.5% of our profit attributable to shareholders for that period. Whilst we intend to make dividend payments in the future, the amount of dividends to be declared and paid will be subject to, among other things, the full discretion of our Board, taking into consideration our earnings, financial condition, cash requirements and availability, the provisions of the applicable laws and regulations and other relevant factors in each financial year. Accordingly, our historical dividend distribution should not be used as a reference or basis to determine the level of dividends that may be declared and paid by us in the future.

We recorded net current liabilities during the Track Record Period and we cannot assure you that we will not experience net current liabilities again in the future

We had a net current liabilities position of approximately RMB83.2 million as at December 31, 2005 and a net current liabilities position of approximately RMB27.3 million as at December 31, 2006, primarily due to outstanding advances from our Controlling Shareholders of approximately RMB236.2 million and RMB220.5 million in the respective years. These advances from our Controlling Shareholders mainly served as short term funds to support the expansion of our footwear production facilities and the construction of our office building in Jinjiang. We settled these advances from our Controlling Shareholders prior to the Listing, by repaying approximately HK$75.0 million (equivalent to approximately RMB75.4 million at a conversion rate of HK$1.000 to RMB1.005) to our Controlling Shareholders and the Controlling Shareholders assigning the loan of approximately HK$144.4 million (equivalent to approximately RMB145.1 million at a conversion rate of HK$1.000 to RMB1.005) to our subsidiary, Anta Enterprise. For details of the indebtedness and liquidity, financial resources and capital structure of our Group, please refer to the section headed ‘‘Financial Information’’ in this prospectus. We cannot assure you that we will not experience periods of net current liabilities in the future. In the event that we have net current liabilities in the future, our working capital for the purposes of our operations may be constrained.

We relied on the provision of advances to us by our Controlling Shareholders during the Track Record Period for our expansion and the cessation of such advances upon the Listing may affect our cash flows

We had advances from our Controlling Shareholders in the amount of approximately RMB236.2 million and RMB220.5 million as at December 31, 2005 and 2006, respectively. These advances mainly served as short term funds to support the expansion of our footwear production facilities and the construction of our office building in Jinjiang. We have settled these advances prior to the Listing and have no plan to obtain further advances from our Controlling Shareholders. Please see ‘‘Financial Information — Net Current Assets/Liabilities’’ and ‘‘— Amounts due from/to related parties and advances from the Controlling Shareholders’’ for further information. Should we fail to generate sufficient cash flows from our operations, or obtain alternative financing, to meet the operating expenditure of our Group in the future, our working capital will be constrained.

Our ANTA brand may be damaged if our contract manufacturers or suppliers violate any relevant laws, rules or regulations, particularly in respect of labor and environmental protection

We place great emphasis on brand building and the promotion of our ANTA products. In order to protect the reputation of our ANTA brand, we strive to adhere to all relevant laws, rules and regulations, particularly in respect of labor and environmental protection. However, we do not exercise any control over the operations of our contract manufacturers and suppliers and are therefore not able to ensure their compliance with applicable laws and regulations. There is therefore no assurance that our contract manufacturers and suppliers will fully comply with all applicable labor and environmental laws, rules and

—32— RISK FACTORS regulations. In the event that our contract manufacturers or suppliers violate any of these laws, rules or regulations, any resulting negative publicity may damage our ANTA brand and counter our brand building efforts. As a result, our business, profitability and results of operations may be adversely affected.

Any change in the laws and regulations in relation to the retail industry in the PRC may intensify competition in the PRC retail industry, which may adversely affect our expansion into the sportswear retail business and our operating results

The PRC government has removed certain restrictions on foreign investment in the PRC retail sector in recent years. The Administration Measures on Foreign Investment in the Commercial Sectors ( ) (the ‘‘Measures’’) promulgated by the Ministry of Commerce came into effect on June 1, 2004 and permitted foreign investors to operate retail outlets in the PRC on a wholly foreign-owned basis. The Notice of the Ministry of Commerce on Entrusting Local Departments to Examine and Approve Foreign Invested Commercial Enterprises ( ) (the ‘‘Notice’’) issued by the Ministry of Commerce came into effect on March 1, 2006 and simplified the approval procedures for setting up foreign invested commercial enterprises and opening retail outlets. Under the terms of the accession of the PRC to the World Trade Organization, or WTO, the PRC government agreed to remove geographical limitations for foreign invested enterprises to engage in the retail business in the PRC. These liberalization measures may attract more international sportswear brands to enter the PRC market and thereby intensify competition. This may in turn have a material adverse impact on our business, financial condition and results of operations.

We may be required to obtain additional approvals from the PRC authorities for the operation of our retail business and failure to obtain such approvals will adversely affect our retail business

Our retail business in relation to adidas, Reebok and Kappa brands is operated and managed by our subsidiaries including Shanghai Fengxian, Beijing Fengxian, Guangzhou Fengxian, Harbin Fengxian, Suzhou Fengxian and Xiamen Fengxian, all of which are limited liability companies incorporated in the PRC. As advised by our Company’s PRC legal adviser, Commerce & Finance Law Offices, there is no explicit requirement for any approval from the competent commercial authorities for the establishment of a commercial enterprise as funded by a subsidiary of a foreign-invested enterprise and for its opening of retail outlets under the Measures and the Notice described in the risk factor headed ‘‘Any change in the laws and regulations in relation to the retail industry in the PRC may intensify competition in the PRC retail industry which may adversely affect out expansion into the sportswear retail business and our operating results’’ above. There is no assurance, however, that the Ministry of Commerce in the PRC will not apply the Measures to these subsidiaries and require them to obtain relevant licences, approvals or permits for their operation of retail outlets. Furthermore, if the PRC government imposes new restrictions on foreign investment in the PRC retail industry, our operation of retail outlets through these subsidiaries may be adversely affected. Any change in the laws and regulations in relation to the retail industry in the PRC may adversely affect the expansion of our business into sportswear retailing in the PRC, including retailing of ANTA products and products under the adidas, Reebok and Kappa brands.

The costs of share options granted under the Pre-IPO Share Option Scheme and the Share Option Scheme will adversely affect our results of operations and any exercise of the options granted may result in a dilution of Shareholders’ shareholdings

Our Company has adopted the Pre-IPO Share Option Scheme under which options entitling the holders thereof to subscribe for an aggregate of 16,000,000 Shares (representing (i) approximately 0.667% of the issued share capital of our Company immediately after completion of the Global Offering and the Capitalization Issue (without taking into account any Shares which may be allotted and issued upon the exercise of any options which have been granted under the Pre-IPO Share Option Scheme or which may be

—33— RISK FACTORS granted under the Share Option Scheme or the exercise of the Over-allotment Option); and (ii) approximately 0.662% of the issued share capital of our Company immediately after the completion of the Global Offering and the Capitalization Issue and assuming that all options granted under the Pre-IPO Share OptionSchemeareexercisedatthesametime(withouttakingintoaccountanyShareswhichmaybe allotted and issued upon the exercise of any options which may be granted under the Share Option Scheme or the exercise of the Over-allotment Option). Our Company has also adopted the Share Option Scheme although no options have been granted thereunder.

Based on our Group’s valuer’s valuation, the fair value of the options granted under the Pre-IPO Share Option Scheme as at June 12, 2007 was approximately HK$2.5 million. The fair value of the options granted under the Pre-IPO Share Option Scheme will be amortized over a vesting period of three years and hence, there will be an impact on our Group’s income statements for the years ending December 31, 2007 to December 31, 2010. Approximately HK$0.5 million, HK$1.0 million, HK$0.7 million and HK$0.3 million are expected to be charged to the income statements for the four years ending December 31, 2010, respectively.

Any exercise of the options granted under the Pre-IPO Share Option Scheme or to be granted under the Share Option Scheme in the future and issuance of Shares thereunder would result in a reduction in the percentage ownership of the Shareholders and may result in a dilution in the earnings per Share and net assets value per Share, as a result of the increase in the number of Shares outstanding after the issuance.

Under International Financial Reporting Standards, the costs of share options granted to employees under the Pre-IPO Share Option Scheme and the Share Option Scheme will be charged to our Group’s income statement over the vesting period by reference to the fair value at the date at which the share options are granted. As a result, our Group’s profitability may be adversely affected.

RISKS RELATING TO OUR INDUSTRY

Our future performance is dependent on the PRC economy and, in particular,thelevelofgrowthof the PRC consumer market

As we derive substantially all of our turnover from sales of our products in the PRC, the success of our business depends on the condition and growth of the PRC consumer market, which in turn depends on macro-economic conditions and individual income levels in the PRC. We believe that consumer spending habits may be adversely affected during a period of recession in the economy or that uncertainties regarding future economic prospects could also affect consumer spending habits, all of which may have an adverse effect on certain enterprises operating within the consumer and retail sectors, including us.

There can be no assurance that projected growth rates of the PRC economy and the PRC consumer market, including those described in the section headed ‘‘Industry Overview’’ in this prospectus, will be realized. Any future slowdowns or declines in the PRC economy or consumer spending may adversely affect our business, operating results and financial condition.

Competition in the PRC sportswear industry may adversely affect our brand loyalty and results of operations

The sportswear industry is highly competitive in the PRC and worldwide. Industry players compete with one another based on, among other things, brand loyalty, product variety, product design, product quality and price. There is no assurance that we will be able to compete with others in the future in light of the changing and competitive market environment. In particular, our athletic footwear and apparel products compete with international and domestic sportswear brands such as Nike, adidas and Li Ning. These and

—34— RISK FACTORS other competitors may also have greater financial resources, stronger distribution capabilities and greater brand recognition than we do. Increased competition in the industry may pose challenges to our market share and reduce our sales, prices and margins and adversely affect our brand loyalty and results of operations.

Furthermore, with the accession of the PRC to the World Trade Organization, or WTO, changes and developments in the consumer and retail market may be volatile and unpredictable. For instance, further entry of international brands may intensify the competition in the PRC market. We expect increased participation by foreign competitors in the PRC sportswear industry. This may have a material adverse impact on our business, operating results and financial condition.

RISKS RELATING TO CONDUCTING BUSINESS IN THE PRC

A substantial portion of our assets are located in the PRC and substantially all of our revenues are derived from our operations in the PRC. As a result, our operations and assets are subject to significant political, economic, legal and other uncertainties associated with doing business in the PRC, which are discussed in more details below.

Changes in the economic, political and social conditions in the PRC and policies adopted by the PRC Government may adversely affect our business, operating results and financial condition

The PRC’s economy differs from the economies of most developed countries in many respects, including structure, government involvement, level of development, growth rate, control of foreign exchange, capital reinvestment, allocation of resources, rate of inflation and trade balance position. The economy of the PRC has been transitioning from a planned economy to a more market-oriented economy. In recent years, the PRC Government has implemented measures emphasizing market forces for economic reform, the reduction of State ownership of productive assets and the establishment of sound corporate governance in business enterprises. However, a large portion of productive assets in the PRC are still owned by the PRC Government. The PRC Government continues to play a significant role in regulating industrial development, the allocation of resources, production, pricing and management, and there can be no assurance that the PRC Government will continue to pursue a policy of economic reform.

We may not in all cases be able to capitalize on the economic reform measures adopted by the PRC Government. Our operations and financial results could be adversely affected by changes in political, economic and social conditions or the relevant policies of the PRC Government, such as changes in laws and regulations (or the interpretation thereof), measures which might be introduced to control inflation, changes in the rate or method of taxation, imposition of additional restrictions on currency conversion and the imposition of additional import restrictions.

The PRC legal system is not fully developed and has inherent uncertainties which could limit the legal protections available to us and adversely affect our operations

Although our Company is an exempted company incorporated with limited liability under the laws of the Caymans Islands, substantially all of our operations are conducted through our subsidiaries which are organized under PRC laws in China. The PRC legal system is based on written statutes. Since the late 1970s, the PRC has promulgated laws and regulations dealing with such economic matters as the issuance and trading of securities, shareholder rights, foreign investment, corporate organization and governance, commerce, taxation and trade. However, many of these laws and regulations are relatively new and will continue to evolve, are subject to different interpretations and may be inconsistently enforced. In addition, there is only a limited volume of published court decisions which may be cited for reference, but such cases

—35— RISK FACTORS have limited precedential value as they are not binding on subsequent cases. These uncertainties relating to the interpretation of PRC laws and regulations can affect the legal remedies and protections that are available to you and can adversely affect the value of your investment.

Changes in foreign exchange regulations and futuremovementsintheexchangerateoftheRenminbi may affect the value of any future dividend payments

The value of the Renminbi is subject to changes in the PRC Government’s policies and depends to a large extent on domestic and international economic and political developments. The official exchange rate for the conversion of Renminbi to U.S. dollars generally remained stable during the past decade. On July 21, 2005, the PRC government started to allow the value of the Renminbi to fluctuate within a regulated band based on market supply and demand and by reference to a basket of currencies. On the same day, the Renminbi was revalued upward by approximately 2.1% against the U.S. dollar. As at the Latest Practicable Date, the value of Renminbi had further appreciated by approximately 6.0% against the U.S. Dollar. Since our income and profits are denominated in Renminbi, any depreciation of the Renminbi would adversely affect the value of, and any dividends payable on, our Shares in foreign currency terms.

We are a holding company that heavily relies on dividend payments from our subsidiaries for funding

We are a holding company incorporated in the Cayman Islands and operate our core business through our subsidiaries in China. Therefore, the availability of funds to us to pay dividends to our shareholders depends upon dividends received from these subsidiaries. If our subsidiaries incur debt or losses, such indebtedness or loss may impair their ability to pay dividends or other distributions to us. As a result, our ability to pay dividends will be restricted. PRC laws require that dividends be paid only out of the net profit calculated according to PRC accounting principles, which differ in many aspects from generally accepted accounting principles in other jurisdictions, including International Financial Reporting Standards. PRC laws also require foreign invested enterprises to set asidepartoftheirnetprofitas statutory reserves. These statutory reserves are not available for distribution as cash dividends. In addition, restrictive covenants in bank credit facilities or other agreements that we or our subsidiaries may enter into in the future may also restrict the ability of our subsidiaries to make contributions to us and our ability to receive distributions. Therefore, these restrictions on the availability and usage of our major source of funding may impact our ability to pay dividends to our shareholders.

It may be difficult to effect service of process upon our Directors who live in China or to enforce against them in China judgments obtained from non-PRC courts

All of our executive Directors are residents of China. A substantial proportion of our assets and the majority of the assets of those Directors who are residents of China are located within China. Therefore, it may not be possible for investors to effect service of process upon us or those persons inside China. China does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts within the United States, or most other western countries. In addition, Hong Kong has no arrangement with the United States for reciprocal enforcement of judgments. Therefore, it may be difficult for investors to enforce any judgments obtained from non-PRC courts against us or our Directors in China.

An outbreak of the Avian Influenza or SARS or any other similar epidemic may, directly or indirectly, adversely affect our operating results and the price of the Shares

Recently, certain Asian countries, including China, have encountered epidemics such as Severe Acute Respiratory Syndrome (SARS) or incidents of the Avian Flu. Past occurrences of epidemics have caused different degrees of damage to the national and local economies in China. The Avian Flu disease, which is spread through poultry populations, is capable in certain circumstances of being transmitted to humans and

—36— RISK FACTORS could be fatal. If any of our employees are identified as a possible source of spreading the Avian Flu or any other similar epidemic, we may be required to quarantine employees that are suspected of being infected, as well as others that have come into contact with those employees. We may also be required to disinfect our affected premises, which could cause a temporary suspension of our manufacturing capacity, thus adversely affecting our operations. A recurrence of an outbreak of SARS, Avian Flu or any other similar epidemic could restrict the level of economic activity generally and/or slow down or disrupt exporting activities whichcouldinturnadverselyaffect our results of operations and the price of the Shares.

RISKS RELATING TO THE GLOBAL OFFERING

There has been no prior public market for our Shares and an active trading market for our Shares may not develop

Prior to the Global Offering, there has been no public market for our Shares. We have applied to list and deal in the Shares on the Stock Exchange. However, being listed on the Stock Exchange does not guarantee that an active trading market for the Shares will develop or be sustained following the completion of the Global Offering. The Offer Price for the Shares will be determined by negotiations between ourselves and the Global Coordinator (on behalf of the Underwriters), and may differ significantly from the market price for our Shares after the Global Offering. Investors may not be able to resell their Shares at or above the Offer Price. In addition, as there will be a five Business Day gap between pricing and trading of the Shares offered in the Global Offering, the initial trading price of our Shares could be lower than the Offer Price.

The trading price of our Shares may be volatile

Following the Global Offering, the market price of our Shares may fluctuate substantially as a result of, amongst others, the following factors which are beyond our control:

. variations of the results of our operations (including variations arising from foreign exchange rate fluctuations);

. changes in securities analysts’ estimates of our financial performance;

. investors’ perceptions of us and the investment environment in Asia, including Hong Kong and the PRC;

. changes in policies and developments related to the industry in which we operate;

. changes in pricing policies adopted by us or our competitors;

. fluctuations in stock market prices and trading volume;

. recruitment or departure of key personnel; and

. economic and other general factors.

Moreover, in recent years, stock markets in general, and the shares of companies with substantial operations in the PRC in particular, have experienced increasing price and volume fluctuations, some of which have been unrelated or did not fully correspond to the operating performance of such companies. These broad market and industry fluctuations may adversely affect the market price of our Shares.

—37— RISK FACTORS

Future sales of Shares or a major divestment of Shares by any major shareholder could adversely affect the Share price

ThesaleofasignificantnumberofSharesinthepublic market after the Global Offering, or the perception that these sales may occur, could adversely affect the market price of the Shares. Except as otherwise described in the section headed ‘‘Underwriting’’, there are no restrictions imposed on our Controlling Shareholders to dispose of their Shares. Any major disposal of Shares by any of our major shareholders may cause the market price of the Shares to fall. In addition, these disposals may make it more difficult for us to issue new Shares in the future at a time and price we deem appropriate, thereby limiting our ability to raise capital.

Investors may face difficulties in protecting their interests because our Company is incorporated under Cayman Islands law, which may provide less protection to minority shareholders than the laws of Hong Kong and other jurisdictions

Our corporate affairs are governed by our Memorandum and Articles and by the Companies Law and common law of the Cayman Islands. The laws of the Cayman Islands relating to the protection of the interests of minority shareholders differ in some respects from those in Hong Kong and other jurisdictions. Such differences may mean that our minority shareholders, including investors in our Shares, may have less protection than they would otherwise have under the laws of Hong Kong or other jurisdictions. For example, the Cayman Islands does not have a statutory equivalent of section 168A of the Companies Ordinance which provides a remedy for shareholders who have been unfairly prejudiced by the conduct of a company’s affairs. See ‘‘Summary of the Constitution of Our Company and Cayman Islands Companies Law’’ in Appendix V to this prospectus.

The Controlling Shareholders may take actions that are not in, or may conflict with, public Shareholders’ best interests

The Controlling Shareholders will control the exercise of voting rights of 75% of the Shares eligible to vote in the general meeting of our Company immediately after the completion of the Global Offering and the Capitalization Issue (assuming the Over-allotment Option is not exercised). Therefore, the Controlling Shareholders will continue to be able to exercise controlling influence over our business through their ability to control actions which do not require the approval of independent shareholders. The Controlling Shareholders will also be able to control the election of our Directors, determine the timing and amount of our dividends, if any, and pass resolutions to acquire or merge with another company not connected with the Controlling Shareholders. The Controlling Shareholders may cause us to take actions that are not in, or may conflict with, the interests of us or the public shareholders. In the case where the interests of the Controlling Shareholders conflict with those of our other shareholders, or if the Controlling Shareholders choose to cause us to pursue objectives that would conflict with the interests of our other shareholders, such other shareholders could be left in a disadvantageous position by such actions caused by the Controlling Shareholders.

Certain facts, forecasts and other statistics with respect to China, the PRC economy and the sportswear industry in this prospectus are derived from various official sources and may not be reliable

Certain facts, forecasts and other statistics in this prospectus relating to China, the PRC economy and the sportswear industry have been derived from official publications generally believed to be reliable. Our Directors have taken reasonable care in the reproduction of such information. However, we cannot guarantee the quality or reliability of such source materials. They have not been prepared or independently verified by us, the Sponsor, the Global Coordinator, the Underwriters or any of our or their respective

—38— RISK FACTORS affiliates or advisors and, therefore, we make no representation as to the accuracy of such facts, forecasts and statistics, which may not be consistent with other information compiled within or outside China. Due to possibly flawed or ineffective collection methods or discrepancies between published information and market practice and other problems, such statistics may be inaccurate or may not be comparable to statistics produced for other economies and should not be unduly relied upon. Further, there is no assurance that they are stated or compiled on the same basis or with the same degree of accuracy as may be the case elsewhere. Nonetheless, our Directors have taken reasonable care in compiling and reproducing these facts, forecasts and statistics in this prospectus from our respective official sources.

In all cases, you should give consideration as to how much weight or importance you should attach to or place on such facts, forecasts or statistics and should not place undue reliance on any of such information and statistics.

Forward-looking information contained in this prospectus may prove inaccurate

This prospectus contains certain statements that are ‘‘forward-looking’’ and uses forward-looking terminology such as ‘‘anticipate’’, ‘‘believe’’, ‘‘expect’’, ‘‘estimate’’, ‘‘may’’, ‘‘ought to’’, ‘‘should’’ and ‘‘will’’. Those statements include, among other things, the discussion of our growth strategy and the expectations of our future operations, liquidity and capital resources. Purchasers and subscribers of our Shares are cautioned that reliance on any forward-looking statement involves risk and uncertainties and that, any or all of those assumptions could prove to be inaccurate and as a result, the forward-looking statements based on those assumptions could also be incorrect. The uncertainties in this regard include those identified in the risk factors discussed above. In light of these and other uncertainties, the inclusion of forward-looking statements in this prospectus should not be regarded as representations or warranties by us that our Company’s plans and objectives will be achieved and these forward-looking statements should be considered in light of various important factors, including those set forth in this section. We do not intend to update these forward-looking statements in addition to our on-going disclosure obligations pursuant to the Listing Rules or other requirements of the Stock Exchange. You should not place undue reliance on such forward-looking information.

You should read the entire prospectus carefully and we strongly caution you not to place any reliance on any information contained in press articles or other media, including, in particular, any projections, valuations or other forward-looking information

There has been press coverage in the Hong Kong Economic Times on June 12, 2007, which includes certain projections, valuations and other forward-looking information about us. We wish to emphasize to potential investors that we do not accept any responsibility for the accuracy or completeness of such press articles or other media and that such press articles or other media were not prepared or approved by us. We make no representation as to the appropriateness, accuracy, completeness or reliability of any of the projections, valuations or other forward-looking information about us, or of any assumptions underlying such projections, valuations or other forward-looking informationincludedinorreferredtobythemedia. To the extent that any such statements are inconsistent with, or conflict with, the information contained in this prospectus, we disclaim them. Accordingly, prospective investors should not rely on any such information.

—39— WAIVERS FROM COMPLIANCE WITH THE LISTING RULES

In preparation for the Listing, we have sought the following waivers from strict compliance with the relevant provisions of the Listing Rules:

I. MANAGEMENT PRESENCE

Rule 8.12 of the Listing Rules requires that a new applicant applying for a primary listing on the Stock Exchange must have a sufficient management presence in Hong Kong. This normally means that at least two of its executive Directors must be ordinarily resident in Hong Kong. Since our principal business operations and manufacturing facilities are located in China, members of our senior management are and will therefore be expected to continue to be based in China. At present, Mr. Ling Shing Ping, our company secretary and qualified accountant, is ordinarily resident in Hong Kong but none of our executive Directors are Hong Kong residents or based in Hong Kong. We have applied to the Stock Exchange for a waiver from strict compliance with the requirement under Rule 8.12.

We have received from the Stock Exchange a waiver from compliance with Rule 8.12 of the Listing Rules subject to the following conditions:

(a) We appoint two authorized representatives pursuant to Rule 3.05 of the Listing Rules who will act as our principal communication channel with the Stock Exchange and will ensure that they comply with the Listing Rules at all times. The two authorized representatives appointed are Mr. Ling Shing Ping, who is ordinarily resident in Hong Kong, and Mr. Lai Shixian, an executive Director. Each of the authorized representatives will be available to meet with the Stock Exchange in Hong Kong within a reasonable period of time upon request and will be readily contactable by telephone, facsimile or e-mail. Each of the two authorized representatives has been duly authorized to communicate on our behalf with the Stock Exchange;

(b) We appoint a compliance adviser pursuant to Rule 3A.19 of the Listing Rules who will also act as our communication channel with the Stock Exchange for a period commencing on the Listing Date and ending on the date on which we distribute the annual report for the first full financial year after the Listing Date in accordance with Rule 13.46 of the Listing Rules;

(c) Both the authorized representatives have means to contact all members of the Board (including the independent non-executive Directors) promptly at all times as and when the Stock Exchange wishes to contact the members of the Board for any matters. We will implement a policy whereby (a) each executive Director will provide his or her mobile phone number, residential phone number, fax number and e-mail address to the authorized representatives; (b) each executive Director will provide valid phone numbers or means of communication to the authorized representatives when he or she is traveling; and (c) each executive Director will provide his or her mobile phone number, residential phone number, office phone number, fax number and e-mail address to the Stock Exchange; and

(d) All executive Directors and independent non-executive Directors who are not ordinarily resident in Hong Kong have confirmed that either they possess or will apply for valid travel documents to visit Hong Kong and will be able to meet with the Stock Exchange within a reasonable period of time, when required.

—40— WAIVERS FROM COMPLIANCE WITH THE LISTING RULES

II. CONNECTED TRANSACTIONS

Members of our Group have entered into certain transactions, which would constitute non-exempt continuing connected transactions of our Company under the Listing Rules after the Listing. Our Company has received from the Stock Exchange a waiver from strict compliance with the announcement and/or independent shareholders’ approval requirements set out in Chapter 14A of the Listing Rules for such non- exempt continuing connected transactions. Further details of such non-exempt continuing connected transactions and the waiver are set out in the section headed ‘‘Connected Transactions’’ in this prospectus.

—41— INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING

DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS PROSPECTUS

This prospectus contains particulars given in compliance with the Companies Ordinance, the Securities and Futures (Stock Market Listing) Rules and the Listing Rules for the purpose of giving information to the public with regard to us. Our Directors collectively and individually accept full responsibility for the accuracy of the information contained in this prospectus and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement in this prospectus misleading.

INFORMATION ON THE GLOBAL OFFERING

The Offer Shares are offered for subscription and sale solely on the basis of the information contained and representations made in this prospectus and the Application Forms and on the terms and subject to the conditions set out herein and therein. No person is authorized to give any information in connection with the Global Offering or to make any representation not contained in this prospectus, and any information or representation not contained herein must not be relied upon as having been authorized by us, the Global Coordinator, any of the Underwriters, any of their respective directors, agents, employees or advisers or any other parties involved in the Global Offering.

UNDERWRITING

This prospectus is published solely in connection with the Hong Kong Public Offer. For applicants under the Hong Kong Public Offer, this prospectus and the Application Forms contain the terms and conditions of the Hong Kong Public Offer.

The listing of the Shares on the Stock Exchange is sponsored by Morgan Stanley. Pursuant to the Hong Kong Underwriting Agreement, the Hong Kong Public Offer is fully underwritten by the Hong Kong Underwriters. The International Underwriting Agreement is expected to be entered into on or about the Price Determination Date, subject to agreement on the Offer Price between us and the Global Coordinator (on behalf of the Underwriters). Further details about the Underwriters and the underwriting arrangements are contained in the section headed ‘‘Underwriting’’ in this prospectus.

DETERMINATION OF THE OFFER PRICE

The Offer Shares are being offered at the Offer Price which is expected to be determined by the Global Coordinator (on behalf of the Underwriters) and us on the Price Determination Date.

If we and the Global Coordinator (on behalf of the Underwriters) are unable to reach an agreement on the Offer Price on or before July 5, 2007, the Global Offering will not become unconditional and will lapse.

RESTRICTIONS ON THE USE OF THIS PROSPECTUS

No action has been taken to permit a public offering of the Offer Shares, other than in Hong Kong, or the distribution of this prospectus in any jurisdiction other than Hong Kong. Accordingly, this prospectus may not be used for the purpose of, and does not constitute, an offer or invitation in any jurisdiction or in any circumstances in which such an offer or invitation is not authorized or to any person to whom it is unlawful to make such an offer or invitation. The distribution of this prospectus and the offering and sales of the Offer Shares in other jurisdictions are subject to restrictions and may not be made except as permitted under the applicable securities laws of such jurisdictions pursuant to registration with or authorization by the relevant securities regulatory authorities or an exemption therefrom.

—42— INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING

APPLICATION FOR LISTING ON THE STOCK EXCHANGE

We have applied to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Shares in issue and to be issued pursuant to the Global Offering (including any additional Shares which may fall to be issued under the Over-allotment Option) and the Capitalization Issue and any Shares which may fall to be issued pursuant to the exercise of the options granted under the Pre-IPO Share Option Scheme or which may be granted under the Share Option Scheme. Save as disclosed in this prospectus, no part of our Share or loan capital is listed on or dealt in on any other stock exchange. At present, we are not seeking or proposing to seek such listing of, or permission to deal in, our Shares or loan capital on any other stock exchange.

HONG KONG BRANCH REGISTER AND STAMP DUTY

All of the Shares issued and sold pursuant to applications made in the Hong Kong Public Offer and the International Placing will be registered on our branch register of members to be maintained in Hong Kong. We will maintain our principal register of members at our head office in the Cayman Islands.

Dealings in the Shares registered in our Hong Kong branch register will be subject to stamp duty in Hong Kong.

Unless we determine otherwise, dividends payable in Hong Kong dollars in respect of Shares will be paid to the shareholders listed on our Hong Kong share register, by ordinary post, at the shareholders’ risk, to the registered address of each shareholder.

SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS

Subject to the granting of listing of, and permission to deal in, the Shares on the Stock Exchange and our compliance with the stock admission requirements of HKSCC, the Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of commencement of dealings in the Shares on the Stock Exchange or any other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange is required to take place in CCASS on the second business day after any trading day. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. All necessary arrangements have been made for the Shares to be admitted into CCASS.

PROFESSIONAL TAX ADVICE RECOMMENDED

Applicants for the Offer Shares should consult their professional advisers if they are in any doubt as to the taxation implications of subscribing for, purchasing, holding, disposing of and dealing in the Shares. It is emphasized that none of us, the Sponsor, the Global Coordinator, the Underwriters, any of our and their respective directors, agents or advisers or any other person involved in the Global Offering accepts responsibility for any tax effects or liabilities of holders of the Shares resulting from the subscription, purchase, holding or disposal of the Shares.

OVER-ALLOTMENT AND STABILIZATION

Stabilization is a practice used by underwriters in some markets to facilitate the distribution of securities. To stabilize, the underwriters may bid for, or purchase, the newly issued securities in the secondary market, during a specified period of time, to retard and, if possible, prevent a decline in the initial public market price of the securities below the offer price. Such transactions may be effected in all

—43— INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING jurisdictions where it is permissible to do so, in each case in compliance with all applicable laws and regulatory requirements including those of Hong Kong. In Hong Kong, the stabilization price will not exceed the initial public offer price.

In connection with the Global Offering, Morgan Stanley, its affiliates or any person acting for it, as stabilizing manager, on behalf of the Underwriters, may over-allocate Shares or effect transactions with a view to stabilizing or supporting the market price of our Shares at a level higher than that which might otherwise prevail for a limited period after the Listing Date. However, there is no obligation on Morgan Stanley, its affiliates or any persons acting for it, to conduct any such stabilizing action. Such stabilization action, if commenced, may be discontinued at any time, and is required to be brought to an end after a limited period. Should stabilizing transactions be effected in connection with the Global Offering, this will be at the absolute discretion of Morgan Stanley, its affiliates or any person acting for it. The number of Shares over-allocated will not be greater than the maximum number of Shares which may be issued upon exercise of the Over-allotment Option, being 90,000,000 Shares, which is 15% of the shares initially available under the Global Offering.

Stabilization action permitted in Hong Kong pursuant to the Securities and Futures (Price Stabilizing) Rules, as amended, includes (i) over-allocating for the purpose of preventing or minimizing any reduction in the market price of the Shares, (ii) selling or agreeing to sell the Shares so as to establish a short position in them for the purpose of preventing or minimizing any reduction in the market price of the Shares, (iii) purchasing or subscribing for, or agreeing to purchase or subscribe for, the Shares pursuant to the Over- allotment Option in order to close out any position established under (i) or (ii) above, (iv) purchasing, or agreeing to purchase, any of the Shares for the sole purpose of preventing or minimizing any reduction in the market price of the Shares, (v) selling or agreeing to sell any Shares in order to liquidate any position established as a result of those purchases and (vi) offering or attempting to do anything as described in (ii), (iii), (iv) or (v).

Specifically, prospective applicants for and investors in the Offer Shares should note that:

. Morgan Stanley, its affiliates or any person acting for it, may, in connection with the stabilizing action, maintain a long position in the Shares;

. there is no certainty regarding the extent to which and the time or period for which Morgan Stanley, its affiliates or any person acting for it, will maintain such a long position;

. liquidation of any such long position by Morgan Stanley, its affiliates or any person acting for it, may have an adverse impact on the market price of the Shares;

. no stabilizing action can be taken to support the price of the Shares for longer than the stabilizing period which will begin on the Listing Date, and is expected to expire on July 29, 2007, being the 30th day after the last date for lodging applications under the Hong Kong Public Offer. After this date, when no further stabilizing action may be taken, demand for the Shares, and therefore the price of our Shares, could fall;

. the price of the Shares cannot be assured to stay at or above the Offer Price by the taking of any stabilizing action; and

. stabilizing bids may be made or transactions effected in the course of the stabilizing action at any price at or below the Offer Price, which means that stabilizing bids may be made or transactions effected at a price below the price paid by applicants for, or investors in, the Shares.

—44— INFORMATION ABOUT THIS PROSPECTUS AND THE GLOBAL OFFERING

For the purpose of covering any over-allocations, Morgan Stanley & Co. International plc (‘‘MSIL’’) an affiliate of Morgan Stanley may borrow from Anta International up to 90,000,000 Shares, equivalent to the maximum number of Shares to be issued on a full exercise of the Over-allotment Option, under the Stock Borrowing Agreement expected to be entered into between MSIL and Anta International on or about June 30, 2007. The loan of Shares by Anta International pursuant to the Stock Borrowing Agreement shall not be subject to the restrictions under Rule 10.07(1)(a) of the Listing Rules, which restricts the disposal of Shares by the Controlling Shareholders subsequent to the date of this prospectus, subject to compliance with the following requirements in accordance with the requirements of Rule 10.07(3) of the Listing Rules:

(i) the Stock Borrowing Agreement will be for the sole purpose of covering any short position prior to the exercise of the Over-allotment Option in connection with the International Placing;

(ii) the maximum number of Shares which may be borrowed from Anta International must not exceed the maximum number of Shares which may be issued upon full exercise of the Over- allotment Option;

(iii) the same number of Shares so borrowed must be returned to Anta International or its nominees, as the case may be, on or before the third Business Day following the earlier of (a) the last day for exercising the Over-allotment Option, and (b) the date on which the Over-allotment Option is exercised in full;

(iv) the borrowing of Shares pursuant to the stock borrowing arrangement will be effected in compliance with all applicable Listing Rules, laws and other regulatory requirements; and

(v) no payments will be made to Anta International by MSIL in relation to such Stock Borrowing Agreement.

PROCEDURE FOR APPLICATION FOR HONG KONG OFFER SHARES

The procedure for applying for the Hong Kong Offer Shares is set out in the section headed ‘‘How to Apply for the Hong Kong Offer Shares’’ in this prospectus and on the relevant Application Forms.

STRUCTURE OF THE GLOBAL OFFERING

Details of the structure of the Global Offering, including its conditions, are set out in the section headed ‘‘Structure and Conditions of the Global Offering’’.

—45— DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING

DIRECTORS

Name Address Nationality

Executive Directors

Ding Shizhong Room 803, Julong Court Chinese (alias Ding Zhizhong) No. 231, Tianan North Road Fengze Area, Quanzhou City Fujian, PRC

Ding Shijia Room 804, Julong Court Chinese (alias Ding Kongjun) No. 231, Tianan North Road Fengze Area, Quanzhou City Fujian, PRC

Lai Shixian Luzhoujiayuan, Puzhao Chinese Qingyang Town, Jinjiang City Fujian, PRC

Wang Wenmo No. 72, East 2 Area Chinese Shatang Village Luoshan Town, Jinjiang City Fujian, PRC

Wu Yonghua Room 5201, 2nd Building Chinese No. 188 Jiangbin Middle Road Street Taijiang Area, Fuzhou City Fujian, PRC

Independent non-executive Directors

Yeung Chi Tat Room D, 27/F, B1 Chinese Chelsea Court Tower West TsuenWan,HongKong

Wong Ying Kuen, Paul 35E, Tower 3, Nob Hill Chinese Lai Chi Kok Kowloon, Hong Kong

Lu Hong Te 5th Floor, No. 6 Taiwanese Alley 3, Lane 387 Sec. 1, Nei Hu Road Nei Hu District Taipei City, Taiwan

—46— DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING

PARTIES INVOLVED IN THE GLOBAL OFFERING

Global Coordinator, Bookrunner, Sponsor Morgan Stanley Asia Limited and Lead Manager 30/F, Three Exchange Square Central Hong Kong

Legal advisers to our Company As to Hong Kong and United States law: Coudert Brothers in association with Orrick, Herrington & Sutcliffe LLP 39th Floor, Gloucester Tower The Landmark 15 Queen’s Road Central Hong Kong

As to PRC law: Commerce & Finance Law Offices 6F NCI Tower, A12 Jianguomenwai Avenue, Chaoyang District Beijing 100022, PRC

As to Cayman Islands law: Conyers Dill & Pearman Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Legal advisors to the Sponsor and the As to Hong Kong and United States law: Underwriters Herbert Smith 23rd Floor, Gloucester Tower 15 Queen’s Road Central Hong Kong

As to PRC law: Jun He Law Offices Shenzhen Development Bank Tower Suite 20-C Shenzhen 518001 PRC

Auditors and reporting accountants KPMG Certified Public Accountants 8th Floor, Prince’s Building 10 Chater Road Central, Hong Kong

—47— DIRECTORS AND PARTIES INVOLVED IN THE GLOBAL OFFERING

Property valuer CB Richard Ellis Limited 34th Floor, Central Plaza 18 Harbour Road, Wanchai Hong Kong

Receiving banker Bank of China (Hong Kong) Limited 1GardenRoad Hong Kong

Industrial and Commercial Bank of China (Asia) Limited 33/F., ICBC Tower 3GardenRoad Central Hong Kong

—48— CORPORATE INFORMATION

Registered office Cricket Square Hutchins Drive P.O. Box 2681 GrandCaymanKY1-1111 Cayman Islands

Head office in the PRC Dongshan Industrial Zone Chidian Town Jinjiang City Fujian Province 362212, PRC

Principal place of business in Hong Kong Unit No. 4408 44th Floor, COSCO Tower 183 Queen’s Road Central Hong Kong

Company’s website www.anta.com (information contained in this website does not form part of the prospectus)

Qualified accountant Ling Shing Ping FCPA FCCA

Company secretary Ling Shing Ping FCPA FCCA

Authorized representatives Lai Shixian Luzhoujiayuan, Puzhao Qingyang Town, Jinjiang City Fujian, PRC

Ling Shing Ping Room F, Floor 29, Block 1 SanPoKongPlaza 33 Shung Ling Street Kowloon Hong Kong

Audit committee Yeung Chi Tat (Chairman) Wong Ying Kuen, Paul Lu Hong Te

Nomination committee Lu Hong Te (Chairman) Yeung Chi Tat Lai Shixian

Remuneration committee Ding Shizhong (Chairman) Lu Hong Te Wong Ying Kuen, Paul

—49— CORPORATE INFORMATION

Compliance adviser Goldbond Capital (Asia) Limited 3902B, 39/F, Tower 1 Lippo Centre 89 Queensway Hong Kong

Principal bankers Agricultural Bank of China Quanzhou Operation Department Agricultural Bank Mansion Quan Xiu Road, Quanzhou Fujian 362000, PRC

Industrial and Commercial Bank of China Jinjiang Sub-branch Chongde Road, Qingyang Jinjiang, Fujian 362200, PRC

Cayman Islands principal share registrar Butterfield Fund Services (Cayman) Limited and transfer office Butterfield House 68 Fort Street P.O. Box 705 GrandCaymanKY1-1107 Cayman Islands

Hong Kong branch share registrar Computershare Hong Kong Investor Services Limited and transfer office Shops 1712–1716, 17th Floor, Hopewell Centre 183 Queen’s Road East, Wanchai, Hong Kong

—50— INDUSTRY OVERVIEW

This section contains information and statistics relating to the Chinese economy and the industry in which we operate. We have derived such information and data partly from publicly available government official sources which have not been independently verified by us, the Sponsor, Global Coordinator, the Underwriters or any of their respective affiliates or advisors. Our Directors have taken reasonable care in the reproduction of such information. The information in such government official sources may not be consistent with the information compiled within or outside China. We make no representation as to the correctness or accuracy of such information and accordingly such information should not be unduly relied on. We have taken such care as we consider reasonable in the reproduction and extraction of such information.

RAPID ECONOMIC GROWTH AND URBANIZATION

The PRC economy has expanded rapidly since the ‘‘open door’’ market liberalization policies initiated by the Chinese government in the late 1970s. Economic growth was further spurred by the launch of special economic zones along coastal China in the early 1990s. From 1995 to 2005, the China Statistical Yearbook 2006 states that China’s nominal gross domestic product (‘‘GDP’’) grew at a CAGR of approximately 11.7% per annum. According to Economist Intelligence Unit, economic expansion in China is expected to remain strong in the coming two years. The chart below illustrates the growth in GDP and GDP per capita in China from1995to2005.

GDP and GDP per capita from 1995 to 2005

GDP (RMB in billion) GDP per capita (RMB) 20,000 20,000 18,308 18,000 18,000 15,988 16,000 16,000

14,000 13,582 14,000 12,033 12,000 10,966 12,000 9,921 10,000 8,968 10,000 8,440 7,897 8,000 7,118 8,000 6,079 6,000 6,000

4,000 4,000

2,000 2,000

0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

GDP GDP per capita

Source: China Statistical Yearbook (2006)

—51— INDUSTRY OVERVIEW

Urbanization has accelerated in the PRC as a result of the country’s rapid economic growth. Populations in urban cities have swelled with the influx of people from rural and less developed areas. In the decade between 1995 and 2005, the total urban population in the PRC increased by 210 million or approximately 59.7%. In 2005, the total urban population was 562 million and accounted for approximately 43.0% of the total population. The chart below shows the growth of the urban population in China from 1995 to 2005.

Absolute and Relative Growth of Urban Population in China

Millions % 600 50 562 550 543 524 40 502 500 481 30 459 450 437

416 20 400 394 373 352 10 350

300 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Urban Population in China % of Total Population

Source: China Statistical Yearbook (2006)

Income levels of urban households have also increased since 1995. The chart below illustrates the per capita annual disposable income of urban households in China from 1995 to 2005.

Per capita Annual Disposable Income of Urban Households in China from 1995 to 2005

RMB % 12,000 25 10,493 10,000 9,422 20 8,472 8,000 7,703 6,860 15 6,280 6,000 5,854 5,160 5,425 4,839 4,283 10 4,000

5 2,000

0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Annual Disposable Income Growth Rate

Source: China Statistical Yearbook (2006)

—52— INDUSTRY OVERVIEW

STRONG RETAIL GROWTH AND CHANGING CONSUMPTION PATTERNS

From 1995 to 2005, retail sales of consumer goods in the PRC have experienced faster growth than GDP growth. The growing consumption power of urban consumers is a driver of the development of the retail industry in the PRC. Consumer spending, as measured by total retail sales value has grown by a CAGR of approximately 12.5% per annum from 1995 to 2005.

Retail Sales Value and Growth Rate in China

RMB in billion % 8,000 30

7,000 6,718 25 5,950 6,000 5,252 20 5,000 4,814 4,306 4,000 15 3,415 3,113 2,915 3,000 2,730 2,477 10 2,062 2,000 5 1,000

0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Retail Sales Value Growth Rate Source: China Statistical Yearbooks (1999, 2002 and 2006)

The growth in retail sales in China is not just limited to the major cities. While first-tier cities (namely Beijing, Shanghai, Guangzhou and Shenzhen) have experienced rapid growth since 1995, certain second- tier cities have also seen substantial growth in per capita income, and are increasingly important markets for retailers. As the charts below show, certain tier two cities have recorded higher growth in annual per capita income in recent years versus the tier one cities.

Growth of China’s First Tier Cities

Growth in Annual Per capita Income 40%

35%

30%

25%

20%

15%

10%

0% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Guangzhou Beijing Shanghai Shenzhen

Source: CEIC1 1 According to CEIC’s website (www.ceicdata.com), CEIC Data Company Ltd (‘‘CEIC’’) founded in 1992, and provides its clients with a number of databases with economic, country and sector information on a subscription basis. CEIC has on-site analysts in over 22 countries.

—53— INDUSTRY OVERVIEW

Growth of China’s Second Tier Cities

Growth in Annual Per capita Income

40% 35% 30% 25% 20% 15% 10% 5% 0% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Nanjing Nanchang Hohhot Hangzhou

Source: CEIC

Consumption patterns in China have changed over time. Whereas in the 1980s and 1990s income was primarily spent on basic necessities, in recent years consumer spending has been increasingly directed towards lifestyle-enhancing products and services, such as leisure, sports, entertainment, apparel and footwear.

From 2000 to 2005, the annual apparel and footwear consumption per urban household in China increased by approximately 60.0%, which represents a CAGR of approximately 9.8%, as illustrated in the chart below.

Annual Apparel and Footwear Consumption per Urban Household

RMB % 1,000 25

801 800 20 687 638 591 600 15 534 500

400 10

200 5

0 0 2000 2001 2002 2003 2004 2005

Annual Apparel and Footwear Growth Rate Consumption per Urban Household

Source: China Statistical Yearbooks (2002–2006)

—54— INDUSTRY OVERVIEW

THE PRC FOOTWEAR INDUSTRY

According to SATRA Technology Center1, in 2004 China was the largest shoe consumption market by volume in the world, accounting for approximately 21.2% of the world’s consumption. China was also the leader of footwear production, accounting for approximately 61.1% of the global production of footwear in 2004. According to the figures provided by Euromonitor International2, China’s footwear market has experienced stable growth over the past few years. Between 2000 and 2004, footwear consumption values have grown steadily at a CAGR of approximately 7.5%, and are projected by Euromonitor to continue growingatasimilarpacefrom2005to2009.

Historical and Forecast Retail Sales of Footwear in China

RMB in billion % 250 12% 212

191 10% 200 175

161 8% 148 150 137 129 120 6% 110 103 100 4%

50 2%

0 0% 2000 2001 2002 2003 2004 2005E 2006E 2007E 2008E 2009E

Footwear Retail Sales Growth Rate

Source: Euromonitor International (August 2005)

However, the Chinese footwear market remains relatively under-developed when compared to developed countries. According to SATRA Technology Center, average shoe consumption per capita in China in 2004 was only 2.3 pairs per year, which is low when compared with developed Western and Asian countries, as shown in the chart below.

1 According to SATRA Technology Center’s website (www.satra.co.uk) SATRA Technology Center was founded in 1919 by a group of industrialists and continues to be a non-profit organization. SATRA offers a wide range of testing, research, training and consultancy services to members and clients. SATRA operates from testing and research facilities on two sites in Kettering, Northamptonshire, United Kingdom. SATRA employs more than 180 staff, including consumer product technologists and scientists. SATRA has more than 1,500 member companies in 70 countries. 2 According to Euromonitor International’s website (www.euromonitor.com) Euromonitor International is an independent provider of business intelligence on industries, countries and consumers. Founded in 1972, Euromonitor International is a privately owned company with offices in London, Chicago, Singapore, Shanghai and Vilnius. Euromonitor International has a team of over 600 in- country analysts worldwide, giving it the capability to deliver business information.

—55— INDUSTRY OVERVIEW

2004 Per Capita Footwear Consumption of Selected Countries

Per capita (pairs/year) 8 7.3

6.3 6 5.8

4.8 4.2 4 3.9

2.3 2

0 USA UK France Japan Germany S. Korea China

Source: SATRA Technology Center (2006)

THE PRC BRANDED SPORTSWEAR INDUSTRY

The PRC sportswear market, which includes footwear, apparel and accessories, has expanded rapidly in recent years. Major factors contributing to the growth of the PRC sportswear market are the overall growth of GDP, rising income levels, increasing distribution channel penetration and shifting consumption patterns of increasingly affluent urban consumers.

China’s General Administration of Sport ( ), a PRC government sports body, has published data that generally shows that increasing income levels of consumers have contributed to the increasing level of participation in sports in China. The table below illustrates the general correlation between disposable income and sports participation in China.

Correlation between disposable income and sports participation in China

Disposable income 901– Above (in RMB) Average 201–300 301–400 401–500 501–600 601–700 701–800 801–900 1,000 1,000

Participate(%).... 33.3 38.6 37.2 39.3 32.8 53.3 58.0 43.2 58.6 66.7 Not participate (%) . 66.7 61.4 62.8 60.7 67.2 46.7 42.0 56.8 41.4 33.3

Source: China’s General Administration of Sport (November 2004)

We believe that the rising popularity of sports and an increasing trend towards health and fashion will drive demand for sportswear products in the PRC. According to the China National Commercial Information Center and Li & Fung Research Center, international and domestic sportswear brands targeting mid- to high-end consumers will continue to perform well in urban cities.

There is also a growing culture of grass roots participation in sporting activities. The China Bureau of Statistics recorded a strong increase in the number of sport meets at County level, from 24,880 in 1995 to 45,401 in 2005.

—56— INDUSTRY OVERVIEW

AccordingtoZOUMarketing1, China’s sportswear market has experienced double-digit growth since 2000, with the 2005 sportswear market size at approximately RMB25 billion (US$3.2 billion). The sportswear market is expected to almost double in size by 2008 to RMB46 billion (US$6.0 billion), representing a forecast CAGR of 22.6%. ZOU Marketing estimates that for 2005, Nike, adidas, Li Ning, ANTA and Reebok accounted for approximately 40.0% of the market share in China’s sportswear market in terms of sales revenue. The rest of the market is quite fragmented, and is shared by other premium brands and lower-end competitors. The estimated market share breakdown for 2005 is illustrated in the chart below.

China’s Sportswear Market Estimated 2005 Market Share by Annual Sales Revenue (%)2

Source: ZOU Marketing

The top sportswear brands have achieved high growth rates in China. Zou Marketing believes that in the coming years to 2010, these leading brands will continue to gain market share at the expense of less established, lower-end brands. According to a report on China’s sportswear market published by CCID Consulting3 in 2005, the leading brands such as Nike, adidas, Li Ning and ANTA are likely to reach a combined market share of 75.0% in the near future.

The barriers to entry in the China branded sportswear market are high, due to the cost and time required to build brand awareness and establish an effective distribution network. The top global sportswear companies mainly rely on local distributors to distribute their products to consumers through branded retail outlets in department stores or specialty stores in China. In selecting their local partners, they often take into account factors including national distribution channels, strong sales force, experienced retail management team, and sufficient resources to support rapid expansion.

Industry observers expect that the upcoming 2008 Olympic Games in Beijing will likely raise public awareness and interest in sports and fitness, stimulating demand for sporting goods. The Beijing Olympics is also expected to significantly enhance the recognition of major sportswear brands in the PRC.

1 According to ZOU Marketing’s website (www.zoumarketing.com) ZOU Marketing is a Shanghai-based sports marketing and consulting firm that conducts market research and provides advisory services on the PRC sports industry. With offices in Shanghai, Beijing, Guangzhou and Hong Kong, ZOU Marketing provides sports branding and marketing services. 2 Market share data calculate based on estimated 2005 PRC sales revenue of respective companies and estimated total market size. 3 According to CCID Consulting’s website (www.ccidconsulting.com) CCID Consulting was first founded in 1986. CCID Consulting was listed in Hong Kong on the Growth Enterprise Market on December 12, 2002. The company provides consulting and advisory services in fields ranging from provision of professional information data, industry planning, marketing, to actual implementation. CCID Consulting employs over 300 professional researchers and consultants.

—57— HISTORY AND CORPORATE STRUCTURE

HISTORY AND DEVELOPMENT

Our Group was founded in 1994 by Mr. Ding Siren, who is the father-in-law of our executive Director Mr. Ding Shizhong. He incorporated ANTA Fujian and ANTA China in 1994 and 2000, respectively, under his trade name (On Tap Enterprise Co.*), which he used in carrying out business in Hong Kong as a sole proprietor to manufacture and sell sports footwear in the PRC. ANTA Fujian and ANTA China had a registered capital of HK$5 million (equivalent to approximately RMB4.9 million) and HK$35 million (equivalent to approximately RMB34.3 million), respectively, at the time of their incorporation. In 2000 and 2002 respectively, Mr. Ding Siren under his trade name (On Tap Enterprise Co.*) contributed HK$5 million (equivalent to approximately RMB4.9 million) and HK$10 million (equivalent to approximately RMB9.8 million) to the registered capital of ANTA Fujian. Commerce & Finance Law Offices, the PRC legal adviser of our Company, has confirmed that according to the then applicable PRC laws and regulations, a foreign company, enterprise, entity or individual may be the shareholder of a foreign invested company. Mr. Ding Siren is a permanent resident of Hong Kong and (On Tap Enterprise Co.*) is registered in Hong Kong. Accordingly, our PRC legal adviser, Commerce & Finance Law Offices, confirmed that the incorporation of ANTA China as a wholly foreign-owned enterprise was legal and valid under the then applicable PRC laws and regulations.

In April 2002, Jinjiang Shifa became a shareholder of ANTA Fujian by contributing RMB30 million worth of manufacturing equipment and related assets and thereafter, it held a 60% equity interest in ANTA Fujian and Mr. Ding Siren held the remaining 40% equity interest under his trade name (On Tap Enterprise Co.*). When it became the shareholder of ANTA Fujian, Jinjiang Shifa’s equity interests were held as to 60% by Mr. Ding Hemu (father of Mr. Ding Shizhong), 10% by Mr. Ding Shizhong, 10% by Mr. Ding Shijia (brother of Mr. Ding Shizhong and an executive Director), 10% by Ms. Ding Youmian (spouse of Mr. Ding Shizhong) and 10% by Ms. Ding Liming (spouse of Mr. Ding Shijia). On May 1, 2002, Mr. Ding Siren executed an agreement to assign his beneficial interests in ANTA Fujian and ANTA China to Mr. Ding Shizhong at nil consideration and agreed to continue to hold such interests in both ANTA Fujian and ANTA China on trust for Mr. Ding Shizhong. On the same date, all shareholders of Jinjiang Shifa executed an agreement to assign their beneficial interests in Jinjiang Shifa to Mr. Ding Shizhong at nil consideration and agreed to continue to hold such interests in Jinjiang Shifa on trust for Mr. Ding Shizhong. Commerce & Finance Law Offices, our PRC legal adviser, has confirmed that the agreements executed by Mr. Ding Siren and the shareholders of Jinjiang Shifa were legal and valid under PRC laws and regulations. As a result, Mr. Ding Shizhong became the sole beneficial owner of both ANTA Fujian and ANTA China. In the same year, ANTA China acquired the land at Jinjiang, Fujian to construct our Jinjiang footwear production facility.

To commence sales of our accessory products, in August 2002, ANTA Jinjiang was incorporated by Mr.WangWenmo(cousinofMr.DingShizhongandanexecutive Director), Ms. Ding Yali (sister of Mr. Ding Shizhong) and Ms. Ding Youmian (spouse of Mr. Ding Shizhong), and by an agreement dated July 1, 2002, each of the above individuals agreed to act as trustees and to hold their respective equity interests in ANTA Jinjiang on trust for Mr. Ding Shizhong. The trust agreement dated July 1, 2002 was entered into when the parties had decided to establish ANTA Jinjiang and the business license of ANTA Jinjiang was subsequently issued in around August 2002. The time difference was a result of the administrative processes required for the establishment and issue of the business license for ANTA Jinjiang. Commerce & Finance Law Offices, the PRC legal adviser of our Company, has confirmed that the agreement executed by Mr. Wang Wenmo, Ms. Ding Yali and Ms. Ding Youmian was legal and valid under PRC laws and regulations.

In November 2002 and July 2003, Mr. Ding Shizhong, under his trade name (Anda International Trade Investment Co.*), which he used in carrying out business in Hong Kong as a sole proprietor, contributed HK$50 million and HK$10 million, respectively, to the registered capital of ANTA China, which was increased to HK$95 million. As a result, the registered shareholders of ANTA China were

—58— HISTORY AND CORPORATE STRUCTURE

Mr. Ding Siren, under his trade name (On Tap Enterprise Co.*), as to 36.8% and Mr. Ding Shizhong, under his trade name (Anda International Trade Investment Co.*), as to 63.2%.

On December 1, 2002, by an agreement executed by Mr. Ding Shizhong, Mr. Ding Shijia, Mr. Ding Hemu, Ms. Ding Yali, Mr. Wang Wenmo and Mr. Ke Yufa, Mr. Ding Shizhong divided his equity interests in each of ANTA Fujian, ANTA China and ANTA Jinjiang such that the beneficial interests were held by Mr. Ding Shizhong as to 39.5%, Mr. Ding Shijia as to 34%, Mr. Ding Hemu as to 7%, Ms. Ding Yali as to 9.75%, Mr. Wang Wenmo as to 9.5% and Mr. Ke Yufa as to 0.25%. Mr. Ding Shizhong executed this agreement to assign the designated percentage of his beneficial interests in each of ANTA Fujian, ANTA China and ANTA Jinjiang to the other Controlling Shareholders in order to divide the relevant interests among his family members and in consideration of their contributions to the development of our Group. No monetary consideration was paid for such assignments. Commerce & Finance Law Offices, our PRC legal adviser, has confirmed that such agreement was legal and valid under PRC laws and regulations.

On December 1, 2003, by an agreement executed by each of the Controlling Shareholders, their percentages of beneficial interests in ANTA Fujian, ANTA China and ANTA Jinjiang were changed to Mr. Ding Shizhong as to 34.5%, Mr. Ding Shijia as to 34%, Mr. Ding Hemu as to 7%, Ms. Ding Yali as to 9.75%, Mr. Wang Wenmo as to 9.5%, Mr. Wu Yonghua as to 5% and Mr. Ke Yufa as to 0.25%. This agreement was executed by the Controlling Shareholders and provided for the assignment by Mr. Ding Shizhong of his 5% beneficial interest in each of ANTA Fujian, ANTA China and ANTA Jinjiang to Mr. Wu Yonghua in consideration of his joining our Group and no monetary consideration was paid for such assignment. Commerce & Finance Law Offices, our PRC legal adviser, has confirmed that such agreement was legal and valid under PRC laws and regulations.

On March 15, 2005, Anda Hong Kong contributed HK$50 million to the registered capital of ANTA China, which was increased to HK$145 million. After the contribution by Anda Hong Kong, the registered shareholders of ANTA China were Mr. Ding Siren, under his trade name (On Tap Enterprise Co.*) as to 24.1%, Mr. Ding Shizhong, under his trade name (Anda International Trade Investment Co.*) as to 41.4% and Anda Hong Kong as to 34.5%. At the time, Mr. Ding Shizhong was the sole registered shareholder of Anda Hong Kong but beneficially owned a 34.5% equity interest only and held the remaining equity interest of Anda Hong Kong on trust for Mr. Ding Shijia as to 34%, Mr. Ding Hemu as to 7%, Ms. Ding Yali as to 9.75%, Mr. Wang Wenmo as to 9.5%, Mr. Wu Yonghua as to 5% and Mr.KeYufaasto0.25%.Commerce&FinanceLawOffices, our PRC legal adviser, has confirmed that such trust arrangement did not violate any law or regulation of the PRC.

On August 16, 2005, Anda Hong Kong acquired all the interests in ANTA China from Mr. Ding Siren and Mr. Ding Shizhong, who then held such interests on behalf of the Controlling Shareholders, for a consideration of HK$35 million and HK$60 million, respectively. In each case, the consideration was calculated based on their respective percentage of equity interests in the registered capital of ANTA China. As a result, Anda Hong Kong became the sole shareholder of ANTA China. In the same year, Anda Hong Kong contributed a further HK$100 million to the registered capital of ANTA China as a result of which the registered capital of ANTA China increased to HK$245 million.

To commence our apparel production, ANTA Changting and ANTA Xiamen were both incorporated by Anda Hong Kong in 2006 to construct and operate our apparel production facilities. ANTA Changting commenced its apparel production in the second quarter of 2007. ANTA Xiamen is expected to commence its apparel production in the third quarter of 2007.

—59— HISTORY AND CORPORATE STRUCTURE

To leverage our strong sales and marketing resources and our experience in the sportswear market in the PRC, we expanded our business operation into the PRC sportswear retail business in 2007. In 2006, ANTA China, through its wholly-owned subsidiary, Xiamen Investment, established Shanghai Fengxian to engage in the sportswear retail business selling adidas, Reebok and Kappa branded products. Shanghai Fengxian further established Beijing Fengxian, Guangzhou Fengxian, Harbin Fengxian, Suzhou Fengxian and Xiamen Fengxian in 2006 and 2007 to operate and manage our retail outlets in different cities across China. Please refer to the paragraph headed ‘‘Retail Business’’ in the ‘‘Business’’ section of this prospectus for further details of our retail business.

In preparation for the Listing, we underwent the Corporate Reorganization, details of which are set out below.

CORPORATE REORGANIZATION OF OUR GROUP

In contemplation of the Listing, our Group underwent the Corporate Reorganization prior to the Listing in order to:

— acquire production facilities and trademarks from ANTA Fujian;

— acquire patents from Mr. Ding Shizhong;

— dissolve ANTA Jinjiang which formed part of our Group during the Track Record Period but no longer served any function within our Group;

— establish new entities in line with our strategies; and

— consolidate our Group’s key manufacturing entities and facilities under the ownership of our Company.

The Corporate Reorganization involved the following major steps:

Acquisition of production facilities and trademarks from ANTA Fujian

As part of our strategic plan to consolidate all existing footwear production lines in our production facilities at Jinjiang, ANTA Fujian will not form part of our Group and transferred its production facilities, including its principal manufacturing equipment and facilities, to ANTA China pursuant to an asset acquisition agreement dated July 30, 2006, for a consideration of approximately RMB3.5 million, determined based on an asset valuation conducted by an independent PRC valuer.

ANTA Fujian also transferred all trademarks registered in its name or for which it has applied for registration related to our business operations to ANTA China at nil consideration in view of the facts that the costs of registering the relevant trademarks and the promotion of the ANTA brand had been paid by us. ANTA Fujian has granted an irrevocable license to us to use such trademarks before the completion of administrative procedures for the transfers. Our Directors consider that the trademark transfer was on normal commercial terms. Please refer to the section headed ‘‘Connected Transactions’’ of this prospectus for details of the license. The transfers of someofsuchtrademarkswascompletedinJune2007.

There was no other transfer of business apart from the transfer of production facilities and trademarks from ANTA Fujian to ANTA China in July 2006 save as disclosed above.

—60— HISTORY AND CORPORATE STRUCTURE

After the asset transfer, ANTA Fujian ceased to operate its sportswear business. As at the Latest Practicable Date, other than its investment in a local newspaper made prior to the asset transfer, ANTA Fujian did not operate any other businesses. Since the transfer of operations has been treated as a reorganization of businesses under common control for accounting purposes, the production facilities and trademarks transferred from ANTA Fujian have been recognized at historical cost. Any gain or loss arising from the transfer in ANTA Fujian was eliminated on the combination of the financial results of ANTA Fujian and the other companies comprising our Group. As at the Latest Practicable Date, ANTA Fujian’s equity interests were held as to 40% by Mr. Ding Siren under his trade name (On Tap Enterprise Co.*) and as to 60% by Jinjiang Shifa.

Pursuant to the Corporate Reorganization, certain business and assets will be retained by ANTA Fujian, a predecessor entity of our Group, and had been treated as a deemed distribution by our Group upon our Company becoming the holding company of our Group on June 16, 2007.

Acquisition of patents from Mr. Ding Shizhong

As part of the Corporate Reorganization, Mr. Ding Shizhong transferred all patents registered in his name or for which he has applied for registration related to our business to ANTA China at nil consideration in view of the facts that the costs of developing the relevant technology and the applications for the patents had been paid by us. The Directors consider that the patent transfer was on normal commercial terms.

Dissolution of ANTA Jinjiang

During the Track Record Period, ANTA Jinjiang was responsible for our accessory business. ANTA Jinjiang transferred its inventories to ANTA China and ceased its business operations towards the end of the Track Record Period and was dissolved in November 2006. The transfer of operations from ANTA Jinjiang has been treated as a reorganization of businesses under common control for accounting purposes. Any gain or loss arising from such a transfer in ANTA Jinjiang has been eliminated on the combination of the financial results of ANTA Jinjiang and the other companies comprising our Group. Our accessory business is now operated by ANTA China, which is our major operating subsidiary.

Incorporation of new entities

ANTA Changting and ANTA Xiamen were incorporated by Anda Hong Kong as wholly foreign- owned enterprises in the PRC on February 20, 2006 and August 14, 2006, respectively, for the establishment of our apparel production facilities.

Keen Power was incorporated by Anta Enterprise as a limited liability company in Hong Kong on August 17, 2006 to coordinate our overseas operations in the future, including procurement of raw materials from overseas suppliers and coordination of sales of our products in overseas markets.

Xiamen Investment was incorporated by ANTA China as a limited liability company in the PRC on June 1, 2006 for the purpose of investment holding. It established Shanghai Fengxian as a limited liability company in the PRC on October 20, 2006. Shanghai Fengxian was established to engage in the sportswear retail business selling adidas, Reebok and Kappa branded products. Please refer to the paragraph headed ‘‘Retail Business’’ in the ‘‘Business’’ section of this prospectus for details of our retail business. Shanghai Fengxian further established Beijing Fengxian, Guangzhou Fengxian, Harbin Fengxian, Suzhou Fengxian and Xiamen Fengxian in 2006 and 2007 to operate and manage our retail outlets for adidas and Reebok branded products in different cities across China.

ANTA Quanzhou was incorporated by Anda Hong Kong as a wholly foreign-owned enterprise in the PRC on January 16, 2007 for the purpose of expanding our production capacity of sports footwear.

Xiamen Trading was incorporated by Motive Force as a wholly foreign-owned enterprise in the PRC on January 18, 2007 to act as the sales and trading center of our ANTA products.

—61— HISTORY AND CORPORATE STRUCTURE

Incorporation of offshore investment vehicles and our Company

To prepare for the Listing, the Controlling Shareholders incorporated three offshore investment vehicles in the BVI, namely Anta International, Anda Investments and Anda Holdings to hold their interests in our Company in August 2006. Our Company was incorporated in the Cayman Islands as the holding company of our Group on February 8, 2007.

On August 22, 2006, Anta Enterprise and Motive Sports were incorporated by Anta International, Anda Investments and Anda Holdings as investment holding companies to hold our interests in other members of our Group.

On April 4, 2007, Anta Enterprise entered into an agreement with the Controlling Shareholders to acquire the entire issued share capital of Anda Hong Kong for a nominal consideration of HK$1.0. On the same date, Anta Enterprise entered into a deed of assignment of shareholders’ loans to acquire shareholders’ loans of an aggregate amount of approximately HK$144.4 million provided by the Controlling Shareholders to Anda Hong Kong for a nominal consideration of HK$1.0.

On June 16, 2007, our Company acquired the entire issued share capital of each of Anta Enterprise and Motive Force held by Anta International, Anda Holdings and Anda Investments for a consideration satisfied by us (i) crediting as fully paid the 8,325, 975 and 700 nil paid Shares in the issued share capital of our Company held by Anta International, Anda Holdings and Anda Investments, respectively; and (ii) allotting and issuing 1,298,700, 152,100 and 109,200 Shares, respectively, to Anta International, Anda Holdings and Anda Investments. As a result of the acquisition, our Company became the holding company of our Group.

For further details on the Corporate Reorganization, please refer to the section headed ‘‘Further information about our Group’’ in Appendix VI to this prospectus.

OUR CORPORATE REORGANIZATION AND THE REGULATION ON THE MERGER AND ACQUISITION OF DOMESTIC ENTERPRISES BY FOREIGN INVESTORS

On September 8, 2006 (the ‘‘Effective Date’’), the Rules on the Acquisition of Domestic Enterprises by Foreign Investors in the PRC ( ) (the ‘‘M&A Rules’’) came into effect. Under the M&A Rules, a foreign investor is required to obtain necessary approvals when it (i) acquires the equity of a domestic enterprise so as to convert the domestic enterprise into a foreign-invested enterprise; (ii) subscribes the increased capital of a domestic enterprise so as to convert the domestic enterprise into a foreign-invested enterprise; (iii) establishes a foreign-invested enterprise through which it purchases the assets of a domestic enterprise and operates these assets; or (iv) purchases the assets of a domestic enterprise, and then invests such assets to establish a foreign-invested enterprise (the ‘‘Regulated Activities’’). In addition, if a security offering involves a reorganization that falls within the scope of the Regulated Activities, approval from the China Securities Regulatory Commission is required for the offering. According to Commerce & Finance Law Offices, our Company’s PRC legal adviser, neither ANTA China nor its shareholders have conducted any Regulated Activities after the Effective Date and none of ANTA China, ANTA Changting, ANTA Xiamen, ANTA Quanzhou, Xiamen Trading and the other subsidiaries of our Company was acquired by a foreign investor within the meaning of the M&A Rules. The M&A Rules therefore are not applicable to the above-mentioned companies and the Global Offering and the Listing do not require the approval of the China Securities Regulatory Commission.

The relevant beneficial shareholders of our Group who are PRC nationals have completed their foreign exchange registration of overseas investments at the Quanzhou Branch of SAFE. Our Company’s PRC legal adviser has confirmed that the Notice of the State Administration of Foreign Exchange on Relevant Issues concerning Foreign Exchange Administration on Domestic Residents to Engage in Financing and Return Investment via Overseas Special Purpose Companies (known as ‘‘SAFE Circular 75’’) has been complied with.

—62— HISTORY AND CORPORATE STRUCTURE

Set out below is the shareholding structure of our Group after the Corporate Reorganization and immediately prior to the Global Offering and the Capitalization Issue:

Anta International Anda Investments Anda Holdings (BVI)(1) (BVI)(2) (BVI)(3)

83.25% 7.00% 9.75%

ANTA Sports Products Limited (Cayman Islands)

100% 100% Anta Enterprise Motive Force (BVI) (BVI) (investment (investment holding) holding)

100% 100%

Keen Power Anda Hong Kong 100% (Hong Kong) (Hong Kong) (coordination (investment of overseas holding) operation)(4)

100% 100% 100% 100%

ANTA China ANTA Changting ANTA Xiamen ANTA Quanzhou Xiamen Trading (PRC) (PRC) (PRC) (PRC) (PRC) (management and (apparel (apparel (footwear (sales and footwear manufacturing) manufacturing) manufacturing) trading) manufacturing)

100% Xiamen Investment (PRC) (investment holding) 100% Shanghai Fengxian (PRC) (retail business)

100% 100% 100% 100% 100% Beijing Guangzhou Harbin Suzhou Xiamen Fengxian Fengxian Fengxian Fengxian Fengxian (PRC) (PRC) (PRC) (PRC) (PRC) (retail business) (retail business) (retail business) (retail business) (retail business)

—63— HISTORY AND CORPORATE STRUCTURE

Notes:

(1) As at the Latest Practicable Date, Anta International is indirectly owned by the following:

(a) as to 41.44% by HSBC International Trustee Limited (‘‘HSBC Trustee’’) as trustee of the DSZ Family Trust, a discretionary trust set up by Mr. Ding Shizhong for the benefit of his family members. HSBC Trustee holds the 41.44% equity interest in Anta International indirectly through Shine Well (Far East) Limited, an investment company indirectly wholly owned by HSBC Trustee. Mr. Ding Shizhong is one of our executive Directors;

(b) as to 40.84% by HSBC Trustee as trustee of the DSJ Family Trust, a discretionary trust set up by Mr. Ding Shijia for the benefit of his family members. HSBC Trustee holds the 40.84% equity interest in Anta International indirectly through Talent Trend Investment Limited, an investment company indirectly wholly owned by HSBC Trustee. Mr. Ding Shijia is one of our executive Directors and the elder brother of Mr. Ding Shizhong;

(c) as to 11.41% by HSBC Trustee as trustee of the WWM Family Trust, a discretionary trust set up by Mr. Wang Wenmo for the benefit of his family members. HSBC Trustee holds the 11.41% equity interest in Anta International indirectly through Fair Billion Development Limited, an investment company indirectly wholly owned by HSBC Trustee. Mr. Wang Wenmo is one of our executive Directors and a cousin of Mr. Ding Shizhong;

(d) as to 6.01% by HSBC Trustee as trustee of the WYH Family Trust, a discretionary trust set up by Mr. Wu Yonghua for the benefit of his family members. HSBC Trustee holds the 6.01% equity interest in Anta International indirectly through Spread Wah International Limited, an investment company indirectly wholly owned by HSBC Trustee. Mr. Wu Yonghua is one of our executive Directors; and

(e) as to 0.30% by HSBC Trustee as trustee of the KYF Family Trust, a discretionary trust set up by Mr. Ke Yufa for the benefit of his family members. HSBC Trustee holds the 0.30% equity interest in Anta International indirectly through Elegant Dragon Group Limited, an investment company indirectly wholly owned by HSBC Trustee. Mr. Ke Yufa is a member of our senior management.

(2) As at the Latest Practicable Date, Anda Investments is indirectly owned by HSBC Trustee as trustee of the DHM Family Trust, a discretionary trust set up by Mr. Ding Hemu for the benefit of his family members. Mr. Ding Hemu is the father of our executive Directors, Mr. Ding Shizhong and Mr. Ding Shijia and the father-in-law of our executive Director, Mr. Lai Shixian.

(3) As at the Latest Practicable Date, Anda Holdings is indirectly owned by HSBC Trustee as trustee of the DYL Family Trust, a discretionary trust set up by Ms. Ding Yali for the benefit of her issue. Ms. Ding Yali is the sister of our executive Directors, Mr. Ding Shizhong and Mr. Ding Shijia, and the spouse of our executive Director, Mr. Lai Shixian.

(4) Keen Power was established for overseas operations in the future including procurement of raw materials from overseas suppliers and coordination of sales of our products in overseas markets.

—64— HISTORY AND CORPORATE STRUCTURE

GROUP STRUCTURE

The following chart sets out the shareholding structure of our Group immediately after the Global Offering (assuming the Over-allotment Option is not exercised) and the Capitalization Issue:

Anta International Anda Investments Anda Holdings Public (BVI)(1) (BVI)(2) (BVI)(3)

62.44% 5.25% 7.31% 25.00%

ANTA Sports Products Limited (Cayman Islands)

100% 100% Anta Enterprise Motive Force (BVI) (BVI) (investment (investment holding) holding)

100% 100%

Keen Power Anda Hong Kong 100% (Hong Kong) (Hong Kong) (coordination (investment of overseas holding) operation)(4)

100% 100% 100% 100%

100% Xiamen Investment (PRC) (investment holding) 100% Shanghai Fengxian (PRC) (retail business)

—65— HISTORY AND CORPORATE STRUCTURE

Notes:

(1) As at the Latest Practicable Date, Anta International is indirectly owned by the following:

(4) Keen Power was established for overseas operations in the future including procurement of raw materials from overseas suppliers and coordination of sales of our products in overseas markets.

—66— BUSINESS

OVERVIEW

Pursuant to our wholesale business model, we do not sell our ANTA products directly to consumers but rely on our distributors to distribute our products to authorized ANTA retail outlets which sell our products to consumers in the PRC. We enter into annual distributorship agreements with our distributors which set out key terms, such as the geographic area within which they are authorized to sell our ANTA products, a prohibition on the sale of competing sportswear products by our distributors, credit and payment terms and annual sales and network expansion targets. We sell our products to our distributors at a discount to the suggested retail price. We believe that our wholesale business model has enabled us to increase our own sales by leveraging economies of scale from our distributorship arrangements. As at December 31, 2006, we had 35 distributors and had increased this number to 37 by March 31, 2007.

Our distributors manage local networks of authorized ANTA retail outlets, which they either directly operate themselves or appoint third party retail outlet operators to operate, subject to our approval. We do not own or operate any of these authorized ANTA retail outlets and do not enter into any contractual relationship with the third party retail outlet operators appointed by our distributors. These authorized ANTA retail outlets operate under the ANTA brand name and sell exclusively our ANTA products. We provide retail policies and guidelines as well as training to our distributors to assist them in the management of their ANTA retail networks. Our distributors directly operated and indirectly managed an aggregate of 4,108 authorized ANTA retail outlets as at December 31, 2006 and had increased this number to 4,217 as at March 31, 2007.

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OUR STRENGTHS

We believe that our competitive strengths position us well to capitalize on the increasing consumer spending power in the PRC. We believe our competitive strengths include:

Well-established and market-leading brand position

We are one of the leading branded sports footwear enterprises in the PRC and have been manufacturing and marketing sports footwear under our ANTA brand for over 13 years. We launched our sports footwear products under our ANTA brand in 1994, and we have also been offering a range of apparel and accessory products since 2002 and 2003, respectively. Our ANTA trademark as applied to our sports footwear has been recognized as one of ‘‘China’s Well-Known Trademarks’’. We have established long term sponsorship relationships with major sports leagues in the PRC including the Chinese Basketball Association, China National Volleyball League and China Table Tennis Super League and also signed endorsement arrangements with well-known athletes in the PRC which give us significant brand exposure and, we believe, increase the appeal of our products among our young target consumers. We strive to build on our market-leading brand position by offering trendy and high performance sportswear.

Extensive network of third party distributors which manage nationwide retail outlets

We sell our ANTA products to our distributors on a wholesale basis and at a discount to the suggested retail prices of our ANTA products. We had 35 distributors located throughout the PRC as at December 31, 2006 and had increased this number to 37 as at March 31, 2007. These distributors directly operated or indirectly managed a network of 4,108 authorized ANTA retail outlets in the PRC as at December 31, 2006 and had increased the number to 4,217 as at March 31, 2007, through which they sell exclusively our ANTA products to consumers in the PRC. We do not own or operate any of these authorized ANTA retail outlets and do not enter into any contractual relationship with the third party retail outlet operators appointed by our distributors. We set guidelines for our distributors in respect of the location of authorized ANTA retail outlets within their retail sales network with the aim of increasing their sales opportunities and improving recognition of the ANTA brand, and we require our distributors to obtain our approval of the final location of each authorized ANTA retail outlet. We believe that our distributors’ retail network is particularly strong in second- and third-tier cities throughout the PRC and that our extensive network of distributors and their nationwide retail networks increase the market penetration of the ANTA brand and position us well to capitalize on the increasing consumer spending power in the PRC.

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Vertically integrated business model with strong manufacturing capabilities

We believe that our vertically integrated business model is one of our core competitive strengths, which allows us to control the key stages of our operations for our ANTA products from product design, development and manufacturing to sales and marketing of our finished goods to our distributors. In 2006, we produced approximately 8.9 million pairs of footwear at our own production facilities in Jinjiang, accounting for approximately 75.4% of our total footwear production volume for the year. We seek to leverage the economies of scale resulting from our strong manufacturing capabilities to benefit from increased buying power. We consider that this integrated approach enables us to maintain a competitive cost structure, increase our management efficiency and produce large quantities of high quality goods at competitive prices.

High quality and functionality of ANTA products

Our stringent quality control procedures combined with our design and technological capabilities have significantly increased the quality of our products. Our design capabilities also enable us to bring new products with a high level of functionality to the market. In 2006, we introduced to the market approximately 500 new footwear styles, approximately 700 new apparel styles and approximately 700 new accessory styles. We have developed, and are applying for patents for, technologies used in our footwear, including air permeability and ‘‘A-Core’’ shock absorption. We undertake quality control measures at different stages of our production process from raw materials procurement to testing finished products to ensure that quality products are provided to consumers. We obtained ISO 9001 quality control certification for our footwear production processes in 2005. Our ANTA sports footwear has been recognized as ‘‘State- designated Products Exempted from Quality Surveillance Inspection’’ ( ) by the General Administration of Quality Supervision, Inspection and Quarantine of the PRC since 2003.

Strong and effective marketing and promotional capabilities

To promote our ANTA brand, we have adopted a strategy of maximizing our exposure in a variety of media, such as boosting our air-time presence through television commercials and other media and sponsoring strategically selected domestic sporting leagues, such as the Chinese Basketball Association, China National Volleyball League and China Table Tennis Super League, whose competitions are broadcast nationwide in the PRC. We believe that these marketing and promotional activities effectively raise our brand awareness and recognition, in particular among our target consumers aged between 14 and 29. These sponsorship arrangements have given us many individual athlete endorsement opportunities. We also adopt an athlete endorsement strategy which involves endorsing young promising athletes.

Experienced management team

Our executive directors and senior management team have extensive experience and professional knowledge in the PRC sportswear industry. Our chairman, Mr. Ding Shizhong, has over 13 years of experience in the sportswear industry. Our senior management has broad experience in sales and marketing, manufacturing, quality control and financial management. We believe that the depth and extensive experience of our senior management team has contributed to the successful development of our business. We have adopted the Pre-IPO Share Option Scheme and the Share Option Scheme to motivate our senior management members. In addition, four of our executive Directors will collectively be interested in over 60% of the issued share capital of our Company immediately after completion of the Global Offering. Accordingly, we believe the interests of our senior management are highly aligned with those of our shareholders and our senior management are fully incentivized to create value for our business.

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BUSINESS STRATEGIES

We aim to become the number one domestic sporting goods brand in China by leveraging our competitive strengths and by implementing the following strategies:

Enhance brand image and recognition

We believe that brand image is a key factor in our target consumers’ purchasing decisions. We will continue to build our brand image as a trendy, high quality and performance sportswear brand and bolster the association of the ANTA brand with our corporate values. We intend to increase our marketing campaigns and activities, raise our broadcast presence through television commercials, and expand our endorsement arrangements of up-and-coming athletes.

We plan to capitalize on marketing opportunities offered by the 2008 Beijing Olympics through carefully selected promotional activities. For example, we are the title sponsor of the CCTV show ‘‘ANTA CCTV Sports Personality’’ which features Chinese athletes and awards outstanding athletes annually starting from 2007 to 2009 for their outstanding performance in the year before. We seek to identify and engage in similar sponsorship opportunities. We believe that a popular and reputable brand image and the ability to offer trendy, consistently high quality and performance products are key to securing future growth in our business.

Continue to work with our distributors to expand and strengthen the ANTA sales network

We plan to work with our distributors to expand their retail networks. We also plan to selectively establish and operate ANTA flagship stores in prime commercial locations in major cities in the PRC for brand building purposes. These ANTA flagship stores will be significantly larger than existing authorized ANTA retail outlets and are intended to showcase our latest ANTA product ranges, enhance our brand profile in the local market and give us a platform to test marketing initiatives and gain direct access to consumer feedback. Based on our current expansion plan, these sales network expansion and improvement efforts will involve the following strategies:

. to set individual expansion plans for our distributors to increase the total number of authorized ANTA retail outlets throughout the PRC to approximately 4,500 by the end of 2007. The expected investment required for each authorized ANTA retail outlet is approximately RMB160,000 to RMB400,000 which will be borne by our distributors and the third party retail outlet operators;

. to open three to four ANTA flagship stores in prime commercial locations in major cities in the PRC in 2007. The expected investment required for each ANTA flagship store to be incurred by us is approximately RMB1.4 million to RMB2.8 million;

. to require our distributors to upgrade approximately 1,000 existing authorized ANTA retail outlets under their management in 2007 by increasing sales floor area and improving layout and appearance, the costs of which will be borne by our distributors and the third party retail outlet operators;

. to enhance cooperation with our distributors by providing guidance on store location selection and negotiation on their behalf with regional and national department store chains; and

. to train distributors and retail outlet sales employees to improve their customer service and product knowledge.

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We will continue to carefully monitor the performance of our distributors. We also plan to enhance communication channels with our distributors and the authorized ANTA retail outlet operators appointed by them by expanding the coverage of our information management system, which we believe will improve their sales and therefore our own.

Improve product research, design and development capabilities

We believe that sustaining our market position and reputation for quality and performance will require increased research, design and development efforts. To achieve this goal, we have established cooperative relationship with scientific and educational institutions including, among others, RSscan (China) Limited, China Leather & Footwear Industry Research Institute, Beijing Sport University, Ningbo University and Shaanxi Science and Technology University. For details, please refer to the paragraph headed ‘‘Research and Development’’ under this section. We intend to continue to participate in joint research and design initiatives with external design studios and educational and technological institutes.

We plan to continue increasing our research and quality control, design and development capabilities, and in 2007, we intend to increase by approximately 10, 25 and 30 of our research and quality control, design and development staff, respectively. We also intend to invest approximately RMB5 million per year from 2007 to 2009 to improve our capability for testing footwear performance at our ANTA sports science laboratory by purchasing new testing equipment and improving our athletic footwear testing and evaluation system and we also plan to invest approximately RMB1 million to establish a footwear materials research and development department in 2007 and work with our suppliers to identify new materials and technologies to enhance the performance of our footwear products.

Increase our scale of production and enhance production flexibility

We believe that the enhancement of our production flexibility will allow us to better respond to the rapid changes in consumer preferences. We have recently added five new footwear production lines at our Jinjiang footwear production facilities for a total capital expenditure of approximately RMB14.1 million. These five new production lines commenced production in the first quarter of 2007 and increased the total number of our footwear production lines from 10 to 15. We expect these additional production lines will significantly increase our production output. We also commenced internal apparel production in Changting in the second quarter of 2007 and expect to commence apparel production at our production facilities in Xiamen in the third quarter of 2007. We also intend to invest approximately RMB1.5 million to implement an industrial engineering system by the end of 2007 to analyze and streamline our current production processes. This industrial engineering system, provided by a corporate consultant specialized in the enhancement of the corporate management of manufacturing enterprises and which is an Independent Third Party, is expected to be capable of examining and recording production activities and analyzing production processes and procedures and their efficiency, which we believe will enable us to improve the efficiency of our production processes and reduce our production costs and will help shorten production lead time. We expect that increasing our production capacity and efficiency will provide us with greater flexibility in our production operations and increase our ability to quickly respond to market changes and to capture market opportunities.

Develop our sportswear retail business

By leveraging our substantial experience in marketing our ANTA brand and products over the last 13 years, our knowledge of the PRC sportswear industry and our strong marketing resources, we believe that we are well-positioned to enter into the sportswear retail market. On December 21, 2006 and March 1, 2007 respectively, we entered into retail agreements with Adidas (Suzhou) and Adidas (China) to retail sporting goods under the adidas and Reebok brands, respectively, in the PRC. We were also authorized to retail

—71— BUSINESS sporting goods under the Kappa brand in Shanghai pursuant to the re-distributorship agreement entered into with Dongzhijie on January 1, 2007. As at April 30, 2007, we operated and managed 13 retail outlets selling adidas branded products, 15 retail outlets selling Reebok branded products and 12 retail outlets selling Kappa branded products.

We also plan to open our own retail sports complexes in the second half of 2007 selling sportswear under a variety of brands, including ANTA, adidas, Reebok and Kappa, and products distributed by other retailers. We believe that the successful operation of a sportswear retail business will bring us a new stream of revenue, increase the level of integration of our business and enhance our ability to quickly respond to changes in fashion trends. We will continue to pursue opportunities to cooperate with international brands.

OUR ANTA BUSINESS MODEL

We primarily design, develop, manufacture and market sportswear, including footwear and apparel for professionals and the general public under our ANTA brand. We also design, market and sell accessory products under the same brand. We adopt a wholesale business model, pursuant to which we sell our ANTA products to distributors throughout the PRC and rely on these distributors to distribute our products to authorized ANTA retail outlets which sell ANTA products to consumers in the PRC.

The following diagram illustrates the vertically integrated business model of our ANTA branded sportswear business.

Auxiliary Material, Production Process Product Purchase/ Semi-finished Products Production Design Procurement Finishing Process Marketing/ Raw Materials Distribution Management of Distributors Research & Outsourcing Development (Purchasing from OEMs and Sub-contracting)

ANTA BRAND AND PRODUCTS

The ANTA brand

We market our products under the ANTA ( ) brand name. Our ANTA logo ‘‘ ’’ is designed in the shape of the English letter ‘‘A’’ slanting to the left as if accelerating into motion. The logo is red in color and is designed to represent youth and energy. We use the Chinese slogan to market our products. It translates as ‘‘keep moving’’, and is designed to symbolize courageous perseverance, which embodies one of our core corporate values. The Trademark Office of the State Administration for Industry and Commerce named our ANTA trademark as applied to sports footwear as one of ‘‘China’s Well-Known Trademarks’’ ( ) in 2002. Since 2002, our ANTA branded athletic footwear was also named as one of ‘‘China’s Famous Brand Products’’ ( ) by the General Administration of Quality Supervision, Inspection and Quarantine of the PRC. For further information on ANTA trademarks, please refer to Appendix VI to this prospectus.

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Brand promotion

We consider that our ANTA brand is invaluable to our sportswear operations in the PRC. Our brand management center is responsible for creating a strong brand image and increasing brand recognition. The center evaluates market information and trends, coordinates unified brand marketing strategies, generates and carries out advertising and promotional activities, coordinates market surveys and manages our athletic sponsorship and endorsement programs as well as our relations with the media and relevant PRC authorities.

We spent approximately RMB29.1 million, RMB47.3 million and RMB103.7 million on media advertising, sponsorships and endorsements, and other promotional activities in the three years ended December 31, 2004, 2005 and 2006, respectively.

Media advertising

We primarily utilize television networks, the internet, newspapers, magazines and outdoor displays in our media advertising campaigns. In addition, ANTA-sponsored sporting events give us a significant air- time presence in China on CCTV. Our advertisements focus on our new products and their features, our brand and the ANTA logo, our sponsored teams and athletic endorsements, and other key elements of the ANTA brand. We also employ in-store and print media advertising to promote our ANTA brand.

Sponsorship and endorsements

ANTA gains year round exposure as a professional sportswear brand through our sponsorship and endorsement arrangements with domestic leagues and athletes.

We sponsor strategically selected domestic sporting leagues, including the Chinese Basketball Association, China National Volleyball League and China Table Tennis Super League. These sponsorship arrangements give us significant brand exposure as matches of all three leagues are broadcast nationwide on CCTV. Athletes participating in our sponsored competitions are required to wear ANTA sportswear. We have also signed ANTA endorsement agreements with a number of well-known athletes in China. Contracted athletes are required to wear ANTA sportswear when participating in various ANTA promotional activities.

In addition, to take advantage of the promotional opportunities presented by the 2008 Beijing Olympics, we are the title sponsor of a CCTV program called ‘‘ANTA CCTV Sports Personality’’. The show consists of short features on promising Chinese athletes, and awards outstanding athletes annually starting from2007to2009fortheiroutstanding performance in the year before.

Other promotional activities

We also organize other activities to promote the ANTA brand, some of which are run by our distributors at the local level. These events include promotional events held before our sponsored sporting events, roadshows featuring new ANTA products, basketball competitions, and ‘‘Meet the Player’’ activities featuring our sponsored athletes.

ANTA Products

ANTA brand sportswear is designed for maximum comfort, function and fashion and is primarily geared towards the needs of active young people between the ages of 14 and 29. We offer four seasonal collections of products each year, tailored to meet the demands of the season. Many of our product offerings are designed to complement each other, to encourage multiple purchases of ANTA products and increase brand awareness and loyalty.

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We offer a wide range of ANTA products. These products can be broken down into three broad categories: footwear, apparel and accessories. The following is a list of our main product types offered under each of these categories:

Footwear Apparel Accessories

basketball footwear table tennis collection bags running footwear football collection hats and caps outdoor sports footwear fashion collection socks extreme sports footwear extreme sports collection protective gear tennis footwear tennis collection equipment table tennis footwear cross-training collection cross-training footwear basketball collection football footwear signature collection outdoor collection classic collection lifestyle collection running collection badminton collection

The following table sets forth the breakdown of our turnover by product category during the Track Record Period:

Years ended December 31, 2004 2005 2006 RMB % of total RMB %oftotal RMB % of total (million) turnover (million) turnover (million) turnover

Footwear 265.9 85.4 446.0 66.5 797.7 63.8 Apparel 41.2 13.2 215.0 32.1 409.9 32.8 Accessories 4.4 1.4 9.3 1.4 42.5 3.4

Total 311.5 100.0 670.3 100.0 1,250.1 100.0

PRODUCTION

Our footwear production facilities are located in Jinjiang, Fujian, China, and have a total gross floor area of approximately 139,632 square meters with 15 production lines producing our ANTA footwear products to maximize production capacity and efficiency. As at December 31, 2006, our Jinjiang facilities had approximately 5,439 production staff and their aggregate annual production volume amounted to approximately 4.5 million, 6.8 million and 8.9 million pairs of footwear for the three years ended December 31, 2004, 2005 and 2006, respectively. In order to meet the increasing demand for our ANTA brand sportswear, we have increased the number of our footwear production lines at our Jinjiang footwear production facilities from 10 to 15 in the first quarter of 2007 and we intend to implement an industrial engineering system to analyze and streamline our current production processes which we believe will improve efficiency, reduce production costs and maximize our existing footwear production capacities.

We receive a substantial portion of our orders at seasonal sales fairs. See the paragraph headed ‘‘Sales and Distribution of ANTA products — Sales fairs’’ for further details of such sales fairs. Our senior management will review any preliminary orders placed at our sales fairs before we enter into final sales contracts with our distributors, which enable us to formulate our production plan and allocate production

—74— BUSINESS between our internal production facilities and outsourced production by contract manufacturers to fulfill the orders to which we commit. We primarily seek to fulfil orders through productionatourownproduction facilities. As a result, our footwear production facilities operated at close to full capacity in the year ended December 31, 2006. Given such capacity constraints and our disciplined approach to internal capacity expansion, we also utilise external contract manufacturers to produce a proportion of our products. We believe this arrangement is cost effective and offers us greater flexibility to adjust our production schedules and to meet unforeseen demand. During the Track Record Period, approximately 18.9%, 15.4% and 24.6%, respectively of the total production volume of our ANTA footwear was produced by external contract manufacturers.

As a contingency plan against electricity shortages and suspension, we have installed four electricity generators with an aggregate installed capacity of 2,000 kilowatts, which the Directors consider capable of generating sufficient electricity for our production operations. During the Track Record Period, we did not experience any material interruption of our operations as a result of suspension or shortages in supply of electricity.

During the Track Record Period, we outsourced all of our apparel and accessory production to external contract manufacturers. To enhance our production flexibility and reduce our production cost, we have acquired and constructed our own apparel production bases in Xiamen and Changting, Fujian, respectively. The Changting facilities have a gross floor area of approximately 44,516 square meters with approximately 900 production staff and commenced production in the second quarter of 2007. The Xiamen apparel facilities have a gross floor area of approximately 14,145 square meters and are expected to have approximately 1,400 production staff. The Xiamen facilities are expected to commence production in the third quarter of 2007.

Production process

Design

We believe that innovative product design is critical to the sustained success of our Company. As a result, we invest considerable resources in product design and development including investing to maintain sufficient internal design capabilities and appointing external designers. We aim to design products to meet the tastes and preferences of our target consumers. As at March 31, 2007, we employed a team of 31 full time designers who, together with four external design studios, design ANTA product collections for four seasons each year and other collections for sponsored events and competitions. Most of our 31 full time internal designers joined us in 2006 and 26 of such designers had design-related experience before they joined us. Our internal design team produced in-house designs of our products during the Track Record Period. As at the Latest Practicable Date, the majority of our footwear and accessory product designs are produced by our internal designers while the external designers are mainly responsible for the design of apparel products.

We select our external designers according to their relevant experience, quality of their designs and their performance. We will only select those designs which satisfy our in-house requirements. We began engaging external designers in 2005 and for the two years ended December 31, 2005 and 2006, the fees paid to such external designers amounted to approximately RMB1.0 million and RMB2.7 million, respectively.

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Our product design process consists of several integrated design steps ranging from initial product concept design to production and testing of prototypes. The diagram below illustrates the typical design process for our ANTA footwear and apparel products:

Feedback from customers

Initial market survey & product Market & strategy formulation trends analysis

Internal design team & brand strategies

Collection design

Review Product design Refinement

Product development

Athletic function testing & evaluation Initial product review Distributors’ feedback after preview

Product sales fairs

. Initial market survey Our design team, with the assistance of third party professionals, & product strategy formulates design concepts for a new season’s products by analyzing formulation information on global sportswear trends and market research.

. Collection design Our designers refine the design concepts into a cohesive collection of products.

. Product design We then design or engage external designers to design our product ranges.

. Product development Blueprints from the product design stage are developed into product prototypes which are tested by our quality and technology center or external product testing agencies against our quality and performance standards.

. Initial product review An inter-departmental ANTA team reviews the initial batch of prototypes together with distributors to assess whether they meet the target standards. Prototypes are refined based on evaluations carried out by athletes and ANTA personnel.

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. Product sales fairs We then display samples of all our new products in a seasonal sales fair, at which we launch our new seasons product collection and our distributors place sales orders with us.

Samples of the final product are then provided to our manufacturing facilities and our third party contract manufacturers. Before mass production commences, we also perform pilot production runs to identify potential problems in the production process.

Manufacturing

The following flowchart outlines our standard production process for our footwear and apparel products:

Raw materials Sample testing and inspection

Materials preparation and processing

Sewing and stitching

Assembly Ironing (for footwear products) (for apparel products)

Finished products inspection

Packaging

. Materials preparation Raw materials are inspected and tested before being cut into individual and processing components, which are then processed in preparation for sewing and stitching.

. Sewing and stitching Individual components of different shapes and materials are sewn and stitched.

. Assembly or Ironing The semi-finished footwear components are then assembled. For apparel products, regular ironing is required to preserve their appearance. To ensure quality, products are inspected and tested at each stage of production.

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. Finished product Our finished footwear and apparel products undergo various tests to inspection ensure high quality and performance.

. Packaging Finished products are packaged and prepared for collection.

Production outsourcing

During the Track Record Period, we outsourced part of our production to external contract manufacturers. For the years ended December 31, 2004, 2005 and 2006, approximately 18.9%, 15.4% and 24.6%, respectively of the total production volume of our ANTA footwear and all ANTA apparel and accessory products were produced by external contract manufacturers. For the year ended December 31, 2006, we engaged 12 footwear, 24 apparel and 14 accessory contract manufacturers, which were principally located in southern China. Other than Changting Sports, all of such contract manufacturers are Independent Third Parties. Changting Sports ceased operations in April 2007. Please refer to the section headed ‘‘Relationship with Controlling Shareholders’’ for details of our relationship with Changting Sports.

We carefully select and evaluate our contract manufacturers. Each of our contract manufacturers is subject to our annual evaluation and assessment in terms of product quality and timely product delivery. We engage their services on a contract basis after obtaining sales orders during our sales fairs taking into account the demand for our ANTA products and our internal production schedule and capacity. We monitor the operation and performance of our contract manufacturers by checking each batch of products delivered to us and timely report to the relevant contract manufacturers any failure to meet our product quality requirements or incidents of late delivery. In assessing the continued suitability of our contract manufacturers, we prepare monthly, quarterly and yearly reports in respect of their performance. We have been advised by our PRC legal adviser, Commerce & Finance Law Offices, that we will not be responsible for any breach of rules and regulations in the PRC by our contract manufacturers and suppliers and we did not review our contract manufacturers’ compliance with environmental protection and social welfare regulations during the Track Record Period. Our Directors confirmed that we had not been held liable for any breach of rules and regulations by our contract manufacturers or suppliers during the Track Record Period. Please refer to ‘‘Risk Factors — Our ANTA brand may be damaged if our contract manufacturers or suppliers violate any relevant laws, rules or regulations, particularly in respect of labor and environmental protection’’.

We do not enter into long term agreements with our contract manufacturers, but enter into separate purchase contracts for different products which set out details including the agreed price, purchase quantity and terms of delivery. These purchase contracts do not contain any terms that will restrict our ability to engage other contract manufacturers. We are also not bound to purchase any minimum quantity of products from our contract manufacturers.

Our production outsourcing consists of two types of arrangement:

Purchasing from OEMs

. We purchase most of our outsourced goods as finished products from OEMs. We provide them with the designs and specifications of our products, and recommend suppliers from which to procure raw materials for their production.

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Sub-contracting

. In accordance with our production requirements, we also sub-contract some of our production needs to our contract manufacturers. We provide these contract manufacturers with raw materials and pay them a processing fee for their services.

During the Track Record Period, we engaged Changting Sports for the manufacture of a portion of our apparel products. Changting Sports is owned by two of our executive Directors, Mr. Ding Shijia and Mr. Wang Wenmo, and Changting Sports is therefore a Connected Person. Changting Sports ceased its business operation in April 2007.

We plan to continue to outsource a portion of our sales orders to external contract manufacturers in order to give us the flexibility to adjust our production schedules and to meet seasonal fluctuations in demand. The cost of outsourced production amounted to approximately 31.2%, 42.9% and 56.7% of our total cost of sales for the years ended December 31, 2004, 2005 and 2006, respectively.

Raw materials

We use artificial leather, soft and flexible polymers and rubber as the major raw materials in our footwear production, and terylene, nylon and cotton in our apparel production. These materials can be obtained from domestic dealers in the PRC.

We source most of our major raw materials from suppliers located in Fujian. The proximity of these suppliers to our production facilities is logistically convenient and helps reduce our procurement costs.

After our sales fairs, we assess the orders received, determine our raw material requirements, and place our orders with our suppliers. However, we also seek to purchase raw materials in bulk to obtain more favorable purchase prices and therefore will also order commonly used raw materials in advance in anticipation of future sales orders, which we believe allows us to better control our cost of sales.

As a steady supply of quality raw materials is essential to our business, we carefully evaluate the suitability of potential suppliers and their ability to assure the timely delivery of quality materials. We have established strict management procedures and rules to govern our dealings with our suppliers. Supplier performance is assessed on a monthly and yearly basis.

Major Suppliers

Our five largest suppliers during the Track Record Period included suppliers of raw materials and external manufacturers from whom we purchased footwear and apparel products. We are generally granted credit terms of 30 to 60 days by our suppliers. For the three years ended December 31, 2004, 2005, 2006, our five largest suppliers accounted for approximately 43.2%, 27.6% and 33.5%, respectively, of our total purchases and our largest supplier accounted for approximately 14.9%, 6.5% and 9.2%, respectively, of our total purchases.

None of our Directors, their respective associates or any shareholders of our Company (which to the knowledge of our Directors will own more than 5% of the issued share capital of our Company immediately following completion of the Global Offering) has any interest in any of the five largest suppliers of our Group.

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SALES AND DISTRIBUTION OF ANTA PRODUCTS

General

We sell our ANTA products on a wholesale basis to our distributors who are responsible for distribution to authorized ANTA retail outlets which sell our ANTA products to consumers in the PRC. We do not sell our ANTA products directly to consumers. Our Directors believe that our wholesale business model is a common business model in the sportswear industry in the PRC and has enabled us to achieve growth in sales by leveraging economies of scale from our distributorship arrangements.

Our distributors manage local networks of authorized ANTA retail outlets, which they either directly operate themselves or appoint third party retail outlet operators to manage, subject to our approval. We do not own or operate any of these authorized ANTA retail outlets and do not enter into any contractual relationship with third party retail outlet operators appointed by our distributors. These authorized ANTA retail outlets are operated under the ANTA brand name with a uniform store layout and sell exclusively our ANTA products. Our distributors directly operated and indirectly managed an aggregate of 4,108 authorized ANTA retail outlets as at December 31, 2006 and had increased this number to 4,217 as at March 31, 2007.

The following chart illustrates the structure of the ANTA sales network for our ANTA products:

Our Group

Distributors

Management

Third Party Retail Outlet Operators Direct operation

Authorized ANTA retail outlets

In addition, we plan to selectively establish and operate ANTA flagship stores in prime commercial locations in major cities in the PRC for brand building purposes, with three to four flagship stores planned to open in 2007. These ANTA flagship stores will be significantly larger than existing authorized ANTA retail outlets and are intended to showcase our latest ANTA product ranges, enhance our brand profile in the local market and give us a platform to test marketing initiatives and gain direct access to consumer feedback.

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Distributors

Selection of distributors

We select our distributors according to a range of factors which we consider important for the operation of the ANTA sales network. To become our distributor, a candidate now generally must satisfy us that it has relevant experience in the management and/or operation of retail outlets, sufficient financial resources and the ability to develop and operate a network of retail outlets in its designated sales region. We do not require our distributors to meet any minimum number of years of experience in operating a retail business. Our distributors are required to assign designated staff to maintain effective communication with us.

Our Directors believe that distributors are attracted to the distribution and retail of our Group’s products because of the growth and profitability potential of such business and the discount to the suggested retail prices of our products which we offer to our distributors. In addition, our Directors consider that the strong growth in market demand, strong ANTA brand recognition and the support provided by our Group add to the attractiveness of the distributorship arrangement to these distributors.

Distributorship agreements

These distributorship agreements include the following principal terms:

. Geographic exclusivity — pursuant to our distributorship agreements, the distributors are authorized to sell exclusively our products under the ANTA brand name within a defined geographical area.

. Sales and expansion targets — since January 2007, our distributorship agreements specify sales and expansion targets for the number of new authorized ANTA retail outlets the distributors are required to open during the year. All of our distributors are required to meet such individual sales targets. We negotiate and agree the annual sales targets with our distributors. No minimum purchase amount is stipulated in such distributorship agreements.

. Payment and credit terms — the distributorship agreements include the payment and credit terms agreed with the distributor, determined on a case-by-case basis.

. Sales reports and estimates — pursuant to the terms of the distributorship agreements, our distributors are required to provide monthly sales reports and quarterly sales estimates to us.

We sell our products to our distributors at a wholesale price, which represents a discount to the suggested retail price of our ANTA products. Save for such discount and subsidies and training mentioned below, we do not offer any sales incentives to our distributors and no fees were payable by our distributors

—81— BUSINESS to us or by us to our distributors under the terms of the distributorship agreements. We also allow our distributors to authorize third parties to retail our products, subject to our written consent. However, we do not enter into agreements with such third parties.

Management of Distributors

We collect, review and analyze data on the sales performance of our distributors. In order to monitor our distributors’ sales, we adopt a policy that requires our distributors to submit sales reports to us on a weekly basis. Such sales reports contain the distributors’ inventory level and sales, any changes or difference from the designated credit limit, and a comparison of their purchase amount with the annual sales target. Our distributors are also required under their distributorship agreements to provide a monthly sales report to us which is in substantially the same form as their weekly sales reports. In addition, our distributors are required to submit quarterly sales estimates to us. This reporting system enables us to obtain up-to-date information on the sales performance of our distributors’ major outlets. In addition, based on our regional sales management team’s on-site inspection reports, we identify and inform distributors of any non- performing authorized ANTA retail outlets which we identify and coordinate with the distributors to take steps to improve the performance of such non-performing outlets.

Our distributors must obtain our written consent before conducting any promotional events, or selling any of our ANTA products to consumers at a discount to the suggested retail price, and such discounts are generally only permitted for end of season sales or sales to consumers in new markets for our products taking into account local market conditions. The level of any such discount is decided and approved by us on a case-by-case basis.

We do not have any obsolete stock arrangements with our distributors save in the event of the termination of a distributorship agreement or out-of-season stock arrangements. Upon the termination of a distributorship agreement, we will repurchase our products at discounts to our sale price which are determined based on the period elapsed since their production. Such discounts range from nil for products manufactured for less than three months ago to 100% for products manufactured for more than one year ago. During the Track Record Period, none of our distributorship agreements was terminated during its term and accordingly we did not repurchase any of our products. When we decide not to renew the distributorship agreement of a distributor, our Company does not repurchase stock held by the leaving distributor. However, our Company will require the replacement distributor to purchase inventories held by the leaving distributor and will coordinate the sale of inventories (including obsolete inventories) from the leaving distributor to the replacement distributor. The terms on which such sales are made are determined between the leaving distributor and the replacement distributor. Our Company does not have a standard procedure or prices for handling such arrangement. For out-of-season stock, we will coordinate with our distributors in reallocating products to different regions or conducting sales promotional activities.

Renewal and termination of distributorship agreements

If the distributors fail to adhere to the distributorship agreements, we have the right to increase the wholesale price of our ANTA products, introduce new distributors into the relevant sales region or terminate the distributorship agreements. We may also terminate a distributorship agreement if the distributor fails to meet its sales target, or if the distributor sells our ANTA products outside of its designated sales region. During the Track Record Period, all of our distributors adhered to the terms of our distributorship agreements in all material respects and we did not unilaterally terminate any of our distributorship agreements before the expiry of their term. As part of our growth strategy and to strengthen the distribution of our products, we did not renew the distributorship agreements of some distributors during the Track Record Period and replaced them with new distributors which we believed would be beneficial to our sales and market development. Depending on the distributor’s success in meeting our sales and expansion targets,

—82— BUSINESS we will consider whether or not to renew our agreement with such distributor. Renewal of our distributorship agreements is subject to negotiation, which usually takes place approximately one month prior to the expiration of the existing distributorship agreements.

All of our distributors are required to ensure that each authorized ANTA retail outlet under its operation or management complies with our policies governing sales and expansion targets, product pricing, stock management, promotion, consumer service standards, store layout, post-sale services and all our other sales policies formulated from time to time. It is our policy that if any of our distributors consistently fails to cause third party retail outlet operators engaged by it to comply with our policies and guidelines, or fails to take necessary steps to cause such operators to remedy any breach or to terminate its contract with such operators, we may choose not to renew our distributorship agreement with that distributor. See ‘‘Risk Factors — We rely on third party distributors and the retail outlet operators appointed by them for the sales of our ANTA products and any failure by us to maintain good relationships with the distributors or failure by them to ensure that such third party retail outlet operators adhere to our retail policies may adversely affect our business.’’

Training

In order to build a more consistent brand image nationwide, we invite our distributors’ senior management personnel to attend training sessions and familiarize them with our ANTA policies and procedures. Furthermore, our sales team will conduct periodic on-site inspections to ensure that our distributors and authorized ANTA retail outlets comply with such policies and procedures.

Renovation subsidies

As an incentive to our distributors, we provide renovation subsidies in the form of standardized promotion materials and display equipment to them for renovation of authorized ANTA retail outlets directly operated or indirectly managed by them. For the three years ended December 31, 2004, 2005 and 2006, we have provided subsidies in the form of display equipment and promotion materials of approximately RMB4.1 million, RMB3.3 million and RMB5.9 million, respectively to our distributors.

Top five largest distributors

For the three years ended December 31, 2004, 2005 and 2006, sales to our top five distributors accounted for approximately 50.6%, 35.6% and 44.7%, respectively, of our total revenue. Sales to our largest distributor accounted for approximately 14.5%, 12.8% and 13.9%, respectively, of our total revenue for the same periods. Please refer to the paragraphs headed ‘‘We rely on third party distributors and the retail outlet operators appointed by them for the sales of our ANTA products and any failure by us to maintain good relationships with the distributors or failure by them to ensure that such third party retail outlet operators adhere to our retail policies may adversely affect our business’’ and ‘‘We rely on a small number of customers for a significant portion of our sales. Our financial condition and results of operations may be adversely affected if we fail to maintain our relationship with any or all of these customers’’ under the ‘‘Risk Factors’’ section of this prospectus.

Save as disclosed in the paragraphs headed ‘‘Relationship with our distributors’’ in this section, none of our Directors, or our chief executive, or any person who, to the knowledge of our Directors owns more than 5% of our issued share capital or any of our subsidiaries, or any of their respective associates, had any interest in any of our Group’s top five distributors during the Track Record Period.

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Relationship with our Distributors

Relationship with distributors’ former corporate entities

During the Track Record Period, members of our Group and our Directors have provided financial assistance to the shareholders of certain of our distributors in connection with the establishment of their former corporate entities. The details of such financial assistance are provided below.

(Chengdu Anta Sports Goods Co., Ltd.*) (‘‘Chengdu Anta’’)

Chengdu Anta was one of our distributors during the Track Record Period. When it was incorporated as a limited liability company in the PRC on March 8, 2004, it had a registered capital of RMB1 million and its equity interests were held as to 90% by ANTA Jinjiang and as to 10% by Mr. Hong Yanqing, an Independent Third Party. Mr. Hong Yanqing was the beneficial owner of the 10% equity interest in Chengdu Anta. According to a trust agreement executed in January 2004, ANTA Jinjiang agreed to act as the trustee to hold the 90% equity interest in Chengdu Anta on trust for Mr. Li Yuxiong such that Mr. Li Yuxiong was the beneficial owner of the 90% equity interest in Chengdu Anta held by ANTA Jinjiang. As such, we had no beneficial interest in Chengdu Anta. At the time of the establishment of Chengdu Anta, we provided an interest-free loan of RMB0.9 million to Mr. Li Yuxiong for the purposes of contributing to the registered capital of Chengdu Anta, such loan being for 90% of the registered capital of Chengdu Anta beneficially owned by Mr. Li Yuxiong. No interest was payable on the loan and Mr. Li Yuxiong repaid the loan of RMB0.9 million to us in cash on August 10, 2006. Neither we nor our Directors had any involvement in the management of the operations of Chengdu Anta. Our PRC legal adviser, Commerce & Finance Law Offices, has confirmed that the above trust agreement was valid and effective and did not breach the requirements of PRC law.

According to an agreement dated August 1, 2006, ANTA Jinjiang transferred its 90% equity interest in Chengdu Anta to Mr. Wu Yonghua, an executive Director, pending the dissolution of ANTA Jinjiang and Chengdu Anta. Mr. Wu Yonghua held the 90% equity interest on trust for Mr. Li Yuxiong pursuant to a trust agreement dated July 9, 2006. Mr. Wu Yonghua did not pay any consideration for the transfer of equity interests as he held the equity interests as trustee for Mr. Li Yuxiong. After that transfer of equity interests, Mr. Wu Yonghua and Mr. Hong Yanqing held 90% and 10% of Chengdu Anta’s equity interests, respectively. Mr. Wu Yonghua did not hold any management position in Chengdu Anta and the reason for the transfer to him of the equity interest in Chengdu Anta was in view of the dissolution of ANTA Jinjiang prior to the dissolution of Chengdu Anta.

Chengdu Anta was established by Mr. Li Yuxiong to act as our distributor. Mr. Li informed our Company that prior to his establishing Chengdu Anta as one of our distributors, he was engaged in the footwear business as the sales manager of a footwear company in Jinjiang.

Since October 2006, Mr. Li Yuxiong has ceased to operate his business of distributing our ANTA products through Chengdu Anta. Instead he established a new entity, (Sichuan Anda Sports Products Co., Ltd.*) in August 2006 through which he continues to conduct this business. Mr. Li Yuxiong is the sole shareholder of the new entity. None of our Group, our Directors or senior management has any interests in this new entity. We understand that Chengdu Anta was de-registered on April 18, 2007.

None of our Directors or their Associates has any involvement in the management of the operations of Chengdu Anta or (Sichuan Anda Sports Products Co., Ltd.*) nor do they hold any management position in such entities.

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Chengdu Anta was our largest customer in 2005 and one of our five largest customers in 2006.

(Shenyang Anta Sports Goods Co., Ltd.*) (‘‘Shenyang Anta’’)

Shenyang Anta was one of our distributors during the Track Record Period. When it was incorporated as a limited liability company in the PRC on January 14, 2004, it had a registered capital of RMB1.0 million and its equity interests were held as to 90% by ANTA Jinjiang and as to 10% by Mr. Lin Sankuang, both as trustees on behalf of Mr. Chen Xiaochun. Mr. Lin Sankuang is an Independent Third Party. According to two trust agreements executed in January 2004, ANTA Jinjiang and Mr. Lin Sankuang agreed to act as trustees to hold the 90% and 10% equity interests respectively in Shenyang Anta on trust for Mr. Chen Xiaochun such that Mr. Chen Xiaochun was the beneficial owner of the 100% equity interest in Shenyang Anta. As such, we had no beneficial interest in Shenyang Anta. At the time of the establishment of Shenyang Anta, we provided an interest-free loan of RMB0.9 million to Mr. Chen Xiaochun for the purposes of contributing to the registered capital of Shenyang Anta, such loan being for 90% of the registered capital of Shenyang Anta beneficially owned by Mr. Chen Xiaochun. No interest was payable on the loan and Mr. Chen Xiaochun repaid the loan of RMB0.9 million to us in cash on August 10, 2006. Neither we nor our Directors had any involvement in the management of the operations of Shenyang Anta. Our PRC legal adviser, Commerce & Finance Law Offices, has confirmed that the above trust agreements were valid and effective and did not breach the requirements of PRC law.

On July 1, 2005, ANTA Jinjiang and Mr. Lin Sankuang respectively entered into share transfer agreements with Mr. Wu Yonghua, an executive Director, to each transfer a 10% equity interest in Shenyang Anta (an aggregate 20% equity interest) to Mr. Wu Yonghua, pending the dissolution of ANTA Jinjiang and Shenyang Anta and Mr. Wu Yonghua held the 20% equity interest on trust for Mr. Chen Xiaochun pursuant to a trust agreement dated May 30, 2005. Mr. Wu Yonghua did not pay any consideration for the transfer of equity interests as he held the equity interests as a trustee. After such equity transfer, Mr. Wu Yonghua held a 20% equity interest in Shenyang Anta. On August 1, 2006, ANTA Jinjiang transferred its 80% equity interest in Shenyang Anta to Mr. Hong Yanqing, an Independent Third Party. Mr. Hong Yanqing did not pay any consideration for the transfer of equity interest as he held such equity interest as trustee for Mr. Chen Xiaochun pursuant to an agreement dated July 1, 2006. After that transfer of equity interest, Mr. Hong Yanqing and Mr. Wu Yonghua held 80% and 20% of Shenyang Anta’s equity interests, respectively. Mr. Wu Yonghua holds no management position in Shenyang Anta and the reason for the transfer to him of the equity interests in Shenyang Anta was in view of the dissolution of ANTA Jinjiang prior to the dissolution of Shenyang Anta.

Shenyang Anta was established by Mr. Chen Xiaochun to act as our distributor. Mr. Chen informed our Company that prior to his establishing Shenyang Anta as one of our distributors, he was engaged in the business of retail and trading footwear and apparel.

Since January 2007, Mr. Chen Xiaochun has ceased to operate his business of distributing our ANTA products through Shenyang Anta. Instead he has established a new entity, (Shenyang Anxun Sports Products Co., Ltd.*) in September 2006 through which he continues to conduct this business. Mr. Chen Xiaochun is the sole shareholder of the new entity. None of our Group, our Directors or senior management has any interests in this new entity. We understand that Shenyang Anta was de-registered on February 8, 2007.

None of our Directors or their Associates has any involvement in the management of the operations of Shenyang Anta or (Shenyang Anxun Sports Products Co., Ltd.*) nor do they hold any management position in such entities.

Shenyang Anta was our largest customer in 2004 and one of our five largest customers in 2005.

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(Beijing Anta Oriental Sports Goods Co., Ltd.*) (‘‘Beijing Anta’’)

Beijing Anta was one of our distributors during the Track Record Period. When it was established in January 2001, it had a registered capital of RMB10 million and its equity interests were held as to 50% by Mr. Ding Shizhong and as to 50% by Mr. Wang Wenmo, both of whom are executive Directors. According to a trust agreement executed in December 2000, Mr. Ding Shizhong and Mr. Wang Wenmo agreed to act as the trustees to hold their respective 50% equity interests in Beijing Anta on trust for Ms. Wang Shuying such that Ms. Wang was the beneficial owner of the 100% equity interest in Beijing Anta held by Mr. Ding Shizhong and Mr. Wang Wenmo. As such, Mr. Ding Shizhong and Mr. Wang Wenmo had no beneficial interest in Beijing Anta. Ms. Wang is the wife of Mr. Su Weiqing, who operated the business of Beijing Anta. Both Ms. Wang and Mr. Su are Independent Third Parties. At the time of the establishment of Beijing Anta, each of Mr. Ding Shizhong and Mr. Wang Wenmo provided an interest-free loan of RMB5.0 million, respectively, to Ms. Wang for the purposes of contributing to the registered capital of Beijing Anta, such loans being for the full amount of the registered capital of Beijing Anta. No interest was payable on the loans and Ms. Wang Shuying repaid the loans to Mr. Ding Shizhong and Mr. Wang Wenmo by a number of cash payments between February and August 2006. Neither we nor our Directors had any involvement in the management of the operations of Beijing Anta. Our PRC legal adviser, Commerce & Finance Law Offices, has confirmed that the above trust agreement was valid and effective and did not breach the requirements of PRC law.

On October 28, 2006, Mr. Ding Shizhong and Mr. Wang Wenmo separately entered into share transfer agreements with Ms. Wang Shuying to transfer the 100% equity interests in Beijing Anta to Ms. Wang Shuying after the repayment of the loans by Ms. Wang. Ms. Wang Shuying did not pay any consideration for the transfer of equity interests as Mr. Ding Shizhong and Mr. Wang Wenmo held the equity interests in Beijing Anta as trustees.

Since January 2007, Mr. Su Weiqing and Ms. Wang Shuying have ceased to operate their business of distributing our ANTA products through Beijing Anta. Instead Mr. Su has established a new entity, (Beijing Jiyuan Shengbao International Trading Co., Ltd.*) through which he continues to conduct this business. Mr. Su is the sole shareholder of the new entity. None of our Group, our Directors or senior management has any interests in this new entity. We understand that, as at the Latest Practicable Date, Beijing Anta has ceased operation pending liquidation.

Beijing Anta was established by Mr. Su Weiqing and Ms. Wang Shuying to act as our distributor and engaged in market data collection and preparation for development of our products in Beijing before being appointed as a distributor of our Group in 2005. It was one of our five largest customers in 2005.

Mr. Su informed our Company that prior to his establishing Beijing Anta as one of our distributors, he was engaged in the footwear and apparel business as the sales and marketing manager of different footwear and apparel companies.

None of our Directors or their Associates has any involvement in the management of the operations of Beijing Anta or (Beijing Jiyuan Shengbao International Trading Co., Ltd.*) nor do they hold any management position in such entities.

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At the time of the establishment of Chengdu Anta, Shenyang Anta and Beijing Anta, the local markets in which they operated were new markets for our products. In order to establish our presence and brand in those markets and to support the operations of those distributors in establishing and developing those markets for us:

1. We, Mr. Ding Shizhong and Mr. Wang Wenmo provided interest-free loans to the beneficial owners of Chengdu Anta, Shenyang Anta and Beijing Anta for contribution to the registered capital as the initial capital requirement in the establishment of such distributors and the development of the markets. Such loans have been subsequently repaid by the relevant beneficial owners.

2. We permitted the distributors to use the Chinese characters ‘‘ ’’ (Anta) as part of their corporate name to reflect the association of our distributors with us which we considered would facilitate the development of the new markets by such distributors in view of our brand promotion. Now that the ANTA sales network is established in those markets, the relevant entities have been or are in the course of being de-registered or have ceased operation pending liquidation and the replacement entities no longer have the Chinese characters ‘‘ ’’ ( Anta ) in their corporate name.

3. Our Directors confirm that ANTA Jinjiang, Mr. Ding Shizhong and Mr. Wang Wenmo acted as the trustees of Chengdu Anta, Shenyang Anta and Beijing Anta at the request of Mr. Li Yuxiong, Mr. Chen Xiaochun and Ms. Wang Shuying who believed that their shareholder status in Chengdu Anta, Shenyang Anta and Beijing Anta would assist in the development of their markets.

4. After the relevant loans were repaid and the disposal of equity interests by ANTA Jinjiang in Chengdu Anta and Shenyang Anta and the de-registration of Chengdu Anta and Shenyang Anta, and disposal of equity interests by Mr. Ding Shizhong and Mr. Wang Wenmo in Beijing Anta, the relevant trust agreements were terminated.

5. Our Directors confirm that Mr. Li Yuxiong, Mr. Chen Xiaochun and Ms. Wang Shuying decided to dissolve Chengdu Anta, Shenyang Anta and Beijing Anta and set up new entities as distributors of our Group as part of their corporate development.

Save for being the shareholders of our current and past distributors, Mr. Li Yuxiong, Mr. Chen Xiaochun, Mr. Su Weiqing or Ms. Wang Shuying have no relationship with our Group, our Directors or senior management, our shareholders or their respective associates.

Relationship with our current distributors

As at March 31, 2007, we had 37 distributors for our ANTA products and five of our distributors are related to our Directors and senior management or their associates.

(Guangzhou Anda Trading Development Co., Ltd.*) (‘‘Guangzhou Anda’’)

Guangzhou Anda has been one of our distributors for our ANTA products since 2005. It was incorporated as a limited liability company in the PRC on June 20, 2005 and is owned as to 50% by Mr. Zheng Jiayuan, 25% by Mr. Ding Qingliang and 25% by Mr. Wu Wenhou. Mr. Ding Qingliang is the brother-in-law of Mr. Ding Shizhong and Mr. Wu Wenhou is the cousin of Mr. Wu Yonghua. Both Mr. Ding Shizhong and Mr. Wu Yonghua are our executive Directors. Mr. Zheng Jiayuan is an Independent Third Party. For the two years ended December 31, 2005 and 2006, our sales to Guangzhou Anda amounted to

—87— BUSINESS approximately RMB2.9 million and RMB174.1 million, respectively, representing approximately 0.4% and 13.9% of our total sales, respectively, during the same periods. Guangzhou Anda was our largest customer in 2006.

Mr. Ding Qingliang and Mr. Wu Wenhou signed the distributorship agreements for the year ending December 31, 2007 on behalf of two other distributors of our Group, namely (Guiyang Ankai Sports Products Trading Co., Ltd.*) (‘‘Guiyang Ankai’’) and (Wuhan Jingrui Sports Products Co., Ltd.*) (‘‘Wuhan Jingrui’’) respectively, pursuant to two powers of attorney both dated December 14, 2006. These two companies became our distributors in 2007. We confirm that such authorizations were made as a temporary arrangement between the respective distributors with each of Mr. Ding Qingliang and Mr. Wu Wenhou due to the unavailability of the legal representatives or other representatives of the distributors to sign the distributorship agreements at the signing ceremony held at a quarterly meeting of distributors and Mr. Ding Qingliang and Mr. Wu Wenhou were appointed by the distributors in view of their distributorship through Guangzhou Anda as a major distributor of our Group. We further confirm that Mr. Ding Qingliang and Mr. Wu Wenhou have no equity interest in, or involvement in the management of, the two distributors mentioned above.

Guangzhou Anda was established by its shareholders to act as our distributor and it had not engaged in other business prior to becoming our distributor. Mr. Ding Qingliang and Mr. Wu Wenhou informed our Company that prior to the establishment of Guangzhou Anda as one of our distributors, Mr. Ding Qingliang was engaged in the footwear business as a deputy manager of a footwear manufacturer in Jinjiang and Mr. Wu Wenhou was engaged in the retail and trading business of footwear and apparel in Guangzhou district.

Guangzhou Anda has been deemed by the Stock Exchange a Connected Person of our Company under Rule 14A.11(4) of the Listing Rules. Please refer to the section headed ‘‘Connected Transactions’’ for details of its transactions with us.

(Quanzhou Binhui Trading Co., Ltd.*) (‘‘Quanzhou Binhui’’)

Quanzhou Binhui has been one of our distributors for our ANTA products since 2005. It was incorporated as a limited liability company in the PRC on December 14, 2004 and is owned as to 80% by Mr. Song Lifeng and 20% by Ms. Song Jianming. Mr. Song Lifeng is the brother-in-law of Mr. Wu Yonghua, our executive Director. Ms. Song Jianming is the aunt of Mr. Song Lifeng. For the two years ended December 31, 2005 and 2006, our sales to Quanzhou Binhui amounted to approximately RMB5.6 million and RMB9.6 million, respectively, representing approximately 0.8% and 0.8% of our total sales, respectively, during the same periods.

Quanzhou Binhui was established by its shareholders to act as our distributor and it had not engaged in other business prior to becoming our distributor.

Quanzhou Binhui has been deemed by the Stock Exchange a Connected Person of our Company under Rule 14A.11(4) of the Listing Rules. Please refer to the section headed ‘‘Connected Transactions’’ for details of its transactions with us.

(Zhengzhou Anfa Sports Products Co., Ltd.*) (‘‘Zhengzhou Anfa’’)

Zhengzhou Anfa has been one of our distributors for our ANTA products since 2006. It was incorporated in the PRC as a limited liability company on November 9, 2005 and is owned as to 75% by Mr. Lin Aiguo and 25% by Mr. Ding Qingliang. Mr. Ding Qingliang is the brother-in-law of Mr. Ding Shizhong, our executive Director and he acquired his 25% equity interest in Zhengzhou Anfa in December 2006. Mr.

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Lin Aiguo is an Independent Third Party. Our sales to Zhengzhou Anfa during the year ended December 31, 2006 amounted to approximately RMB9.2 million, accounting for approximately 0.7% of our total sales during the period.

Zhengzhou Anfa was established by its shareholders to act as our distributor and it had not engaged in other business prior to becoming our distributor.

We did not provide any financial assistance to any shareholder of Zhengzhou Anfa in the establishment of Zhengzhou Anfa nor to Mr. Ding Qingliang in his acquisition of an equity interest in Zhengzhou Anfa. Neither we nor our Directors are involved in the management of the business operation of Zhengzhou Anfa.

(Shanghai Anchi Sports Products Co., Ltd.*) (‘‘Shanghai Anchi’’)

Shanghai Anchi has been one of our distributors for our ANTA products since 2005. It was incorporated in the PRC as a limited liability company in March 2005 and is owned as to 80% by Mr. Ding Kunming and 20% by Mr. Ding Qingjun. Mr. Ding Qingjun is the brother-in-law of Mr. Ding Shizhong, our executive Director. Mr. Ding Kunming is an Independent Third Party. For the two years ended December 31, 2005 and 2006, our sales to Shanghai Anchi amounted to approximately RMB3.3 million and RMB60.3 million, respectively, representing approximately 0.5% and 4.8% of our total sales, during the same periods, respectively. The increase in sales to Shanghai Anchi in 2006 was due to the increase in the number of authorized ANTA retail outlets directly operated or indirectly managed by Shanghai Anchi and due to the fact that sales to department stores and sole proprietors in the Shanghai region, which, prior to 2006, were made directly by us, were made through Shanghai Anchi in 2006.

Shanghai Anchi was established by its shareholders to act as our distributor and it had not engaged in other business prior to becoming our distributor.

We did not provide any financial assistance to any shareholder of Shanghai Anchi in the establishment of Shanghai Anchi. Neither we nor our Directors are involved in the management of the business operation of Shanghai Anchi.

(Jilin Province Chang An Sports Goods Co., Ltd.*) (‘‘Jilin Sports’’)

Jilin Sports has been one of our distributors for our ANTA products since 2006. It was incorporated in the PRC as a limited liability company on June 20, 2006 and at the time of its establishment, Mr. Jin Wei held a 100% equity interest in Jilin Sports. Mr. Jin Wei subsequently became the general manager of Shanghai Fengxian in October 2006. In February 2007, Mr. Jin Wei transferred part of his equity interest in Jilin Sports to Mr. Chen Shaozu, an Independent Third Party. After the transfer, Mr. Jin Wei and Mr. Chen Shaozu hold 20% and 80% equity interests in Jilin Sports, respectively. Our sales to Jilin Sports in 2006 amounted to approximately RMB6.0 million, accounting for approximately 0.5% of our turnover in 2006. Mr. Jin Wei is also a director of Jilin Sports.

Jilin Sports was established by its shareholders to act as our distributor and it had not engaged in other business prior to becoming our distributor.

We did not provide any financial assistance to Mr. Jin Wei or Mr. Chen Shaozu in the establishment of Jilin Sports or the transfer of equity interests thereafter. None of our Directors or their associates has any involvement in the management of the operations of Jilin Sports nor do they hold any management position in Jilin Sports.

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(Harbin Jinjian Sports Products Trading Co., Ltd.*) (‘‘Harbin Sports’’)

Harbin Sports has been one of our distributors for our ANTA products since 2005. It was incorporated in the PRC as a limited liability company on February 6, 2005 and at the time of its establishment Mr. Jin Wei held a 45% equity interest in Harbin Sports. The remaining 55% equity interest was held by Mr. Yao Qingdi, an Independent Third Party. In February 2007, Mr. Jin Wei transferred part of his equity interest in Harbin Sports to Mr. Song Guanmin, an Independent Third Party. After the transfer, Mr. Jin Wei, Mr. Song Guanmin and Mr. Yao Qingdi hold 25%, 20% and 55% equity interests in Harbin Sports, respectively. Our sales to Harbin Sports for the two years ended December 31, 2005 and 2006 amounted to approximately RMB6.1 million and RMB39.9 million, respectively, accounting for approximately 0.9% and 3.2% of our turnover during the same periods, respectively. Mr. Jin Wei is also a director of Harbin Sports.

Harbin Sports was established by its shareholders to act as our distributor and it had not engaged in other business prior to becoming our distributor.

We did not provide any financial assistance to Mr. Jin Wei, Mr. Song Guanmin or Mr. Yao Qingdi in the establishment of Harbin Sports or the transfer of equity interests thereafter. None of our Directors or their associates has any involvement in the management of the operations of Harbin Sports nor do they hold any management position in Harbin Sports.

Mr. Jin Wei held the beneficial interests in Jilin Sports and Harbin Sports prior to his joining Shanghai Fengxian on October 20, 2006. Shanghai Fengxian was established to engage in the sportswear retail business selling adidas, Reebok and Kappa branded products while Jilin Sports and Harbin Sports are engaged in exclusively selling our ANTA products. Our Directors consider that there is no overlapping business between Shanghai Fengxian, Jilin Sports and Harbin Sports. We confirm that Mr. Jin Wei will only be involved in Shanghai Fengxian’s retail business and will not participate or be involved, as one of our employees, in the production or sales of our ANTA products.

Our Directors further consider that Mr. Jin Wei in substance exercised no control or significant influence over our Group during the Track Record Period. Whilst Mr. Jin Wei is expected to assist us to develop our retail business under Shanghai Fengxian, only our Directors and the board of directors of Shanghai Fengxian have the power to make decisions in respect of Shanghai Fengxian’s operations and business development. Our Directors consider that Mr. Jin Wei actually has no authority to exercise any power to govern the financial and operating policies of Shanghai Fengxian, despite his position as the general manager of Shanghai Fengxian. His duties and powers are specified in the articles of association of Shanghai Fengxian, and he is only responsible for executing the policies set by our Directors and the board of directors of Shanghai Fengxian. There were no transactions between Shanghai Fengxian and its subsidiaries with Jilin Sports or Harbin Sports during the Track Record Period. Our Directors consider that the operations of Shanghai Fengxian and its subsidiaries, which conduct the retail business of non-ANTA branded products, are independent of the operations of our ANTA branded product business. As a result, the operations of Shanghai Fengxian and its subsidiaries and other members of our Group are in fact not influenced by Mr. Jin Wei’s role as a member of key management and his equity interests and directorships in Jilin Sports and Harbin Sports during the Track Record Period and thereafter.

We confirm that save for the distributorship agreements entered into with Guiyang Ankai and Wuhan Jingrui referred to above and the distributorship agreements signed with Guangzhou Anda and Quanzhou Binhui (who are regarded as Connected Persons of our Company), each of the distributorship agreements has been signed on behalf of the relevant distributors by persons independent of our Group and the Connected Persons of our Company.

Save as disclosed above, there is no past or existing relationship between our distributors and our Group, our Directors, senior management or our shareholders or their respective associates.

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ANTA sales network

Authorized ANTA retail outlets are directly operated by our distributors or third party retail outlet operators appointed by our distributors.

We divide the PRC into four sales regions for the supervision of our distributors and the authorized ANTA retail outlets directly operated by them or indirectly managed by them: northern, eastern, southern, and western China. The following map shows the geographical distribution of our distributors’ network of 4,108 authorized ANTA retail outlets across the PRC as at December 31, 2006:

Heilongjiang (103)

Jilin (89) Xinjiang (36) Inner Mongolia (57)

Gansu (17) Liaoning (156) Beijing (139) Tianjin (42) Hebei (192) Qinghai (3) Ningxia (3) Shanxi (71) Shandong (145)

Tibet (1) Shaanxi (112) Jiangsu (398) Henan (106)

Sichuan (209) Anhui (163) Hubei (161) Shanghai (135) Chongqing (88) Zhejiang (429) Jiangxi (99) Hunan (180) > 200 retail outlets Guizhou (44) Yunnan (105) Fujian (212) 100 to 200 retail outlets

50 to 100 retail outlets Guangxi (149) < 50 retail outlets

Guangdong (437)

Hainan (27)

The table below shows our sales by sales region during the Track Record Period:

Number of authorized ANTA retail outlets as at Sales for the year ended December 31, December 31, Sales region 2004 2005 2006 2006 RMB % of total RMB % of total RMB % of total (million) sales (million) sales (million) sales

Eastern region(1) 85.4 27.4 99.5 14.8 327.5 26.2 1,224 Southern region(2) 69.6 22.4 154.6 23.1 344.0 27.5 825 Western region(3) 55.7 17.9 134.2 20.0 264.4 21.2 894 Northern region(4) 100.8 32.3 282.0 42.1 314.2 25.1 1,165

Total 311.5 100.0 670.3 100.0 1,250.1 100.0 4,108

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Notes:

(1) Eastern region includes Jiangsu, Zhejiang, Anhui, Jiangxi and Shanghai.

(2) Southern region includes Fujian, Guangdong, Hainan and Guangxi.

(3) Western region includes Hunan, Sichuan, Guizhou, Yunnan, Hubei, Henan, Tibet and Chongqing.

(4) Northern region includes Jilin, Heilongjiang, Shandong, Gansu, Liaoning, Hebei, Shanxi, Shaanxi, Inner Mongolia, Ningxia, Qinghai, Beijing, Tianjin and Xinjiang.

Authorized ANTA retail outlets

Authorized ANTA retail outlets are directly operated or indirectly managed by our distributors through third party retail outlet operators appointed by our distributors. The retail networks of our distributors in the PRC do not overlap geographically. Our distributors are authorized to appoint third party retail outlet operators, subject to our prior approval. We do not own or operate any of these authorized ANTA retail outlets and do not enter into any contractual relationship with the third party retail outlet operators appointed by our distributors. The authorized ANTA retail outlets are operated under the ANTA brand name with a uniform store layout and sell exclusively our ANTA products.

The criteria we consider when approving the appointment of third party retail outlet operators appointed by our distributors include whether the operator:

. has experience in retailing sportswear;

. has the ability to meet our sales targets;

. has adequate operating capital to operate an authorized ANTA retail outlet; and

. has a suitable store location and size.

Retail outlet operators are not required to meet any minimum number of years of experience in retail business.

Our distributors and third party retail outlet operators appointed by them are subject to retail policies governing sales and expansion targets, product pricing, stock management, store layout, promotion, customer service and after-sale service standards which we provide to our distributors. Pursuant to such policies and the terms of the agreements that the third party retail outlet operators enter with our distributors, they are prohibited from selling any products other than our ANTA products in the authorized ANTAretailoutletsandarerequiredtoadheretoourguidelines in the use of ANTA brand materials, shop layouts and product display. We rely on our distributors to implement and enforce such retail policies and do not have any direct redress against third party retail outlet operators in the event of that they breach such

—92— BUSINESS policies or their agreement with the distributor. However, it is our policy that if any of our distributors consistently fails to cause the third party retail outlet operators engaged by it to comply with our policies and guidelines, or fails to take necessary steps to cause such operators to remedy any breach or terminate its contract with such operators, we may choose not to renew our distributorship agreement with that distributor. See ‘‘Risk Factors — We rely on third party distributors and the retail outlet operators appointed by them for the sales of our ANTA products and any failure by us to maintain good relationships with the distributors or failure by them to ensure that such third party retail outlet operators adhere to our retail policies may adversely affect our business.’’ Some of the authorized ANTA retail outlet operators may also own and operate other stores or retail outlets in addition to the authorized ANTA retail outlets operated by them.

As at December 31, 2006, our distributors directly operated and indirectly managed a total of 4,108 authorized ANTA retail outlets consisting of 3,245 outlets operated by third party retail outlet operators and 863 outlets operated directly by our distributors, respectively. As at March 31, 2007, our distributors directly operated and indirectly managed a total of 4,217 authorized ANTA retail outlets consisting of 3,296 outlets operated by third party retail outlet operators and 921 outlets operated directly by our distributors, respectively.

Sales to sole proprietors and department stores

During the Track Record Period, a portion of our ANTA products were sold by us directly to approximately 476, 596 and 525 sole proprietors and department stores which in aggregate accounted for approximately 45.5%, 46.3% and 17.8%, respectively, of our total sales. We recorded our sales to entities other than distributors and department stores under the category of sole proprietors and our sales to such sole proprietors during the Track Record Period amounted to approximately RMB28.4 million, RMB236.3 million and RMB180.2 million respectively, accounting for approximately 9.1%, 35.3% and 14.4% of our sales during the same period. We did not enter into formal sales agreements with these sole proprietors since many of the sales were incidental and of insignificant value per transaction. Our sales to department stores were not by way of concessionary sales but were direct sales. We required the department stores to follow our pricing policies for the sale of our ANTA products.

We ceased selling our ANTA products directly to such sole proprietors and department stores since January 2007. Orders from such customers are now handled by our distributors. Our Directors believe that this has simplified our wholesale business model and that, as a result, we are able to better manage and control our sales channel, as we only sell to our distributors. We believe that such arrangement therefore improves the efficiency of our use of resources in handling incidental and insignificant orders from department stores and sole proprietors. In addition, our Directors consider that the cessation of direct sales to such customers enables us to improve our production planning as our distributors place regular orders with us after seasonal sales fairs as described below. No penalties have arisen from the cessation of our sales to such sole proprietors and department stores.

Sales fairs

We organize seasonal sales fairs to launch and sell our new season’s collections of products. These fairs occur approximately six months ahead of the introduction of a new season’s products to market to allow smooth order placement and product manufacturing. In 2006, we introduced to the market approximately 500 new footwear styles, approximately 700 new apparel styles and approximately 700 new accessory styles.

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These sales fairs are the primary channel through which we market our products to our present and potential distributors. The fairs are also attended by many authorized ANTA retail outlet operators who place relevant orders through their appointing distributors. We receive a substantial proportion of our annual orders at these events. Preliminary orders placed at our sales fairs are reviewed by our senior management before we enter into final sales contracts with our distributors.

ANTA sales network management

Centralized sales management

Our sales operations are managed and coordinated at our headquarters at Jinjiang, Fujian. As at March 31, 2007, we had a team of 166 staff in our sales and marketing department. The management team of this department is responsible for overall sales policy formulation, planning and oversight of sales operations and the other staff are responsible for supervision and management of distributors and inspection of authorized ANTA retail outlets. This management team also reviews and revises our Group’s policies and guidelines in respect of sales and marketing, sets sales targets for distributors and evaluates their performance and decides whether or not to renew their distributorship agreements. The team also reviews sales reports submitted from each of our sales regions (summarizing the sales reports from distributors within the region), and assists in the formulation of distributorship agreements to be signed with the distributors and agreements to be entered into between distributors and authorized ANTA retail outlet operators.

We also implement various policies through our distributors to assist them in managing their ANTA retail sales network. These policies include sales management, marketing and promotion, pricing, sales reporting and human resources policies. The human resources policy requires sales staff of our distributors and of authorized ANTA retail outlets to attend training courses provided by us. Through these policies we aim to increase management efficiency and improve the quality of services offered to consumers of ANTA products.

Regional sales management

To enhance sales network management, we divide the PRC into four sales regions: northern, eastern, southern and western China. Each region is managed by a regional manager with the assistance of a team of account managers and account representatives. These regional sales management teams are responsible for monitoring the performance of the distributors and authorized ANTA retail outlets within their region, inspection of authorized ANTA retail outlets, and supervising the distributors and authorized ANTA retail outlet operators’ compliance with our pricing, advertising, promotion and other policies. They also assist in credit management, product mix management and promotion activities, such as discount sales and transfer of stock to other distributors for sales in different regions. Our regional sales managers regularly evaluate the sales performance of the distributors within their regions, including their ability to meet our sales targets and expansion plan. Our regional sales management teams report to our headquarters.

Retail operations

To ensure a uniform brand image, we set operational guidelines for the authorized ANTA retail outlets directly operated or indirectly managed by our distributors. These guidelines set out the criteria for establishing an authorized ANTA retail outlet and standardized business operating procedures for authorized ANTA retail outlets, such as inventory control procedures, product display requirements and customer service standards. Authorized ANTA retail outlet operators are required to adhere to our policies and procedures in their daily operations, including suggested retail price and discount guidelines. They are also required to participate in promotional campaigns and activities initiated by us and to adhere to our

—94— BUSINESS guidelines in the use of ANTA brand materials, shop layout and product display. We provide uniform promotional materials to our distributors for distribution by them to the authorized ANTA retail outlets and we work with our distributors to determine appropriate product mixes and product displays for individual stores. We rely on our distributors to implement and enforce such retail policies and guidelines. Please refer to the paragraph headed ‘‘Authorized ANTA retail outlets’’ above. Some authorized ANTA retail outlets have a computerized information management system which records sales, stock levels and other relevant information.

Pricing

We adopt a ‘‘one price’’ rule pursuant to which we sell our products to our distributors at uniform discounts to the suggested retail price. We believe that this ensures fairness and transparency within our distribution network. We set retail price guidelines for ANTA products which must be complied with by all distributors. In 2006, the suggested retail prices of our major products ranged from approximately RMB35 to RMB528 for our footwear, approximately RMB88 to RMB428 for our apparel products and approximately RMB10 to RMB298 for our accessory products. In determining the suggested retail prices of our products, we take into account market supply and demand, cost of production and the prices of competing brands’ products. Authorized ANTA retail outlets are required to follow our pricing policies. Our distributors must obtain our written consent before conducting any promotional events, or selling any of our ANTA products to consumers at a discount to the suggested retail price, and such discounts are generally only permitted for end of season sales or sales to consumers in new markets for our products taking into account local market conditions. The level of any such discount is decided and approved by us on a case-by- case basis.

Store location

We set guidelines for our distributors in respect of the location of authorized ANTA retail outlets within their retail sales network and we require our distributors to obtain our approval of the location of each authorized ANTA retail outlet.

Retail outlet categorization

We divide authorized ANTA retail outlets into three categories, namely street level stores, department store concessions and factory outlets. Each category is further divided into several tiers, with each tier having designated parameters such as size, layout and monthly turnover. For example, the top-tier street level stores must have a floor area of at least 200 square meters and achieve a minimum monthly turnover of RMB500,000, while the top-tier department store concessions must have a floor area of at least 150 square meters and achieve a minimum monthly turnover of RMB300,000. We progressively lower the criteria for each subsequent tier. Our annual expansion plans specify the number and the type of stores to be established by our distributors and their appointed authorized ANTA retail outlet operators in a given sales region.

Training and support

We believe training is a key factor in establishing an effective ANTA sales network and implementing consistent customer service standards. All newly recruited employees in our sales department are required to participate in training programs to learn basic information about our Company and the skills needed in his or her particular job. We believe that such training equips them with skills and knowledge to provide better support to our distributors.

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Sales Returns

We adopt a sales return policy pursuant to which products may be returned for reasons related to product quality defects in accordance with the applicable laws and regulations of the PRC. During the Track Record Period, we recorded no sales returns from our distributors to us for aged or obsolete inventories or for any other reasons and no material claim has been brought against us for product defects or any other reason.

Credit control

We generally grant credit periods of between 30 to 90 days to our distributors based on their creditworthiness and credit history. Our distributors generally settle their purchases within 90 days from the date of issue of an invoice. In the past, we typically received sales proceeds from department stores within 30 days for ANTA products we sold directly to these department stores. Purchases by sole proprietors were settled in cash upon their collection of our ANTA products. Since January 2007, we no longer sell ANTA products directly to department stores or sole proprietors.

Logistics

We do not maintain any delivery team or delivery vehicles. Finished products supplied by our contract manufacturers are directly delivered to us, and upon satisfactory inspection by our quality control staff, are sent to our warehouse. All of our internally manufactured products are delivered to our warehouse at our Jinjiang facilities. According to our product launch schedule, our distributors collect the products from our warehouse and deliver them to the authorized ANTA retail outlets directly operated or indirectly managed by them at their own cost. Through this arrangement, we are able to minimize our logistics costs.

International sales

We did not sell our products outside the PRC during 2004 and 2005. In 2005 and 2006, certain of our distributors sold a small portion of our products to overseas markets. In 2006, we began selling a small proportion of our products to overseas distributors in countries including Serbia, the Philippines, Hungary and Singapore through domestic import and export agents which are responsible for the export logistics. Such products include our ANTA footwear, apparel and accessory products. We do not expect international sales to make a significant contribution to our total sales in 2007.

INVENTORY CONTROL

We generally procure raw materials and commence production after having confirmed purchase orders with our distributors following our sales fairs. We therefore keep low levels of raw material and finished goods inventories. We have, however, purchased increased quantities of common raw materials in 2006 in anticipation of future sales orders in order to benefit from bulk purchase discounts.

According to our policy, we require our distributors to provide us with weekly sales reports, giving us updated information on their stock levels. This information may assist our distributors to adjust the sales orders they have placed with us and if necessary, we will coordinate with our distributors to reallocate products to regions where demand is present. Our distributors will negotiate between themselves to determine whether to implement any stock reallocation suggested by us and we are not a party to the sales and purchases of our products as a result of any such reallocation. We believe that this system will effectively reduce production inefficiency and inventory buildup at our distributors.

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It is our policy to regularly review the obsolescence of inventories based on the expected future saleability and the age of the inventories. We also carry out physical stock counts from time to time to identify obsolete or damaged goods. Specific provision will be made on an item of inventory if the carrying amount is lower than the net realizable value. During the Track Record Period, we did not make any provisions for inventories.

For the years ended December 31, 2004, 2005 and 2006, our average inventory turnover days was 26, 29 and 42 respectively, while the balance of our inventory as at December 31, 2004, 2005 and 2006 accounted for approximately 8.8%, 13.3% and 18.0%, respectively, of our total assets. Please refer to ‘‘Inventory Analysis’’ in the section headed ‘‘Financial Information’’ of this prospectus.

RESEARCH AND DEVELOPMENT

We believe that technological innovation is key to increasing product quality. Located in our Jinjiang headquarters, our quality and technology center is primarily responsible for conducting our research and development activities. It develops new technologies for ANTA sportswear products. As at March 31, 2007, we had 16 staff members dedicated to research and development, approximately half of whom had experience in the sportswear industry. Over half of our research and development staff have been working for us for over two years. In 2004, our research and development expenditure was recorded as part of our production costs and was not separately accounted for. For the two years ended December 31, 2005 and 2006, our total expenditure for research and development amounted to approximately RMB0.9 million and RMB4.9 million, respectively.

ANTA product development

We have obtained three utility patents for technologies developed for use in our footwear products. These technologies include our ‘‘Magnetic-Core’’ technology, which is designed to increase shock absorption at the heel. Our technologies have been applied to our basketball footwear and running shoes. We are in the process of applying for one invention patent and other utility and design patents for our technologies, such as air permeability technology and ‘‘A-Core’’ shock absorption technology. Our PRC legal adviser, Commerce & Finance Law Offices, has advised that PRC law does not impose a specified period upon the patent administrative organ under the State Council within which it must decide whether to grant the patent for an invention, a utility model or a design after the relevant application has been filed. However, they have advised that, in their experience, in practice, it normally takes approximately three years to obtain a patent certificate for an invention after the relevant application is filed, and approximately one year for a utility model or a design.

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Alliances with scientific and educational institutions

We have established cooperative relationships with scientific and educational institutions including, among others, China Leather & Footwear Industry Research Institute, Beijing Sport University, Ningbo University and Shaanxi Science and Technology University. We cooperate with such institutions in our research and development efforts to improve the functionality of our products. In 2005, we signed cooperative project agreements with RSscan (China) Ltd. to test and improve the biomechanical properties of our basketball footwear and to assist us to research and develop a series of professional basketball footwear. In 2006, we also signed a cooperative development agreement with Shaanxi Science and Technology University under which the university assisted us in the development of a device used to test the air permeability of insoles. In the same year, we contracted Ningbo University to research braking and energy regression in running footwear. Under the terms of most of the cooperation agreements with these institutions, we have the sole ownership of the intellectual property rights to the new technological know- how developed. We agree to pay a fixed fee to these institutions and do not have any profit sharing arrangement with them. The following table shows the major terms of our cooperation with scientific and educational institutions:

Name of Institution China Leather & Beijing Sports Ningbo University RSscan (China) Ltd. Shaanxi Science & Footwear Industry University Technology Research Institute University

Term of Cooperation March, 2005 to May, 2006 to October, 2006 to November, 2005 to October, 2006 to March, 2010 December, 2007 end of project, August, 2007 October, 2011 which is expected to be around October, 2007

Scope of Research and Establishment of 1. Complete 1. Allocation of 1. Structure test of Conduct joint Development technology center biomechanics foot pressure biomechanics research projects testing for ANTA under barefoot for basketball with post-graduate table tennis shoes; condition; shoes students 2. Product 2. Structure for 2. Improvement of improvement for shock-reduction current products injury-prevention from the in respect of and specific analysis of injury- functionality stress in the prevention and human foot specific with a view to functionality reduce foot pressure

Sports science laboratory

We believe science and technology will become increasingly important in the sportswear market. In April 2005, we established a sports science laboratory for the development of new technologies to achieve greater comfort, safety, functionality and performance in our footwear and apparel. As at March 31, 2007, we had four staff members working in this laboratory, who hold bachelor’s degrees or are currently enrolled in bachelor’s degree programs in science disciplines. The laboratory places its primary emphasis on basketball, running and table tennis footwear. This laboratory has the capability to take measurements and force readings of an athlete’s foot in motion and to make customized footwear for professional basketball players.

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From its establishment to March 31, 2007, our sports science laboratory had carried out the following projects.

. Conducted athletic biomechanics testing on basketball and table tennis footwear

. Completed analysis for double ‘‘A-Core’’ shock absorption technology

. Established data bank for footprints of athletes of the Chinese Basketball Association

QUALITY CONTROL

We have established a strict quality control system and quality standards. We also undertake quality control measures and from time to time conduct on-site inspections at our production facilities and those of our contract manufacturers in respect of different stages of production, from raw materials procurement to finished product testing, to ensure that our products meet our internal standards as well as national and industry standards. During the Track Record Period, we experienced a reduction in the defective rates in our footwear production from approximately 0.28% in 2004 to approximately 0.25% and 0.22% in 2005 and 2006, respectively.

Raw materials

Our strict supplier selection criteria is our first step to ensuring ANTA product quality. We also conduct sampling tests of raw materials and other components to ensure they meet our quality standards. Raw materials or components that fail to meet our standards are returned to the supplier for replacement.

Design prototypes

Prior to large scale production, new prototype products are tested for design defects, functional deficiencies and suitability of materials. A pilot production run is also carried out before mass production begins in order to identify potential production problems.

Production

On-site quality control staff conduct inspections at each major stage of our production process. Production components and semi-finished products are examined throughout the production process at each quality control point to ensure compliance with our standards and requirements.

Finished products

Our finished products undergo various quality control sampling tests to assess their quality and functionality. Depending on product type, we test bend resistance, abrasion resistance, waterproofing, adhesive application, temperature tolerance, softness, appearance and other qualities.

We have entered into agreements with national and provincial authorities to assist them in setting national standards for the sportswear industry in the PRC. We obtained ISO9001 quality system certifications for our casual footwear and clothes in 2005. We were also named an ‘‘2004 Advanced Enterprise in Quality Management of Fujian’’ ( ) by the Fujian Provincial Bureau of Quality and Technology Supervision in 2005. Our ANTA sports footwear has been recognized as ‘‘State-designated Products Exempted from Quality Surveillance Inspection’’ ( ) by the General Administration of Quality Supervision, Inspection and Quarantine of the PRC since 2003.

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RETAIL BUSINESS

Introduction

We consider that it is an integral part of our overall business strategy to expand into sportswear retailing in the PRC. We believe entering into retail agreements in respect of well-known international sportswear brands will enable us to further capture the growth potential of the PRC sportswear retail market. As part of our retailing strategy, we have formed a new limited liability company in the PRC, Shanghai Fengxian, in October 2006 to commence our new retail business. Shanghai Fengxian has established five wholly-owned subsidiaries, being Xiamen Fengxian, Suzhou Fengxian, Beijing Fengxian, Harbin Fengxian and Guangzhou Fengxian, to operate and manage our retail business. Currently, we have been authorized to sell adidas and Reebok branded products in China, including footwear, apparel and accessories, and to sell Kappa branded products in Shanghai. To enhance our brand image and increase brand recognition, we also plan to establish and operate our own flagship stores in prime locations to sell our ANTA products. In addition, in the second half of 2007 we plan to open our own retail sports complexes selling sportswear under a variety of brands, including our ANTA brand as well as our authorized brands, including adidas, Reebok and Kappa, and products distributed by other retailers. Under the current contractual agreements with our distributors, there is no restriction preventing us from opening and operating our own flagship stores.

We will liaise closely with our distributors when opening flagship stores in their designated distribution areas. Further, to leverage our distributors’ knowledge of local market conditions, we intend to work closely with our distributors in selecting specific locations for the establishment of ANTA flagship stores. We believe these measures will effectively minimize any negative impact on our distributors’ business. Further, because opening a flagship store requires significant capital investment, and our distributors may not have the financial resources to do so, we believe our opening of ANTA flagship stores will have a positive impact on our distributors’ sales in those areas by enhancing our brand recognition in the local areas where our flagship stores are established. These ANTA flagship stores will be significantly larger than existing authorized ANTA retail outlets and are intended to showcase our latest ANTA product ranges, enhance our brand profile in the local market and give us a platform to test marketing initiatives and gain direct access to consumer feedback. We expect that the total amount of capital investment required for each flagship store will range from approximately RMB1.4 million to RMB2.8 million and we will meet such expenditure using our cash flow from operations. We believe that the adidas, Reebok and Kappa products are targeted at different core consumer groups from our ANTA products and are positioned differently in terms of brand perception and sales prices to our ANTA brand. As such, we believe our new retail business of selling adidas, Reebok and Kappa products will have a different market focus in the PRC sportswear industry from our ANTA products. Please also refer to ‘‘We may not succeed in expanding into the PRC sportswear retail business’’ in the section headed ‘‘Risk Factors’’.

Retail and distributorship agreements in respect of international sportswear brands adidas and Reebok

On December 21, 2006 and March 1, 2007, Shanghai Fengxian entered into retail agreements with Adidas (Suzhou) and Adidas (China), both of which are members of the Adidas Group, to sell all types of sporting goods including footwear, apparel and accessories under the adidas and Reebok brand names managed by the Adidas Group. The adidas retail agreement is initially for a fixed period from January 1, 2007 to December 31, 2009, and the Reebok retail agreement is initially for a fixed period from January 1, 2007 to December 31, 2008. Both Adidas (Suzhou) and Adidas (China) have the right to renew their respective retail agreements for a further period of one year.

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Kappa

On January 1, 2007, Shanghai Fengxian entered into a re-distributorship agreement with Dongzhijie, an authorized sub-distributor of Kappa branded products in the PRC, to sell sporting goods including footwear, apparel and accessories under the Kappa brand in Shanghai. There are no restrictions as to the types of Kappa branded products to be sold under the re-distributorship agreement. The re-distributorship agreement for the Kappa branded products is for a fixed period from January 1, 2007 to December 31, 2007.

Distribution channels

We currently sell adidas, Reebok and Kappa branded products in authorized retail outlets directly operated and managed by us, including street level retail outlets and department store concessions. As at April 30, 2007, we operated and managed 13 retail outlets selling adidas branded products, 15 retail outlets selling Reebok branded products and 12 retail outlets selling Kappa branded products. We currently plan to open a total of approximately 200 to 250 authorized retail outlets to retail adidas, Reebok and Kappa branded products in 2007. However, the number of such stores which we open, their location and size are subject to determination based on the progress of our expansion plans for this business. We have recruited an experienced team of retail management personnel for this new business segment under the supervision of our Group’s senior management.

Logistics

Adidas (Suzhou), Adidas (China) and Dongzhijie are each responsible for the transportation and delivery of our purchase orders for adidas, Reebok and Kappa branded products, respectively, at their own cost to our local warehouses.

Pricing and purchase discounts

Under the respective retail agreements and the re-distributorship agreement, we are authorized to sell adidas, Reebok and Kappa branded products to consumers through authorized retail outlets in the PRC, at the recommended retail prices as stipulated by Adidas (Suzhou), Adidas (China) and Dongzhijie, respectively.

We purchase adidas, Reebok and Kappa branded products from Adidas (Suzhou), Adidas (China) and Dongzhijie, respectively in each case, at a discount to their recommended retail prices. For adidas and Reebok branded products, the actual discount is determined by Adidas (Suzhou) and Adidas (China) and notifiedtousonaquarterlybasis.InrelationtoKappabranded products, the actual discount is specified in the re-distributorship agreement. There is no profit sharing arrangement under the agreements that Shanghai Fengxian has entered into with Adidas (Suzhou), Adidas (China) and Dongzhijie.

Restrictions from selling products of other sportswear brands

We are required to exclusively sell adidas, Reebok or Kappa branded products in authorized retail outlets and are restricted from selling products of other sportswear brands in our retail outlets authorized by Adidas (Suzhou), Adidas (China) and Dongzhijie, respectively. Under the respective retail agreements and the re-distributorship agreement, if we violate this restriction, Adidas (Suzhou), Adidas (China) and Dongzhijie are each entitled to unilaterally terminate their respective agreements with us. Our Company has received confirmations from Adidas (Suzhou), Adidas (China) and Dongzhijie that the restrictions under the retail agreements and re-distributorship agreement do not prohibit the opening of our retail sports complexes and the sales of other branded products including adidas, Reebok and Kappa branded products at such premises.

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Performance targets

Adidas (Suzhou) and Adidas (China) each have the right to determine and inform us of the annual performance targets pursuant to the terms of the respective retail agreements, including the quantity of purchases we may be required to make. If we fail to meet any such annual performance targets, Adidas (Suzhou) and Adidas (China) both have the right to adjust the purchase discounts offered to us for our purchases of adidas and Reebok branded products from them.

Under our re-distributorship agreement with Dongzhijie, we are required to achieve specified targets in 2007 in terms of sales and number and category of stores opened. If we fail to meet these requirements, Dongzhijie may deduct money from our refundable deposits held by them and retain new distributors in the geographical region where we are authorized to sell Kappa branded products. Except for such refundable guarantee deposit paid by Shanghai Fengxian to Dongzhijie pursuant to the terms of the re-distributorship agreement, there are no other fees to be paid among the parties. The re-distributorship agreement with Dongzhijie does not stipulate how Dongzhijie will deduct the refundable guarantee deposit if we fail to meet the relevant targets.

Goods return

Subject to timely notification to Adidas (Suzhou) and Adidas (China), the adidas and Reebok branded products that we purchase from Adidas (Suzhou) and Adidas (China) may be returned within specified time limits, if, after being examined by their inspectors, the returned goods are defective or subject to recall, or if they do not meet their product specifications, and/or the inspectors determine that they conform with their goods return policies. Subject to timely notification, the Kappa branded products that we purchase from Dongzhijie may be returned within specified time limits if they do not meet their product specifications.

Revenue Recognition

We recognize revenue from the sale of adidas, Reebok and Kappa branded products at the point in time when the customer has accepted the products and the related risks and rewards of ownership, provided that the economic benefits will flow to our Group.

COMPETITION

We believe that our ANTA brand is well recognized in the sportswear retail market in the PRC and is competitive in terms of brand recognition, product quality and design, location of authorized ANTA retail outlets, sales network size and service quality. We believe our major competitors include Nike, adidas and Li Ning in terms of brand recognition in the sportswear market and market share in China.

We believe that we are able to maintain our competitiveness because:

. our brand has a high degree of recognition;

. we offer sportswear of high quality and functionality to consumers;

. our distributors have an extensive sales network in which they directly operate or indirectly manage many authorized ANTA retail outlets in prime locations;

. our vertically integrated business model allows us to quickly respond to changes in consumer preferences and fashion trends; and

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. we have strong marketing and promotion capabilities.

We believe that the intense competition in the PRC sportswear industry will continue in the future. We also believe that our strengths and strategies will differentiate us from our competitors. Please refer to the paragraph headed ‘‘Competition in the PRC sportswear industry may adversely affect our brand loyalty and results of operations’’ under the ‘‘Risk Factors’’ section in this prospectus.

EMPLOYEES

As at March 31, 2007, our Group employed 7,243 full-time employees. The following table shows a breakdown of our employees by department as at that date:

Number of employees

ANTA branded sportswear business Managementandadministration...... 221 Production...... 6,016 Salesandmarketing...... 166 Financeandaccounting...... 141 Quality control ...... 244 Design,researchandproductdevelopment...... 206

Subtotal...... 6,994

Retail business Managementandadministration...... 25 Sales...... 209 Financeandaccounting...... 15

Subtotal...... 249

Total:...... 7,243

We provide training to our staff to enhance their technical and product knowledge as well as their knowledge of industry quality standards and work place safety standards.

We have not experienced any significant problems with our employees or disruption to our operations due to labor disputes, nor have we experienced any difficulties in the recruitment and retention of experienced staff. We believe that our Group has a good working relationship with our employees.

DIRECTOR AND STAFF REMUNERATION

We determine the remuneration of our staff based on factors such as qualifications and years of experience. Our staff costs (including Directors’ and senior management’s emoluments) in 2004, 2005 and 2006 were approximately RMB10.6 million, RMB34.3 million and RMB85.1 million, respectively. During the same period, the aggregate of the remuneration paid and benefits in kind granted to our Directors by us and our subsidiaries was approximately RMB67,000, RMB140,000 and RMB487,000, respectively, and our Directors consider that the remuneration paid to our Directors reflected their contributions to the growth of

— 103 — BUSINESS our Group’s business during the same period. Mr. Wu Yonghua decided not to receive any remuneration or other benefits-in-kind from our Group or other parties in respect of his role in our Group during the Track Record Period.

PROPERTIES AND FACILITIES

Land and buildings

As at April 30, 2007, we owned:

. four parcels of land located in Jinjiang, Fujian Province with an aggregate site area of approximately 108,881 square meters and 11 buildings on such land, comprising a factory building, an office building, a warehouse, four staff quarters buildings and other ancillary buildings with an aggregate gross floor area of approximately 127,937 square meters. We have obtained legal title to the land and buildings comprising this property. Details of these properties are set out in valuation certificate no. 1 in the property valuation report set out in Appendix IV to this prospectus.

. one parcel of land located in Changting County, Fujian Province with a site area of approximately 43,290 square meters and eight buildings on such land, comprising four factory buildings, an office building, two staff quarters buildings and other ancillary buildings with an aggregate gross floor area of approximately 44,516 square meters. Details of these properties are set out in valuation certificate no. 3 in the property valuation report set out in Appendix IV to this prospectus.

. one residential unit located in Guangzhou City as a staff dormitory with a gross floor area of approximately 369 square meters. We have obtained legal title to this residential unit. Details of this property are set out in valuation certificate no. 2 in the property valuation report set out in Appendix IV to this prospectus.

Leased properties

As at April 30, 2007, we leased:

. Beijing, Guangzhou, Harbin, Hong Kong, Shanghai, Suzhou and Xiamen

We leased ten offices in Beijing, Guangzhou, Harbin, Shanghai, Suzhou, Xiamen and Hong Kong with a total gross floor area of approximately3,174squaremetersandwealsoleasedsix residential units for staff quarters in Guangzhou with a total gross floor area of approximately 1,045 square meters. We also leased five retail shops in Shanghai and Suzhou with a total gross floor area of approximately 892 square meters. Details of these properties are set out in valuation certificate nos. 4 to 6 and 9 to 23 in the property valuation report set out in Appendix IV to this prospectus.

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. Jinjiang

Anhai Shoe Sole Production Facility

We leased three buildings located at Anhai Town, Jinjiang City, Fujian Province with a total gross floor area of approximately 11,715 square meters to house our shoe sole production facilities. These facilities commenced operation in the second half of 2005 and the costs related to these facilities accounted for approximately 10.1% and 49.6% of our Group’s total cost of sales related to shoe sole production for the two years ended December 31, 2005 and 2006.

The landlord of this property, Fujian Light Industrial, is a Connected Person. Fujian Light Industrial has obtained the State-owned Land Use Right Certificate and Building Ownership Certificate for the buildings located at Anhai Town for a land use term up until November 28, 2055. We have obtained a confirmation letter from the Jinjiang City Planning and Real Estate Administrative Bureau which confirmed that the authority did not have a procedure for the lease registration in Jinjiang City, Fujian Province. Therefore, we are not able to register this lease in accordance with applicable laws and regulations in the PRC. Our PRC legal adviser, Commerce & Finance Law Offices, has confirmed that the failure to register the lease will not affect the legality and validity of the lease, and the lease is legal, valid and enforceable under PRC laws and regulations.

In view of the fact that (i) a valid long term Land Use Right Certificate for the properties at Anhai Town has been obtained by Fujian Light Industrial; (ii) our PRC legal adviser, Commerce and Finance Law Offices, has confirmed that the lease is legal, valid and enforceable under PRC laws and regulations; and (iii) the lease has a term of meaningful duration, our Directors consider that the properties at Anhai Town mentioned above are in compliance with the Stock Exchange’s announcement dated March 25, 1998 on leased properties and relevant listing decisions.

Details of these properties are set out in valuation certificate no. 8 in the property valuation report set out in Appendix IV to this prospectus.

Chendai Footwear Production Facility

We leased four buildings located at Chendai Town, Jinjiang City, Fujian Province with a total gross floor area of approximately 11,695 square meters to house three of our footwear production lines. These three production lines were operated by ANTA Fujian during 2004, 2005 and until July 2006, when they were transferred to ANTA China pursuant to the Corporate Reorganization. For the three years ended December 31, 2004, 2005 and 2006, the turnover recorded by our Group in relation to the production by Chendai footwear production facility was approximately RMB217.4 million, RMB102.5 million and RMB106.2 million, respectively, accounting for approximately 69.8%, 15.3% and 8.5% of our total sales during the same period. This facility also recorded total profits of approximately RMB5.7 million, RMB3.4 million and RMB7.1 million, respectively during the same period and its profits in 2005 and 2006 accounted for approximately 7.0% and 4.8% of our total profits in those two years. Details of these properties are set out in valuation certificate no. 7 in the property valuation report set out in Appendix IV to this prospectus.

Our Controlling Shareholders will indemnify us against any loss, damages and other costs as a result of any interruption to our operation if we are required by the authorities to find alternative premises and the fees and costs related to our moving to such alternative premises.

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As the landlords of certain of our leased properties referred to above are Connected Persons, please also refer to the section headed ‘‘Connected Transactions’’ for details of the relevant leases.

For further information about our owned and leased properties, please refer to the property valuation report prepared by CB Richard Ellis as set out in Appendix IV to this prospectus.

INTELLECTUAL PROPERTY RIGHTS

We currently use the ANTA brand for the marketing and sales of our ANTA sportswear products.

ANTA brand

As at the Latest Practicable Date, the ANTA brand was in the process of being transferred from ANTA Fujian to our Group. We were granted irrevocable licenses by ANTA Fujian to use the ANTA brand at nil consideration pending completion of the transfer. For more information, please see the paragraph headed ‘‘Intellectual Property Rights of our Group’’ in Appendix VI to this prospectus.

Patents and domain names

As part of the Corporate Reorganization, various patents relating to our business were transferred from Mr. Ding Shizhong to our Group. We currently own our domain names. For details, please refer to paragraph headed ‘‘Intellectual Property Rights of our Group’’ in Appendix VI to this prospectus.

During the Track Record Period, we requested the invalidation of two patent applications for a sole and an insole made by third parties in violation of our patent rights and our applications were supported by the Patent Re-examination Board of State Intellectual Property Office of the PRC.

Protection of Intellectual Property

We recognize the importance of protecting and enforcing our intellectual property rights. ANTA staff are subject to confidentiality agreements and there has been no action taken against employees for breach of such confidentiality agreements. Appropriate actions will be taken to defend our Company’s brand if any infringement of our intellectual property rights is found. In addition, we intend to apply for the intellectual property rights to any new technological know-how developed under our cooperation with scientific and educational institutions. During the Track Record Period, the registration of three of our trademarks in the PRC was opposed by third parties. The Trademark Office of the State Administration for Industry and Commerce overruled such opposition and approved the registration of our trademarks.

During the Track Record Period, we encountered incidents of counterfeit products and we reported such cases to the relevant government authorities so that they could take enforcement actions against the party liable for such counterfeit products. The enforcement actions taken by the relevant authorities at times involved legal proceedings against the wrongdoer, penalties of imprisonment and fines. Please refer to the paragraph headed ‘‘Our business could be adversely affected by intellectual property rights disputes or proceedings with third parties for possible infringement of their intellectual property rights’’ under the section headed ‘‘Risk Factors’’ for details of the risks we may encounter for counterfeit products discovered in the market.

Save as disclosed above, no claim or dispute has been brought against us in relation to any infringement of the trademarks, copyrights, patents or other intellectual property rights of other third parties during the Track Record Period.

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ENVIRONMENTAL AND SAFETY MATTERS

Environmental matters

We are subject to PRC environmental laws and regulations, which include the Environmental Protection Law of the PRC ( ), Law of the PRC on the Prevention and Control of Water Pollution ( ), Law of the PRC on the Prevention and Control of Atmospheric Pollution ( ), Law of the PRC on the Prevention and Control of Pollution From Environmental Noise ( ), Law of the PRC on the Prevention and Control of Environmental Pollution by Solid Waste ( ). These laws and regulations govern a broad range of environmental matters, including air pollution, noise emissions and water and waste discharge.

According to these environmental laws and regulations, all business operations that may cause environmental pollution and other public hazards are required to incorporate environmental protection measures into their plans and establish a reliable system for environmental protection. These operations must adopt effective measures to prevent and control pollution levels and harm caused to the environment in the form of waste gas, waste water and solid waste, dust, malodorous gas, radioactive substances, noise, vibration and electromagnetic radiation generated in the course of production, construction or other activities.

Companies are also required to carry out an environment impact assessment before commencing construction of production facilities and install pollution treatment facilities which should meet the relevant environmental standards and to treat pollutants before discharge. During the Track Record Period, we have fully complied with the relevant environmental laws and regulations. We have carried out the relevant environment impact assessments before commencing construction of our production facilities and have obtained all the required permits and environmental approvals for our production facilities.

We were granted an environmental compliance certificate from the Jinjiang Environmental Protection Bureau for complying with its environmental protection standards. In 2005, we also obtained the ISO 14001 environmental certification for our footwear design, development and production processes, sales management, and other management activities. Commerce & Finance Law Offices, our PRC legal adviser, has confirmed that during the Track Record Period, (i) we fully complied with the relevant environmental rules and regulations and have obtained all the required permits and environmental approvals for our production facilities, (ii) no environmental pollution incident was discovered; and (iii) no penalty of any kind was imposed on any member of our Group.

The following table sets out our annual expenditure during the Track Record Period in respect of regulatory compliance with applicable environmental protection requirements in the PRC:

For the year ended December 31, 2004 2005 2006 RMB (’000) RMB (’000) RMB (’000)

Environmental compliance certification — 49 36 Pollution emission charge — 14 5 Flood prevention charge 190 448 536

Total 190 511 577

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As we do not produce material quantities of industrial waste in our production and our Directors do not anticipate that our production would produce any material quantities of industrial waste in the future, other than the expenses that will be incurred for compliance with the current environmental laws and regulations, we have not allocated additional resources to new technology or conducting research and development to reduce our impact on the environment.

Our Directors confirm that we comply with the relevant requirements under the PRC laws and regulations for waste water treatment. We do not produce material waste during our production. In order to ensure that we comply with environmental laws and regulations, we have employed two experienced officers to be responsible for environmental compliance matters, one of whom has over 17 years of production experience. Currently, neither our customers nor we impose any environmental compliance requirements as conditions for placing orders with us or with our contract manufacturers. See ‘‘Production — Production outsourcing’’ above.

Our Directors consider that our production process does not involve substantial creation of polluting materials and our operation is not subject to any future environmental risk. We will ensure compliance with applicable environmental laws and regulations in the future by (i) enhancing the environment protection team to oversee and implement our environment protection and compliance, (ii) conducting on-site inspection regularly and providing relevant training to our staff, and (iii) reporting to and coordinating with competent authorities immediately in the case any incident or non-compliance arises.

Labor and safety matters

We are also subject to various labor and safety laws and regulations in the PRC including the PRC Labor Law ( ), the PRC Production Safety Law ( ), the Regulation of Insurance for Labor Injury ( ), the Unemployment Insurance Law ( ), the Provisional Insurance Measures for Maternity of Employees ( ), Interim Provisions on Registration of Social Insurance ( ), Interim Regulation on the Collection and Payment of Social Insurance Premiums ( ) and other related regulations, rules and provisions issued by the relevant governmental authorities from time to time for our operations in the PRC.

AccordingtothePRCLaborLaw( ), labor contracts shall be concluded if labor relationships are to be established between our employees and members of our Group. We must provide wages which are no lower than local minimum wage standards to the employees from time to time. We are required to establish a system for labor safety and sanitation, strictly abide by State rules and standards and provide relevant education to our employees. We are also required to provide our employees with labor safety and sanitation conditions meeting State rules and standards and carry out regular health examinations of our employees engaged in hazardous occupations.

The PRC Production Safety Law ( ) (the ‘‘Production Safety Law’’) requires that we shall maintain conditions for safe production as provided in the Production Safety Law and other relevant laws, administrative regulations, national standards and industrial standards. Any entity that is not sufficiently equipped to ensure safe production may not engage in production and business operation activities. We are required to offer education and training programs to our employees regarding production safety. The design, manufacture, installation, use, checking and maintenance of our safety equipment is required to conform with applicable national or industrial standards. In addition, we are required to provide labor protection equipment that meets the national or industrial standards to our employees and to supervise and educate them to wear or use such equipment according to the prescribed rules.

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As required under Regulation of Insurance for Labor Injury ( ), Provisional Insurance Measures for Maternity of Employees ( ), Interim Regulation on the Collection and Payment of Social Insurance Premiums ( ) and Interim Provisions on Registration of Social Insurance ( ), we are obliged to provide our employees in the PRC with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, injury insurance and medical insurance.

We make efforts to ensure the safety of our employees. Our Directors confirm that the design, installation, use and maintenance of our equipments all meet national and industrial standards. We implement safety guidelines and operating procedures for our production processes, and provide employees with occupational safety education and training to enhance their awareness of safety issues. We provide and require our employees to wear suitable protective devices to ensure their safety. We also provide our employees with free annual medical check-ups.

During the Track Record Period, we complied with all applicable labour and safety laws and regulations in all material respects, and strictly implemented internal safety guidelines and operating procedures. Since the commencement of our business, none of our employees has been involved in any major accident in the course of their employment and we have never been subject to disciplinary actions with respect to the labor protection issues.

Our PRC legal adviser, Commerce & Finance Law Offices, has confirmed that our Group will not be responsible for breach of laws, rules and regulations by our contract manufacturers and suppliers. Furthermore, our Directors confirmed that our Group had not been held liable for breach of laws rules and regulations by our contract manufacturers and suppliers during the Track Record Period. See ‘‘Production — Production outsourcing’’ above.

INSURANCE

Our insurance coverage includes employee social insurance and property insurance. We have made contributions in relation to the retirement of our employees in accordance with applicable laws and regulations in the PRC which requires contribution by both our employees and us at a fixed percentage of the salaries of our employees.

None of the members of our Group maintains general product liability insurance for any of our products. Nevertheless, we believe that our practice is in line with the general practice in the PRC as product liability insurance is not required under PRC law. During the Track Record Period, we have not received any material claim from customers and/or consumers relating to any liability arising or relating to the use of our products which have resulted in significant negative publicity for our Group.

LEGAL COMPLIANCE AND PROCEEDINGS

As at the Latest Practicable Date, we were not engaged in any litigation, arbitration or claim of material importance, and no litigation, arbitration or claim of material importance is known to our Directors to be pending or threatened by or against us, that would have a material adverse effect on our operating results or financial condition. Commerce & Finance Law Offices, our Company’s PRC legal adviser, has confirmed that we have obtained all licences, permits and certificates necessary to conduct our operations and our operations comply with all the relevant rules and regulations of the relevant authorities where we operate.

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GOVERNMENT REGULATIONS

PRC regulations relating to wholesale or retail business

The principal PRC law governing foreign investment in retail enterprises is the Administrative Measures on Foreign Investments in Commercial Sectors ( ) (the ‘‘Measure’’) which was promulgated by the Ministry of Commerce on April 16, 2004.

Pursuant to the Measure, which took effect from June 1, 2004, foreign investors are permitted to engage in the operation of distribution services on a wholly-owned basis from December 11, 2004. Foreign investors can apply to set up both commercial enterprises and stores at the same time in accordance with the procedures and guidelines under the Measure.

To further simplify the approval procedures for foreign investment in commercial sectors, the Ministry of Commerce issued the Notice of the Ministry of Commerce on Entrusting Local Departments to Examine and Approve Foreign Invested Commercial Enterprises ( ) (the ‘‘Notice’’) on December 9, 2005 which entrusts the administrative departments of commerce at the provincial level to examine and approve the foreign invested commercial enterprises. The Notice took effect from March 1, 2006.

In accordance with the Notice, the provincial commercial department is entitled to examine and approve an application by a foreign investor to open stores within its provincial administrative region or national economic and development zone if any one of the following conditions is satisfied: (a) the area of a single store to be opened does not exceed 5,000 square meters and the total number of stores does not exceed three within that region or national economic and development zone and the total number of the same type of stores to be opened throughout China by the applicant does not exceed thirty; or (b) the area of a single store does not exceed 3,000 square meters and the total number of stores does not exceed five within that region or national economic and development zone; and the total number of the same type of stores to be opened throughout China does not exceed fifty; or (c) the area of each single store does not exceed 300 square meters. Approvals from the Ministry of Commerce of the PRC should be obtained if the size and the number of stores to be opened by a foreign investor exceed the afore-mentioned threshold.

As at April 30, 2007, we operated and managed 13 retail outlets selling adidas branded products, 15 retail outlets selling Reebok branded products and 12 retail outlets selling Kappa branded products. With regard to the establishment of Shanghai Fengxian and its subsidiaries and their opening of retail outlets in the PRC, two consultations were made by our Company’s PRC legal adviser, Commerce & Finance Law Offices, on March 26, 2007 with the possible relevant competent commercial authorities, namely the Shanghai Foreign Economic Relation & Trade Commission ( )andXiamen Foreign Investment Bureau ( ), both of which were of the view that no approval was required. Our Company and its PRC legal adviser, Commerce & Finance Law Offices, has confirmed that there is no explicit legal requirement for any approval from the competent commercial authorities for the establishment of Shanghai Fengxian or its opening of retail outlets under PRC laws. In addition, Commerce & Finance Law Offices, the PRC legal advisor of our Company, has confirmed that our Group has not failed to obtain relevant permits and approvals for opening retail outlets up to the Latest Practicable Date. However, they have advised that the possibility exists that competent commercial authorities in the PRC may require Shanghai Fengxian and its subsidiaries to effect the examination and approval procedures in respect of their retail operations. Our Company and its PRC legal adviser, Commerce & Finance Law Offices, are of the opinion that there exists no legal obstacle for Shanghai Fengxian and its subsidiaries to effect and complete the relevant examination and approval procedures if the Measures are applied. Please refer to ‘‘Any change in the laws and regulations in relation to the retail industry in the PRC may intensify competition in the PRC retail industry, which may adversely affect our expansion into the sportswear retail

— 110 — BUSINESS business and our operating results’’ and ‘‘We may be required to obtain additional approval from the PRC authorities for the operation of our retail business and failure to obtain such approval will adversely affect our retail business’’ in the ‘‘Risk Factors’’ section of this prospectus.

PRC Laws on consumer protection and product quality

Our business operations and our products are subject to the Consumer Protection Law of the PRC ( ) (the ‘‘Consumer Law’’) and the Product Quality Law of the PRC ( ) (the ‘‘Quality Law’’).

The Consumer Law was enacted on October 31, 1993 and came into effect on January 1, 1994. According to the Consumer Law, the rights and interests of consumers who buy or use commodities for the purpose of consumption or those who receive services are protected, and all manufacturers and distributors are required to ensure that their products and services will not cause personal or property damage.

The Quality Law was promulgated on February 22, 1993 and amended on July 8, 2000. The Quality Law is applicable to the production and sale of any product within the PRC, and producers and sellers shall be liable for any failure of their products to meet quality standards in accordance with the Quality Law.

Our Directors have confirmed that our Group’s products complied with national and local quality standardsduringtheTrackRecordPeriod.

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CONTROLLING SHAREHOLDERS

Immediately after completion of the Global Offering and the Capitalization Issue, the Controlling Shareholders will control the exercise of voting rights of 75% of the Shares eligible to vote in the general meeting of our Company (assuming the Over-allotment Option is not exercised). In addition to their interests in our Company, the Controlling Shareholders also had interests in the following companies (the ‘‘Retained Businesses’’) as at the Latest Practicable Date which (i) held interests in our business during the Track Record Period and ceased to hold such interests after the Corporate Reorganization; or (ii) may, directly or indirectly, compete with our Group’s business.

ANTA Fujian and Jinjiang Shifa

ANTA Fujian was incorporated on July 30, 1994 under the laws of the PRC. As at the Latest Practicable Date, the registered capital of ANTA Fujian was held as to 40% by Mr. Ding Siren under his trade name (On Tap Enterprise Co.*) and as to 60% by Jinjiang Shifa. Jinjiang Shifa was incorporated on April 6, 1988 under the laws of the PRC. Jinjiang Shifa was engaged in the business of manufacturing footwear before 2002. As at the Latest Practicable Date, Jinjiang Shifa was owned as to 60% by Mr. Ding Hemu (father of Mr. Ding Shizhong), 10% by Mr. Ding Shizhong, 10% by Mr. Ding Shijia (brother of Mr. Ding Shizhong), 10% by Ms. Ding Youmian (spouse of Mr. Ding Shizhong) and 10% by Ms. Ding Liming (spouse of Mr. Ding Shijia). The equity interests in ANTA Fujian were held on trust for the Controlling Shareholders through a trust arrangement. Please refer to the section headed ‘‘History and Corporate Structure’’ in this prospectus for details of the trust arrangement. ANTA Fujian formed part of our GroupduringtheTrackRecordPeriodandpursuanttotheCorporate Reorganization, it transferred all of its production facilities and trademarks related to our business to ANTA China. After the transfer, ANTA Fujian ceased all its operation in the sportswear business. As at the Latest Practicable Date, other than its investment in a local newspaper, ANTA Fujian did not operate any other businesses.

Jinjiang Shifa is an investment holding company of the Controlling Shareholders. As at the Latest Practicable Date, its only business was to hold a 60% equity interest in ANTA Fujian and a property at Chendai, Jinjiang, Fujian, which was leased to our Group to house three of our 15 footwear production lines. Since we intend to locate all of our footwear production lines at our Jinjiang facilities in the future, the property was not transferred to us and we entered into a lease agreement with Jinjiang Shifa. Please refer to the section headed ‘‘Connected Transactions’’ for further details of this lease.

Changting Sports

Changting Sports was incorporated on May 20, 2004 under the laws of the PRC and is owned as to 50% by Mr. Ding Shijia and 50% by Mr. Wang Wenmo, both of whom are our executive Directors. In addition to our independent apparel contract manufacturers, we engaged Changting Sports for the production of a portion of our apparel products because of its geographical proximity to us and because it met our selection criteria for apparel contract manufacturers. Our purchases from Changting Sports were approximately RMB3.5 million, RMB15.2 million and RMB10.9 million respectively, accounting for approximately 9.1%, 9.2% and 3.6%, respectively, of our cost of sales of apparel outsourcing during the Track Record Period. In addition, we sold some raw materials to Changting Sports for approximately RMB26.8 million for the production of our apparel products in the year ended December 31, 2006.

During the Track Record Period, we also authorized Changting Sports to sell small quantities of our ANTA products directly to our distributors to meet supplemental orders from our distributors in addition to the orders we received from our distributors during our seasonal sales fairs. For the three years ended December 31, 2004, 2005 and 2006, Changting Sports sold approximately RMB1.5 million, RMB2.2 million and RMB36.3 million worth of our ANTA products directly to our distributors, respectively.

— 112 — RELATIONSHIP WITH CONTROLLING SHAREHOLDERS

Changting Sports adopted our pricing policy for our ANTA products in its direct sales to our distributors. Our Directors confirmed that other than sales to our Group, Changting Sports has made no sales of our ANTA products since January 1, 2007 and no such sales will be made after the Listing. We did not share any profit from Changting Sports in relation to its sales of our ANTA products directly to our distributors. During the Track Record Period, none of our other independent apparel contract manufacturers sold our ANTA products directly to our distributors. We considered such supplemental orders were more efficiently handled by Changting Sports. According to the financial statements of Changting Sports for the year ended December 31, 2006, which were audited in accordance with generally accepted accounting principles in the PRC, Changting Sports recorded a turnover of approximately RMB47.2 million and a gross profit of approximately RMB4.8 million in 2006. Changting Sports recorded a gross profit margin of approximately 10.2% and a net profit margin of approximately 8.9% respectively during the same period.

Changting Sports does not form part of our Group since we have established new apparel production facilities at Changting and Xiamen. Changting Sports ceased its business operation in April 2007 and became dormant and is pending dissolution.

As required under the Listing Rules, the relevant Directors will continue to disclose in our annual report after the Global Offering their interests in ChangtingSportsandanychangeinsuchinterests.

Independence of our Group from the Controlling Shareholders

In the course of our business operations, we enter into transactions with entities controlled by our Controlling Shareholders which provide packaging materials to us and lease certain properties to us which we use for our production of footwear and shoe soles and office use, all pursuant to agreements entered into on an arm’s length basis. Our Directors confirm that the terms and conditions of these agreements are fair and reasonable and on normal commercial terms and these agreements will be subject to the requirements of the Listing Rules. Please refer to the section headed ‘‘Connected Transactions’’ for further details of these agreements. Having considered the following factors, we are satisfied that we can carry on our business independently of the companies controlled by our Controlling Shareholders (other than our Group) after the Global Offering.

Management independence

Our Board comprises five executive Directors and three independent non-executive Directors. The following table sets out details of the directorships held by two of our executive Directors in the Retained Businesses:

Director Retained Business Business Nature of such company

Mr.DingShizhong..... ANTAFujian Investmentholding

Mr. Ding Shijia...... ChangtingSports Dormant

Save as disclosed above, no other Director holds any directorship in the Retained Business.

Each of our Directors is aware of his fiduciary duties as a Director of our Company which require, among other things, that he acts for the benefit and in the best interests of our Company and does not allow any conflict between his duties as a Director and his personal interest. In the event that there is a potential conflict of interest arising out of any transaction to be entered into between our Group and our Directors or their respective associates, the interested Director(s) shall abstain from voting at the relevant board

— 113 — RELATIONSHIP WITH CONTROLLING SHAREHOLDERS meetings of our Company in respect of such transactions and shall not be counted in the quorum. We also have an independent senior management team, none of whom have any management role in the Retained Businesses.

Having considered the above factors, our Directors are satisfied that they are able to perform their roles in our Company independently, and our Directors are of the view that we are capable of managing our business independently from the Retained Businesses after the Global Offering.

Operational independence

Our Directors believe that we operate independently from the Retained Businesses. After the transfer of its production facilities and trademarks related to our business to ANTA China, ANTA Fujian ceased its operation in the sportswear business. Jinjiang Shifa is the holding company of ANTA Fujian. Apart from the lease of the premises situated in Andou Industrial Zone, Chendai, Jinjiang, Fujian which house three of our footwear production lines, Jinjiang Shifa does not carry on any other business. Please refer to the section headed ‘‘Connected Transactions’’ for details of such lease. Since we have 12 footwear production lines at Dongshan Industrial Zone, Chidian, Jinjiang, Fujian, five of which were added in 2007, our Directors consider that our operations do not depend on the operations of ANTA Fujian or Jinjiang Shifa.

As part of the Corporate Reorganization, ANTA Fujian and Mr. Ding Shizhong transferred all trademarks and patents registered in their respective names or for which they were applying for registration relating to our business to us at nil consideration. The transfers of patents were completed in May 2007. Because the administrative procedures for the transfer of all trademarks related to our business from ANTA Fujian to us were not expected to be completed prior to the Listing, ANTA Fujian granted us irrevocable licenses to use such trademarks at nil consideration pending completion of the administrative procedures for transfer. The transfers of some of such trademarks was completed in June 2007. Please refer to the section headed ‘‘Connected Transactions’’ of this prospectus for details of the license. Since the license is irrevocable and is only an interim measure pending completion of the relevant transfers to us, our Directors consider that our operations do not rely on ANTA Fujian for the rights to use such trademarks.

Independent Access to Sources of Raw Materials and Customers

We have independent access to the sources of our major raw materials for the production of our ANTA products and we do not rely on our Controlling Shareholders for the provision of such major raw materials. We will continue to source packaging materials from an entity controlled by the Controlling Shareholders but these transactions are immaterial to our sourcing of major raw materials. We also have independent access to our customers, including the distributors of ANTA products and end users of the products which we sell in our retail business, which, save as disclosed in the section headed ‘‘Business — Relationship with our Distributors’’ in this prospectus, are independent from our Controlling Shareholders.

Financial independence

We have an independent financial system and make financial decisions according to our own business needs. Our Directors confirm that as at the Latest Practicable Date, loans provided by our Controlling Shareholders to us have been either settled in full or capitalized. Therefore, there is no financial dependence on the Controlling Shareholders.

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NON-COMPETE UNDERTAKING

Each of the Controlling Shareholders (together, the ‘‘Non-competing Covenantors’’) have entered into a deed of non-competition (the ‘‘Non-competition Deed’’) in favor of our Company, pursuant to which each of the Non-competing Covenantors has undertaken to our Company (for itself and for the benefit of its subsidiaries) that he or she would not, and would procure that his or her associates (except any members of our Group) would not, during the restricted period set out below, directly or indirectly, either on his or her own account or in conjunction with or on behalf of any person, firm or company, among other things, carry on, participate or be interested or engaged in or acquire or hold (in each case whether as a shareholder, partner, agent, employee or otherwise) any business which is or may be in competition with the business of any member of our Group from time to time (the ‘‘Restricted Business’’). Such non-competition undertaking does not apply where:

(a) any opportunity to invest, participate, be engaged in and/or operate with a third party any Restricted Business has first been offered or made available to our Company, and at the request of our Company, the offer should include: (i) terms of offer between our Company and such third party, or (ii) terms for our Company to engage in the Restricted Business with the Non- competing Covenantors (or any of them) and/or on their associates, and our Company, after review and approval by the independent non-executive Directors, has declined such opportunity to invest, participate, be engaged in or operate the Restricted Business with such third party or together with Non-competing Covenantors (or any of them) and/or their associates, provided that the principal terms by which any Non-competing Covenantor (or his or her relevant associate(s)) subsequently invests, participates, engages in or operates the Restricted Business are not more favorable than those disclosed to our Company; or

(b) having interests in the shares of a company which shares are listed on a recognized stock exchange provided that:

(i) any Restricted Business conducted or engaged in by such company (and assets relating thereto) accounts for less than 10% of that company’s consolidated turnover or consolidated assets, as shown in that company’s latest audited accounts; or

(ii) the total number of the shares held by the Non-competing Covenantors and/or their respective associates in aggregate does not exceed 5% of the issued shares of that class of the company in question and such Non-competing Covenantors and/or their respective associates are not entitled to appoint a majority of the directors of that company and at any time there should exist at least another shareholder of that company whose shareholdings in that company should be more than the total number of shares held by the Non-competing Covenantors and their respective associates in aggregate.

If our Company decides and offers to invest, participate, be engaged in and/or operate any Restricted Business with the Non-competing Covenantors and/or their associates (or any of them, as the case may be), pursuant to (a) above, the Non-competing Covenantors and/or their associates can invest, participate, be engaged in and/or operate such Restricted Business with our Company. Our Company will comply with the requirements of the Listing Rules in case of such cooperation with the Non-competing Covenantors and/or their associates (or any of them, as the case may be).

The ‘‘restricted period’’ stated in the Non-competition Deed refers to the period during which (i) the SharesofourCompanyremainlistedontheStockExchange;and(ii)inrelationtoeachNon-competing Covenantor, he/she or his/her associate holds an equity interest in our Company and (iii) the relevant Non-

— 115 — RELATIONSHIP WITH CONTROLLING SHAREHOLDERS competing Covenantors and/or their respective associates jointly or severally are entitled to exercise or control the exercise of not less than 30% in aggregate of the voting power at general meetings of our Company.

CORPORATE GOVERNANCE MEASURES

Our Company will adopt the following measures to manage the conflict of interests arising from the competing business and to safeguard the interests of the Shareholders:

(i) the independent non-executive Directors will review, on an annual basis, the compliance with the undertaking by the Controlling Shareholders under the Non-competition Deed;

(ii) the Controlling Shareholders undertake to provide all information requested by our Company which is necessary for the annual review by the independent non-executive Directors and the enforcement of the Non-competition Deed;

(iii) our Company will disclose decisions on matters reviewed by the independent non-executive Directors relating to compliance and enforcement of the undertaking of the Controlling Shareholders, including decisions reached in respect of first rights of refusal referred to in paragraph (a) under ‘‘Non-Compete Undertaking’’ above, under the Non-competition Deed in the annual reports of our Company; and

(iv) the Controlling Shareholders will make an annual declaration on compliance with their undertaking under the Non-competition Deed in the annual report of our Company.

Our Company will adopt the following measures to manage the conflict of interests with Changting Sports:

(i) the Controlling Shareholders will undertake to our Company that Changting Sports will not engage in sports apparel business after Listing; and

(ii) the Controlling Shareholders will undertake to our Company to wind-up Changting Sports as soon as practicable after Listing.

— 116 — CONNECTED TRANSACTIONS

CONNECTED TRANSACTIONS

Members of our Group have entered into certain transactions with parties who are Connected Persons of our Company and the transactions will continue after the Listing, thereby constituting continuing connected transactions of our Company under the Listing Rules. A summary of these continuing connected transactions is set out below:

Applicable Type of Transaction Term Listing Rule Waiver Sought

1. License of trademarks by ANTA From January 17, 2007 Rule 14A.33(3) None (De minimis transaction) Fujian...... until the completion of the transfer of trademarks to our Group 2. Leaseagreementswith:...... Rule14A.35 Exemptionfromthe announcement requirements for the three years ending December 31, 2007, 2008 and 2009 (i) Three years from (Fujian Anda Light February 2, 2007 to Industrial Development Co., February 1, 2010 Ltd.*) (‘‘Fujian Light Industrial’’)...... (ii) JinjiangShifa...... ThreeyearsfromMay3, 2007 to May 2, 2010 (iii) Mr.DingShizhong..... ThreeyearsfromApril 29, 2007 to April 28, 2010 3. Packaging materials supply From July 1, 2007 to Rule 14A.35 Exemption from the agreement with Quanzhou Anda December 31, 2009 announcement and Packaging Co., Ltd. (‘‘Quanzhou independent shareholders’ Anda’’)...... approval requirements for the three years ending December 31, 2007, 2008 and 2009 4. Sportswear sales agreements with From July 1, 2007 to Rule 14A.35 Exemption from the December 31, 2009 announcement and (Guangzhou Anda Trading independent shareholders’ Development Co., Ltd.*) approval requirements for (‘‘Guangzhou Anda’’) and the three years ending (Quanzhou December 31, 2007, 2008 Binhui Trading Co., Ltd.*) and 2009 (‘‘QuanzhouBinhui’’)......

Connected Persons

The relevant Connected Persons, with whom certain members of our Group have entered into continuing connected transactions, are as follows:

(a) Fujian Light Industrial: Fujian Light Industrial is a limited liability company incorporated in the PRC on January 5, 2004 and is owned as to 30% by Mr. Ding Shizhong, 40% by Mr. Lai Shixian and 30% by Mr. Wu Jiabin. Mr. Ding Shizhong and Mr. Lai Shixian are our executive Directors and accordingly Fujian Light Industrial is an associate of Mr. Ding Shizhong and Mr. Lai Shixian respectively under Rule 14A.11 of the Listing Rules and a Connected Person of our

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Company. Mr. Wu Jiabin is an Independent Third Party. The principal business of Fujian Light Industrial is holding equity interests in Quanzhou Anda and a piece of property in Jinjiang, Fujian.

(b) Jinjiang Shifa: Jinjiang Shifa is a limited liability company incorporated in the PRC on April 6, 1988 and is owned as to 60% by Mr. Ding Hemu (father of Mr. Ding Shizhong), 10% by Mr. Ding Shizhong, 10% by Mr. Ding Shijia (brother of Mr. Ding Shizhong), 10% by Ms. Ding Youmian (spouse of Mr. Ding Shizhong) and 10% by Ms. Ding Liming (spouse of Mr. Ding Shijia). Pursuant to an agreement dated May 1, 2002, each of such shareholders agreed to hold their equity interests on trust for Mr. Ding Shizhong. Mr. Ding Shizhong, together with the other members of the Controlling Shareholders, entered into an agreement dated December 1, 2003 under which the respective percentage of beneficial interests of the Controlling Shareholders was reallocated such that Mr. Ding Shizhong and Mr. Ding Shijia, both executive Directors, own a 34.5% and a 34% equity interest in Jinjiang Shifa, respectively. Accordingly, Jinjiang Shifa is an associate of Mr. Ding Shizhong and Mr. Ding Shijia under Rule 14A.11 of the Listing Rules andaConnectedPersonofourCompany.Theonly business of Jinjiang Shifa is the holding of equity interests in ANTA Fujian and a piece of property at Jinjiang, Fujian.

(c) ANTA Fujian: ANTA Fujian is a sino-foreign equity joint venture incorporated in the PRC on July 30, 1994 and is owned as to 60% by Jinjiang Shifa and 40% by Mr. Ding Siren through his trade name (On Tap Enterprise Co.*). Pursuant to an agreement dated May 1, 2002, Mr. Ding Siren assigned all his equity interests in, among others, ANTA Fujian to Mr. Ding Shizhong and agreed to hold such interests on trust for his benefit. Mr. Ding Shizhong, together with the other members of the Controlling Shareholders, entered into an agreement dated December 1, 2003 under which the respective percentage of beneficial interests of the Controlling Shareholders was reallocated such that Mr. Ding Shizhong and Mr. Ding Shijia own a 34.5% and a 34% equity interest in ANTA Fujian, respectively. Accordingly, ANTA Fujian is an associate of Mr. Ding Shizhong and Mr. Ding Shijia under Rule 14A.11 of the Listing Rules and a Connected Person of our Company. ANTA Fujian became an investment holding company after the Corporate Reorganization.

(d) Mr. Ding Shizhong: Mr. Ding Shizhong is our executive Director and is therefore a Connected Person under Rule 14A.11 of the Listing Rules.

(e) Quanzhou Anda: Quanzhou Anda is a sino-foreign equity joint venture incorporated in the PRC on August 10, 2004 and is owned as to 60% by Mr. Ding Shizhong and 40% by Fujian Light Industrial. Accordingly, Quanzhou Anda is an associate of Mr. Ding Shizhong under Rule 14A.11 of the Listing Rules and a Connected Person of our Company. Quanzhou Anda is principally engaged in the manufacture and sales of packaging materials.

(f) Guangzhou Anda: Guangzhou Anda is a limited liability company incorporated in the PRC on June 20, 2005 and is owned as to 50% by Mr. Zheng Jiayuan, 25% by Mr. Ding Qingliang and 25% by Mr. Wu Wenhou. Mr. Ding Qingliang is the brother-in-law of Mr. Ding Shizhong and Mr. Wu Wenhou is the cousin of Mr. Wu Yonghua. Both Mr. Ding Shizhong and Mr. Wu Yonghua are executive Directors and Guangzhou Anda has been deemed by the Stock Exchange to be a Connected Person of our Company under Rule 14A.11(4)(c) of the Listing Rules. Guangzhou Anda is one of our distributors for ANTA products.

(g) Quanzhou Binhui: Quanzhou Binhui is a limited liability company incorporated in the PRC on December 14, 2004 and is owned as to 80% by Mr. Song Lifeng and 20% by Ms. Song Jianming. Mr. Song Lifeng is the brother-in-law of Mr. Wu Yonghua, an executive Director. Quanzhou

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Binhui has been deemed by the Stock Exchange to be a Connected Person of our Company under Rule 14A.11(4)(c) of the Listing Rules. Quanzhou Binhui is one of our distributors for ANTA products.

Exempted Continuing Connected Transactions

The following connected transactions will constitute exempted continuing connected transactions for our Group under Rule 14A.33(3) of the Listing Rules and accordingly, will be exempted from the reporting, announcement and independent shareholders’ approval requirements stipulated under the Listing Rules. Each of the following transactions is undertaken on an arms-length basis and on normal commercial terms or terms more favourable to our Group and the percentage ratios (other than the profit ratio) of each of the following transactions on an annual basis is less than 0.1% or if more than 0.1% is less than 2.5% and the annual consideration is less than HK$1.0 million (equivalent to RMB0.98 million).

1. License of trademarks by ANTA Fujian

As part of the Corporate Reorganization, ANTA Fujian has agreed to transfer all of its trademarks (whether registered in the PRC or overseas) relating to sportswear products to our Group. As at the Latest Practicable Date, the transfers of some of the trademarks had been completed while those of the remaining trademarks were in progress but are not expected to be completed on or before the Global Offering and as a transitional arrangement, ANTA Fujian has granted an irrevocable license to us to use such trademarks.

On January 17, 2007, ANTA China and ANTA Fujian entered into a Trademark License Agreement and a supplemental agreement pursuant to which ANTA Fujian agreed to grant an irrevocable licence to ANTA China to use all of its trademarks (whether registered in the PRC or overseas) relating to sportswear products at nil consideration from January 17, 2007 until the date of completion of the transfer of these trademarks to ANTA China. The license was granted at nil consideration because the costs of registering the relevant trademarks and the promotion of the ANTA brand had been paid by us.

Our Directors, including the independent non-executive Directors, consider that the Trademark License Agreement is on normal commercial terms and in the interests of our shareholders as a whole.

Non-exempt Continuing Connected Transactions

Set out below are the terms of the continuing connected transactions which (i) in respect of transactions with Fujian Light Industrial, Jinjiang Shifa and Mr. Ding Shizhong (in aggregate), are subject to the reporting and announcement requirements under Rules 14A.45 to 14A.47 of the Listing Rules and (ii) in respect of transactions with Quanzhou Anda, Guangzhou Anda and Quanzhou Binhui, are subject to the reporting, announcement and independent shareholders’ approval requirements under Rules 14A.45 to 14A.48 of the Listing Rules (the ‘‘Non-exempt Continuing Connected Transactions’’).

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2. Lease Agreements with Fujian Light Industrial, Jinjiang Shifa and Mr. Ding Shizhong

We have entered into lease agreements with Mr. Ding Shizhong, Fujian Light Industrial and Jinjiang Shifa. Mr. Ding is interested in 30% and 34.5% equity interests in Fujian Light Industrial and Jinjiang Shifa, respectively and under Rule 14A.25 and 14A.26 of the Listing Rules, the rents under the three lease agreements will be aggregated for the relevant classification of the connected transactions.

(i) Lease Agreement with Fujian Light Industrial

On February 2, 2007, ANTA China entered into a lease agreement with Fujian Light Industrial, whereby Fujian Light Industrial agreed to lease to ANTA China for an annual rent of RMB843,480 (equivalent to approximately HK$860,694) premises with an area of approximately 11,715 square meters situated at Wuli Industrial Zone, Anhai Town, Jinjiang, Fujian. We use the premises for the production of shoe soles used in our footwear products. The lease agreement is for a term of three years commencing from February 2, 2007 to February 1, 2010 renewable at the option of ANTA China. Furthermore, a first right of refusal was granted to ANTA China with respect to any future sale of the premises. The purpose of this lease agreement is to enable us to continue to carry out our production of shoe soles at the above premises.

The annual rental is determined at the prevailing market rent for similar premises in the area. CB Richard Ellis, an independent property valuer, has confirmed that the proposed annual rental payable under the lease agreement with Fujian Light Industrial is comparable to the prevailing market rate and is fair and reasonable. Our Directors, including the independent non-executive Directors, consider that the lease agreement is carried out in the ordinary and usual course of business, on normal commercial terms that are fair and reasonable and in the interests of our shareholders as a whole.

As the lease commenced on February 2, 2007, no rent was paid by ANTA China to Fujian Light Industrial during the Track Record Period.

(ii) Lease Agreement with Jinjiang Shifa

On May 3, 2007, ANTA China entered into a lease agreement with Jinjiang Shifa, whereby Jinjiang Shifa agreed to lease to ANTA China for an annual rent of RMB701,725 (equivalent to approximately HK$716,046) premises with an area of approximately 11,695.4 square metres situated in Andou Industrial Zone, Chendai, Jinjiang, Fujian. The lease agreement is for a term of three years commencing from May 3, 2007 to May 2, 2010. The purpose of this lease agreement is to enable us to continue to carry out production of our sports footwear products at the above premises.

The annual rental is determined at the prevailing market rent of similar premises in the area. CB Richard Ellis, an independent property valuer, has confirmed that the proposed annual rental payable under the lease agreement with Jinjiang Shifa is comparable to the prevailing market rate and is fair and reasonable. Our Directors including the independent non-executive Directors consider that the lease agreement is carried out in the ordinary and usual course of business, on normal commercial terms that are fair and reasonable and in the interests of our Shareholders as a whole.

We rented the premises since August 1, 2006 and we accrued approximately RMB292,000 of rentals for the lease of the premises for the year ended December 31, 2006 and approximately RMB234,000 for the period from January 1, 2007 to April 30, 2007.

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(iii) Lease Agreement with Mr. Ding Shizhong

On April 29, 2007 and May 8, 2007, Beijing Fengxian entered into a lease agreement and a supplemental agreement with Mr. Ding Shizhong, whereby Mr. Ding Shizhong agreed to lease to Beijing Fengxian for an annual rent of RMB65,000 (equivalent to approximately HK$66,327) premises with an area of approximately 80 square meters situated at Room 301, Block L, Building 7– 10, No.88 Jianguo Road, Chao Yang District, Beijing. We use the premises as an office for Beijing Fengxian. The lease agreement is for a term of three years commencing from April 29, 2007 to April 28, 2010.

The annual rent is determined at the prevailing market rent for similar premises in the area. CB Richard Ellis, an independent property valuer, has confirmed that the proposed annual rental payable under the lease agreement with Mr. Ding Shizhong is comparable to the prevailing market rate and is fair and reasonable. Our Directors, including the independent non-executive Directors, consider that the lease agreement is carried out in the ordinary and usual course of business, on normal commercial terms that are fair and reasonable and in the interests of our shareholders as a whole.

As the lease commenced on April 29, 2007, no rent was paid by Beijing Fengxian to Mr. Ding ShizhongduringtheTrackRecordPeriod.

Our Directors estimate that the annual value of the aggregate rent under the lease agreements with Mr. Ding Shizhong, Fujian Light Industrial and Jinjiang Shifa will not exceed the following annual caps for the three years ending December 31, 2007, 2008 and 2009:

Annual caps For the year ending December 31, 2007 2008 2009 (RMB in millions)

Annual aggregate rent under lease agreements with Mr. Ding Shizhong, Fujian Light Industrial and Jinjiang Shifa 1.62 1.62 1.62

The above annual caps have been determined based on the annual aggregate rent payable under the respective lease agreements with Mr. Ding Shizhong, Fujian Light Industrial and Jinjiang Shifa.

The waiver from the announcement requirement under the Listing Rules covers the three years ending December 31, 2007, 2008 and 2009 while the terms of the lease agreements are longer than the period covered by the waiver. We will comply with the relevant requirements under the Listing Rules (including the application for new waiver) after the waiver expires.

3. Packaging Material Supply Agreement with Quanzhou Anda

Terms of the Packaging Material Supply Agreement

Quanzhou Anda and ANTA China entered into a packaging material supply agreement on June 15, 2007, whereby Quanzhou Anda agreed to supply cardboard cases to our Group from time to time on normal commercial terms which are no less favorable than those available from Independent Third Parties. The packaging material supply agreement is for a term from July 1, 2007 to December 31, 2009 renewable for a further three years at our option subject to compliance with applicable requirements of the Listing Rules. The prices for the cardboard cases will be agreed between

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Quanzhou Anda and us from time to time after arm’s length negotiation and comparable to market prices of similar cardboard cases and the prices we pay to other independent suppliers of similar cardboard cases.

Historical Transaction Amounts

Quanzhou Anda was one of our suppliers of cardboard cases during the Track Record Period. For the three years ended December 31, 2004, 2005 and 2006, purchases of cardboard cases from Quanzhou Anda amounted to Nil, approximately RMB4.0 million and RMB6.5 million and accounted for Nil, approximately 86.5% and 100% of our total purchases of cardboard cases during the same periods, respectively. According to the financial statements of Quanzhou Anda, which were audited in accordance with PRC GAAP, Quanzhou Anda’s sales of cardboard cases to our Group accounted for approximately 19.4% and 15.2% of the turnover of Quanzhou Anda during the same periods. Quanzhou Anda only provides cardboard cases to us for carriage of individual shoe boxes in the delivery of our ANTA products and it does not supply us with shoe boxes or other packaging materials. Quanzhou Anda was incorporated on August 10, 2004, and we did not purchase packaging materials from Quanzhou Anda in 2004. Our Directors consider Quanzhou Anda is able to meet our requirements in respect of quality, price and quantity and is conveniently located close to our major production facilities in Jinjiang, Fujian. Pursuant to the terms of the packaging material supply agreement, we are free to engage other independent suppliers for the provision of similar cardboard cases provided by Quanzhou Anda. However, our Directors consider there are only a small number of suppliers of cardboard cases which are able to meet our requirements in terms of production capacity, quality control and pricing and which are as conveniently located as Quanzhou Anda.

Maximum Annual Transaction Amounts

Our Directors estimate that the annual value of the transactions under the packaging material supply agreement with Quanzhou Anda will not exceed the following annual caps for the three years ending December 31, 2007, 2008 and 2009:

Annual Caps For the year ending December 31, 2007 2008 2009 (RMB in millions)

Total annual value of the transactions under the packaging material supply agreement withQuanzhouAnda...... 16.1 24.0 35.8

Our estimated purchases of cardboard cases for 2007 to 2009 are based on the estimated growth of our sales which will require more cardboard cases for the delivery of our ANTA products. We estimate the annual caps for Quanzhou Anda for 2007 to 2009 in the amounts of approximately RMB16.1 million, RMB24.0 million and RMB35.8 million, respectively.

Our Directors, including the independent non-executive Directors, consider that the packaging material supply agreement is carried out in our ordinary and usual course of business, on normal commercial terms that are fair and reasonable and in the interests of our shareholders as a whole. Our Directors have reviewed the terms of sales of similar cardboard cases by Quanzhou Anda to third parties and price quotes offered by third party suppliers of similar cardboard cases and confirmed that the terms are substantially the same as those applicable to our purchases of cardboard cases from Quanzhou Anda.

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4. Sportswear sales agreements of ANTA products with Guangzhou Anda and Quanzhou Binhui

Terms of the sportswear sales agreements

On June 15, 2007, ANTA China entered into an agreement with each of Guangzhou Anda and Quanzhou Binhui, whereby we agreed to sell our ANTA products to Guangzhou Anda and Quanzhou Binhui from time to time on normal commercial terms which are no more favourable than those available to our independent distributors. The agreements are both for a term from July 1, 2007 to December 31, 2009 renewable for a further three years at our option subject to compliance with applicable requirements of the Listing Rules. We have the right to terminate these agreements at any time before expiration and have the right to renew the agreement for a maximum period of three years subject to compliance with the Listing Rules. The prices at which we sell our products to Guangzhou Anda and Quanzhou Binhui will be based on terms that are comparable to those available to our independent distributors and after arm’s length negotiation and on normal commercial terms.

Historical Transaction Amounts

Guangzhou Anda and Quanzhou Binhui are our distributors of ANTA products during the Track Record Period. Details of our sales to them for the three years ended December 31, 2004, 2005 and 2006 are set out below:

Year ended 31 December 2004 2005 2006 Transaction Amount (RMB million)

GuangzhouAnda...... Nil 2.9 174.1 QuanzhouBinhui...... Nil 5.6 9.6

Guangzhou Anda and Quanzhou Binhui were incorporated on June 20, 2005 and December 14, 2004 respectively and therefore we made no sales to them in 2004. Before Guangzhou Anda became our distributor, our sales of ANTA products to the Guangdong district were principally made to department stores and sole proprietors in that district. Our sales to Guangzhou Anda in 2005 were only approximately RMB2.9 million. This was because Guangzhou Anda was incorporated in mid-2005 and was a new distributor of our Group. In 2006, our sales to the Guangdong district were made substantially through Guangzhou Anda and in addition, Guangzhou Anda expanded its sales regions to include Guangxi and Hainan provinces during the year which led to a significant increase in our sales to Guangzhou Anda during 2006. Quanzhou Binhui also continued to expand its business of distribution of our products from 2005 to 2006.

— 123 — CONNECTED TRANSACTIONS

Maximum Annual Transaction Amounts

Our Directors estimate that the annual value of the transactions under the sportswear sales agreements with Guangzhou Anda and Quanzhou Binhui will not exceed the following annual caps for the three years ending December 31, 2007, 2008 and 2009:

Annual caps For the year ending December 31, 2007 2008 2009 (RMB in millions)

Total annual sales of ANTA products to GuangzhouAnda...... 544.1 555.3 828.9 Total annual sales of ANTA products to QuanzhouBinhui...... 39.1 58.4 87.2

We estimate our sales to Guangzhou Anda and Quanzhou Binhui in 2007 will increase substantially when compared with 2006 as a result of the successful establishment of authorized ANTA retail outlets in those areas where Guangzhou Anda and Quanzhou Binhui distribute our ANTA products. The annual cap for 2007 is based on (i) our actual sales made to each of them for the three months ended March 31, 2007, (ii) contracts entered into between us and each of them for sales in the second and third quarter of 2007 and (iii) the preliminary orders we received from them for sales in the fourth quarter of 2007. We estimate that the rate of growth of sales of our ANTA products for 2008 and 2009 in those areas where Guangzhou Anda and Quanzhou Binhui distribute our ANTA products will remain high based on our estimate of the growth rate in the number and size of stores, the rate of expansion in sales in existing stores and the increase in average selling price. Accordingly, we estimate the annual caps for Quanzhou Binhui for 2007 to 2009 in the amounts of approximately RMB39.1 million, RMB58.4 million and RMB87.2 million, respectively. For Guangzhou Anda, we plan to engage additional distributors in the area where Guangzhou Anda distributes our ANTA products and therefore we expect the growth rate of sales to Guangzhou Anda will become less substantial in 2008 and 2009. Our estimated annual caps for Guangzhou Anda for 2007 to 2009, are approximately RMB544.1 million, RMB555.3 million and RMB829.0 million, respectively.

Our Directors, including the independent non-executive Directors, consider that the sportswear sales agreements are carried out in the ordinary and usual course of business, on normal commercial terms that are fair and reasonable and in the interests of our shareholders as a whole.

Application for waiver for Non-exempt Continuing Connected Transactions

Our Directors (including the independent non-executive Directors) consider that the transactions under each of the Non-exempt Continuing Connected Transactions have been entered into in the ordinary course of business of our Group and have been based on arm’s length negotiation and on normal commercial terms that are fair and reasonable so far as the shareholders of our Company are concerned. Our Directors also confirm that each of the proposed annual caps set out herein are fair and reasonable.

Each of the applicable percentage ratios of the continuing connected transactions with Fujian Light Industrial, Jinjiang Shifa and Mr. Ding Shizhong (in aggregate) is, on an annual basis, expected to be less than 2.5% under Rule 14A.34 of the Listing Rules. As such, such transactions are exempt from the independent shareholders’ approval requirements but are subject to the reporting and announcement requirements set out in Rules 14A.45 to 14A.47 of the Listing Rules.

— 124 — CONNECTED TRANSACTIONS

Each of the applicable percentage ratios of the continuing connected transactions with Quanzhou Anda, Guangzhou Anda and Quanzhou Binhui is, on an annual basis, expected to be more than 2.5% under Rule 14A.34 of the Listing Rules. As such, such transactions are subject to the reporting, announcement and independent shareholders’ approval requirements set out in Rules 14A.45 to 14A.48 of the Listing Rules.

As the Non-exempt Continuing Connected Transactions will continue after the Listing on a recurring basis, the Directors consider that strict compliance with the announcement and/or independent shareholders’ approval requirement under the Listing Rules would be unduly burdensome and impractical.

Accordingly, we have applied for, and have received from, the Stock Exchange a waiver from strict compliance with the announcement and/or independent shareholders’ approval requirement set out in Chapter 14A.47 and 14A.48 of the Listing Rule for the Non-Exempt Continuing Connected Transactions.

In respect of Rules 14A.35(2), the maximum aggregate annual cap for each of the Non-exempt Continuing Connected Transactions shall not exceed the applicable limit set out below:

Transactions

Proposed Annual Cap for the year ending December 31, 2007 2008 2009 (RMB in millions)

1. Annual aggregate rent under lease agreements with Mr. Ding Shizhong,FujianLightIndustrialandJinjiangShifa...... 1.62 1.62 1.62 2. Packaging material supply agreement with Quanzhou Anda. 16.1 24.0 35.8 3. SportswearsalesagreementwithGuangzhouAnda...... 544.1 555.3 828.9 4. SportswearsalesagreementwithQuanzhouBinhui...... 39.1 58.4 87.2

Our Company confirms that our Company will comply with the requirements set out in Chapter 14A of the Listing Rules, including Rules 14A.35(1), 14A.35(2), 14A.36 to 14A.40 and 14A.45 of the Listing Rules in relation to the above continuing connected transactions and that the maximum aggregate annual values of the continuing connected transactions with Fujian Light Industrial, Jinjiang Shifa and Mr. Ding Shizhong (in aggregate), Quanzhou Anda, Guangzhou Anda and Quanzhou Binhui for the three years ending December 31, 2009 are not expected to exceed the annual caps, and will re-comply with Rules 14A.35(3) and (4) of the Listing Rules if any of the respective annual caps set out above are exceeded, or when the relevant agreement is renewed or when there is a material change to the terms of the relevant agreement.

Confirmation from the Sponsor

The Sponsor is of the view that (i) the Non-exempt Continuing Connected Transactions for which waivers are sought have been entered into in the ordinary and usual course of business of our Company on normal commercial terms and are fair and reasonable and in the interests of our shareholders as a whole; and (ii) the proposed annual caps for the Non-exempt Continuing Connected Transactions are fair and reasonable.

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DIRECTORS

Executive Directors

Mr.DingShizhong( ) (alias Ding Zhizhong ( )), aged 36, is the chief executive officer, an executive Director and the chairman of our Company. He is also the president of our Company. He is responsible for the overall corporate strategies, planning and business development of our Group. He joined our Group on July 30, 1994 as a director of ANTA Fujian. From 2000, he has been the president of ANTA China. In 2003, he was appointed as a representative of the Tenth Fujian People’s Congress. In 1998, he was awarded the title of the Eminent Young Entrepreneur of Jinjiang ( ). In 2000, he was named as one of the Top Ten Eminent Young Entrepreneurs of Fujian ( )andin 2004, he won the title of the 2004 Top Ten Brand Talents in China ( ). He was also awarded the title of Top Ten Outstanding Young Persons in China in 2006 ( ). He is a member of the China Track Equipment Committee ( ).

Since Mr. Ding joined our Group in 1994, he has dedicated the past 13 years to expand and promote our Group’s business, as well as developing China’s sporting goods industry. Mr. Ding is currently in an EMBA program offered by Xiamen University ( ). Mr. Ding is a brother of Mr. Ding Shijia, a cousin of Mr. Wang Wenmo and a brother-in-law of Mr. Lai Shixian.

Mr.DingShijia( ) (alias Ding Kongjun ( )), aged 42, is an executive Director and a vice president of our Company. Mr. Ding is primarily responsible for the management of our Group’s footwear operations. He joined our Group on July 30, 1994. From 1994 to 2006, he was the general manager of ANTA Fujian. He has been the chairman of the Board of Directors of ANTA China since 2000. He has over 10 years of experience in the sporting goods industry in China. He was the deputy factory manager of Jinjiang Shifa from 1992 to 1993. In 2002 and 2004, he was awarded the title of Eminent Young Entrepreneur of Quanzhou ( ). He is currently enrolled in an economic management program offered by Fujian Institute of Economics and Management. Mr. Ding is a brother of Mr. Ding Shizhong, a cousin of Mr. Wang Wenmo and a brother-in-law of Mr. Lai Shixian.

Mr. Lai Shixian ( ), aged 33, is the chief operating officer, an executive Director and a vice president of our Company. Mr. Lai is responsible for the overall administrative management of our Group. From 1993 to 2003, he worked in Jinjiang Branch of Agricultural Bank of China. He has over 10 years of experience in financial and administrative management. Mr. Lai joined our Group on March 1, 2003. In 2004, he was appointed as the vice president of ANTA China. Mr. Lai has a junior college certificate in finance from Xiamen University ( ) and is currently enrolled in an EMBA program offered by China Europe International Business School ( ). Mr. Lai is a brother-in-law of Mr. Ding Shizhong and Mr. Ding Shijia.

Mr. Wang Wenmo ( ), aged 50, is an executive Director and a vice president of our Company. Mr. Wang is primarily responsible for the management of our Group’s apparel operations. Mr. Wang has over 20 years of experience in the apparel industry. He was a director of Li Lang (Fujian) Fashion Co., Ltd ( ) from 1984 to 2000. He joined our Group on June 5, 2000. In 2004, he was appointed as the vice president and division head of the apparel business of our Group. Mr. Wang is a cousin of Mr. Ding Shizhong and Mr. Ding Shijia.

Mr. Wu Yonghua ( ), aged 36, is an executive Director and a vice president of our Company. He is primarily responsible for the sales and marketing of ANTA products. He has over 10 years of experience in sales and marketing. He joined our Group on October 8, 2003 as the division head of the sales department of our Group. In 2005, he was promoted to be an assistant to the president of ANTA China. Prior to joining us, he worked for Huasheng Shoe Firm of Fuzhou Shoe City ( ) as a general

— 126 — DIRECTORS, SENIOR MANAGEMENT AND STAFF manager from 1995 to 2000. From 2001 to 2003, he worked for Fuzhou Yongda Trading Co., Ltd as a general manager. Mr. Wu is currently enrolled in an economic management program offered by Fujian Institute of Economics and Management.

Independent Non-executive Directors

Mr. Yeung Chi Tat ( ), aged 37, was appointed as an independent non-executive Director of our Company on February 26, 2007. Mr. Yeung obtained a bachelor’s degree in business administration from the University of Hong Kong in 1993 and a master’s degree in professional accounting from Hong Kong Polytechnic University in 2004. He is a fellow member of the Hong Kong Institute of Certified Public Accountants, a fellow member of the Association of Chartered Certified Accountants of the United Kingdom, a Certified Public Accountant practicing in Hong Kong and a senior international finance manager of the International Financial Management Association. He is the financial controller, qualified accountant and company secretary of Dynasty Fine Wines Group Limited, a company listed on the Main Board of the Stock Exchange. He is also the president of the International Financial Management Association Hong Kong headquarters. Mr. Yeung has previously worked at a major international accounting firm for over 10 years. He is an independent non-executive director of Ta Yang Group Holdings Limited (1991) ( ), which is listed on the Stock Exchange. He possesses experience in auditing, corporate restructuring and corporate financial services.

Mr. Wong Ying Kuen, Paul ( ), aged 51, was appointed as an independent non-executive Director of our Company on February 26, 2007. Mr. Wong has 16 years of experience in the sports media business since 1979. Mr. Wong graduated from Hong Kong Polytechnic University in 1977 with a major in business administration in marketing. He previously worked as a general manager of Golden Dragon Hotel of Kunming from 1986 to 1988, and a general manager, senior international vice president and managing director of International Management Group (China) Co., Ltd from 1996 to 2003. In 2004 he joined Infront Sports and Media Advertising (Beijing) Co., Ltd as managing director leading its China operation.

Mr. Lu Hong Te ( ), aged 46, was appointed as an independent non-executive Director of our Company on February 26, 2007. Mr Lu is a professor at the department of business administration of Chung Yuan Christian University in Taiwan, specializing in sales management and business competitive strategies. He also serves as a visiting professor at institutions including SGP International Management Academy, Nanyang Technological University’s EMBA Center and Xiamen University’s EMBA Center, and a consultant at institutions including the Chinese Association for Industrial Technology Advancement ( ) and Taiwan Entrepreneurs Society Taipei/Toronto ( ). He is an independent non-executive director of three companies, namely Everlight Chemical Industrial Corporation (1711) ( ) and Aiptek International Inc. (6225) ( ) which are listed on the Taiwan Stock Exchange as well as Capxon International Electronic Company Limited (469) ( ) which is listed on the Stock Exchange. He is also an independent director of two other companies, namely Firich Enterprises Co., Ltd (8076) ( ) and Lanner Electronics Inc. (6245) ( ), the shares of which are traded in the Gre Tai Securities Market ( ) in Taiwan. Mr. Lu obtained a bachelor’s degree in industrial management science from National Cheng Kung University in 1983, and a master’s degree and a doctoral degree in marketing from the Graduate Institute of Business Administration of the College of Management of National Taiwan University in 1985 and 1992, respectively.

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SENIOR MANAGEMENT

Mr. Ling Shing Ping ( ), aged 39, is the company secretary and qualified accountant of our Company. He is the chief financial officer and investor relations officer of our Company and is responsible for our overall financial and accounting affairs and investor relations. Mr. Ling graduated from the University of Hong Kong with a bachelor’s degree in business administration in 1991. He is a fellow member of the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants. Prior to joining our Group, he has worked for a major international accounting firm and obtained over 10 years of auditing, accounting and financing experience. Mr. Ling joined our Group on January 1, 2007.

Mr. Ke Yufa ( ), aged 42, is the vice president of our Company responsible for our footwear business. He has over 12 years of experience in the sporting goods industry in China. He joined our Group on July 30, 1994 as the vice division head of the Quality and Technology Center of ANTA Fujian, leading the technology development and quality management of our Group’s footwear business. From 1988 to 1993, he was the division head of the quality and technology center of Jinjiang Shifa. He joined ANTA China as the deputy division head of our footwear business department in February 2001 and became a vice president in November 2004. He is currently enrolled in an economic management programme offered by Fujian Institute of Economics and Management.

Mr. Ni Zhongsen ( ), aged 37, is a vice president of our Company. He joined our Group on March 1, 2006. Mr. Ni is primarily responsible for our Group’s overall financial management, capital planning and allocation. He has over 16 years of experience in financial, operations, business management and enterprise listing. Prior to joining our Group, he worked for Fujian Sanming Yuanfa Polyethylene Co., Ltd ( ) as a chief accountant from 1992 to 1994, and Fujian HengAn Group Co., Ltd ( ) as a finance general manager from 1994 to 2005. He holds an advanced accountant certificate, a China Certified Public Accountant certificate, an international certified internal auditor certificate, an international project management professional certificate, an international certificate in senior management consultancy, and a certificate of independent directors’ training of listing companies. In 2005, he was awarded the title of Excellent CFO of China. He obtained a junior college certificate in financial accountancy from the Fujian College of Forestry ( ) in 1990, a college diploma in computer science from Correspondence College of Computer of China ( )anda master’s degree in business administration from the University of Northern Virginia ( ) in 2006. He is a member of the China Institute of Internal Audit and the Guangdong Institute of Internal Audit. He is also a member of the Certified Public Accountant Association of Fujian, a standing member of the Accounting Society of Fujian and a vice-president of the Private Enterprises Branch of Accounting Society of Fujian.

Mr. Xu Yang ( ), aged 32, is the division head of our Group’s brand management center. On April 3, 2006, he joined our Group and is responsible for the branding, marketing and product strategies of the ANTA brand. He has nine years of experience in marketing and brand management. From 1999 to 2000, he worked in McCANN Erickson Guangming Ltd., Shanghai branch. From 2000 to 2001, he worked as the account manager for TBWA Advertising (Shanghai) Co., Ltd. From 2002 to 2006, he worked as the account division head for Grey China Adv. Co., Ltd. during which was awarded a silver award of the Outstanding Marketing Award in China and a Grand Prize of EFFIE Advertising Award in China Advertising Festival. Mr. Xu graduated from Xiamen University ( ) in 1998 with a college diploma in English.

Mr. Wang Huayou ( ), aged 35, has been the division head of the sales department of our Group since 2005. He joined our Group on May 13, 2005 and is responsible for our Group’s sales. He has over 10 years of experience in sales and marketing. From 1994 to 1996, he worked for Wenzhou Branch of Industrial & Commercial Bank of China ( ) as an office clerk. From 1996 to 2000, he

— 128 — DIRECTORS, SENIOR MANAGEMENT AND STAFF worked as a vice general manager in Wenzhou Ji’erda shoes Co., Ltd ( ). From 2000 to 2004, he worked as vice general manager in Hong Qing Ting (China) Co., Ltd ( ). In June 2004, Mr. Wang worked as a general manager of Changsha Motive Force Sports Products Co., Ltd. ( ). Mr. Wang graduated from Zhejiang Banking School in 1994, with a polytechnic diploma in urban finance.

Ms. Ye Wen ( ), aged 35, is the division head of our Group’s product management center and is responsible for the design and development of our ANTA products. Ms. Ye has extensive experience in design and development management. From 1995 to 1997, she worked as a general manager of Changsha Tianyi Advertisement Co., Ltd ( ). From 1997 to 2000, she worked as a general manager of Sichuan Branch of Beijing Gweat Sports Articles Co., Ltd ( ). Ms. Ye joined us on February 1, 2001 and was appointed as the division head of our product management center in March, 2006. She has a junior college certificate in economic management offered by Hunan University.

Mr. Li Su ( ), aged 39, is the division head of our Group’s quality and technology center. He is responsible for technology development and innovation and inspection and management of product standards. Mr. Li has 17 years of experience in quality control. On May 1, 2004, Mr. Li joined our Group as a consultant and was promoted to the division head of the quality and technology center in the same year. Before joining us, he worked for Quanzhou Institute of Supervision and Testing on Product Quality ( ) from 1987 to 2004. He is a member of the China National Garment Standards Committee. He graduated from Fuzhou University ( ) with a bachelor’s degree in physics and chemistry. He has been certified as a senior engineer of technology and quality by the Personnel Bureau of Fujian, and a senior auditor of technology and quality by the China National Auditor and Training Accreditation Board.

Mr. Yang Yong ( ), aged 31, is the division head of our Group’s human resources department. He is responsible for our Group’s human resources management. He joined our Group on February 5, 2006. Mr. Yang has more than six years of experience in business and human resources management. Prior to joining us, he worked as a division head of human resources department in Hui Yuan Technology Development Co., Ltd ( ) and Top Group Technology Development Co., Ltd ( ) from 2000 to 2006. He received a bachelor’s degree with a major in public relations and secretarial in 1999 from Sichuan Normal University ( ).

Ms.ZhouHaiyan( ), aged 35, is the division head of our Group’s overseas business department. She is responsible for developing our Group’s business overseas. She joined us on March 1, 1999 as a manager in the sales department. She has over seven years of experience in the sporting goods industry in China. She has held various positions with us as the vice division head of our marketing management center and the vice division head of our footwear business department from 2001 to 2006. Ms. Zhou graduated from Quanzhou Huaqiao University ( ) with a junior college certificate in marketing and accounting in 1992. She is currently enrolled in an EMBA programme at Xiamen University ( ).

Mr. Wang Ping ( ), aged 31, is the division head of our Group’s retail management center and he is responsible for managing our retail business of ANTA branded products. He joined our Group on August 22, 2005. He has over five years of experience in retail management. Prior to joining us, he worked for Nike (Suzhou) Sports Company Ltd, Shanghai Branch as a customer manager from 2001 to 2005. He worked for Shanghai Yileng Carrier Airconditioning Equipment Co., Ltd as an engineer from 1996 to 2001. He graduated from Shanghai Jiaotong University ( ) with a bachelor’s degree in refrigeration and cryogenic engineering in 1996. He is currently enrolled in an MBA programme in Antai College of Economics and Management of Shanghai Jiaotong University ( ).

— 129 — DIRECTORS, SENIOR MANAGEMENT AND STAFF

Mr. Pei Yongle ( ), aged 34, is a director of Shanghai Fengxian and is primarily responsible for the establishment and operation of Shanghai Fengxian. He has over 5 years of experience in corporate management. He joined our Group on October 1, 2004 as an assistant to the President and was appointed as a director of Shanghai Fengxian in October 2006. Prior to joining our Group, he worked for the Guangzhou Branch of Beijing Xinhuaxin Commercial Information Consulting Co., Ltd. ( ) as an associate consultant and general manager from July 1995 to September 2001. He worked for Guangzhou Baishigao Enterprise Development Co., Ltd. ( ) as a deputy general manager from September 2001 to September 2004. Mr. Pei graduated from Shanxi Financial and Economic College ( ) with a bachelor’s degree in economics. He is currently enrolledinanEMBAprogramofferedbyChina Europe International Business School ( ).

Mr. Jin Wei ( ), aged 33, is the general manager of Shanghai Fengxian and is responsible for the operation and management of Shanghai Fengxian in accordance with the instructions from the Board. He has over nine years of experience in corporate management. He joined our Group on October 20, 2006. Prior to joining our Group, he worked for Harbin Nangang District Linlin Sports Goods Store ( ) as a store manager from September 1996 to December 2004. He worked for Harbin Jin Jian Sports Goods Trading Co., Ltd. ( ) as a general manager from January 2005 to October 2006. He worked for Jilin Province Chang An Sports Goods Co., Ltd. ( ) as a general manager from June 2006 to October 2006. He was selected as the vice chairman of Harbin Association of Sports Goods ( )inNovember 2005. Mr. Jin graduated from Northeast Agricultural University ( ) with a bachelor’s degree in engineering.

MANAGEMENT PRESENCE IN HONG KONG

Rule 8.12 of the Listing Rules requires that a new applicant applying for a primary listing on the Stock Exchange must have a sufficient management presence in Hong Kong. This normally means that at least two of its executive directors must be ordinarily resident in Hong Kong. Since the principal business operations and manufacturing facilities of our Group are located in China, the senior management members of our Group are and will therefore continue to be based in China. At present, Mr. Ling Shing Ping, the company secretary and qualified accountant of our Company, is ordinarily resident in Hong Kong but none of the executive Directors are Hong Kong residents or based in Hong Kong. Our Company has applied to the Stock Exchange for a waiver from the strict compliance with the requirement under Rule 8.12. For details of the waiver, please see the paragraph headed ‘‘Management Presence’’ under the section headed ‘‘Waivers from compliance with the Listing Rules’’ in this prospectus.

OUR GROUP’S RELATIONSHIP WITH STAFF

We recognize the importance of a good relationship with our employees. The remuneration payable to our employees includes salaries and allowances. We continue to provide trainingtoourstafftoenhance technical and product knowledge as well as knowledge of industry quality standards and work place safety standards.

We have not experienced any significant problems with our employees or disruption to our operations due to labor disputes, nor have we experienced any difficulties in the recruitment and retention of experienced staff. Our Directors believe that we have a good working relationship with our employees.

— 130 — DIRECTORS, SENIOR MANAGEMENT AND STAFF

BOARD COMMITTEES

Audit Committee

Our Company established an audit committee pursuant to a resolution of our Directors passed on June 11, 2007 in compliance with Rule 3.21 of the Listing Rules. The primary duties of the audit committee are mainly to make recommendation to the Board on the appointment and removal of external auditor; review the financial statements and material advice in respect of financial reporting; oversight of internal control procedures of our Company. At present, the audit committee of our Company consists of three members who are Mr. Yeung Chi Tat, Mr. Wong Ying Kuen, Paul and Mr. Lu Hong Te. Mr. Yeung Chi Tat is the chairman of the audit committee.

Remuneration Committee

Our Company established a remuneration committee on June 11, 2007 with written terms of reference. The primary duties of the remuneration committee to make recommendation to the Board on the overall remuneration policy and structure relating to all Directors and senior management of our Group; review performance based remuneration; ensure none of our Directors determine their own remuneration. The remuneration committee consists of three members, namely Mr. Ding Shizhong, Mr. Lu Hong Te and Mr. Wong Ying Kuen, Paul. Mr. Ding Shizhong is the chairman of the remuneration committee.

Nomination committee

We established a nomination committee on June 11, 2007. The nomination committee consists of three members, comprising Mr. Lu Hong Te, Mr. Yeung Chi Tat and Mr. Lai Shixian. The chairman of the nomination committee is Mr. Lu Hong Te. The primary functions of the nomination committee are to make recommendations to the Board regarding candidates to fill vacancies on the Board.

COMPLIANCE ADVISER

Our Company will appoint Goldbond Capital (Asia) Limited as its compliance adviser pursuant to Rule 3A.19 of the Listing Rules. Pursuant to Rule 3A.23 of the Listing Rules, the compliance adviser will advise our Company on the following matters:

(i) the publication of any regulatory announcement, circular or financial report;

(ii) where a transaction, which might be a notifiable or connected transaction, is contemplated including share issues and share repurchases;

(iii) where our Company proposes to use the proceeds of the Global Offering in a manner different from that detailed in this prospectus or where its business activities, developments or results deviate from any forecast, estimate, or other information in this prospectus; and

(iv) where the Stock Exchange makes an inquiry of our Company regarding unusual movements in the price or trading volume of the Shares of our Company.

The term of the appointment shall commence on the Listing Date and end on the date on which our Company distributes its annual report in respect of its financial results for the first full financial year commencing after the Listing Date and such appointment may be subject to extension by mutual agreement.

— 131 — SUBSTANTIAL SHAREHOLDERS

Each of the following persons will, immediately following completion of the Global Offering and the Capitalization Issue (without taking into account the Shares which may be issued upon the exercise of the Over-allotment Option or Shares which may be issued pursuant to the exercise of any options granted under the Pre-IPO Share Option Scheme or which may be granted under the Share Option Scheme), have an interest or short position in Shares or underlying Shares which would be required to be disclosed to our Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, directly or indirectly, be interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of our Group:

Approximate Number percentage of Name Capacity/Nature of interest of Shares shareholding

AntaInternational...... BeneficialOwner 1,498,500,000 62.4% Mr.DingShizhong...... Founderofadiscretionary 1,498,500,000 62.4% trust(1) Mr. Ding Shijia...... Founderofadiscretionary 1,498,500,000 62.4% trust(1) Ms.DingYali...... Founderofadiscretionary 180,750,000 7.5% trust(2)(4) AndaHoldings...... BeneficialOwner 175,500,000 7.3% AndaInvestments...... BeneficialOwner 126,000,000 5.3% Mr.DingHemu...... Founderofadiscretionary 126,000,000 5.3% trust(3)

Notes:

(1) Each of Shine Well (Far East) Limited and Talent Trend Investment Limited is entitled to exercise or control the exercise of one third or more of the voting power at general meeting of Anta International and therefore is deemed to be interested in all the Shares held by Anta International.

The entire issued share capital of Shine Well (Far East) Limited is held by Top Bright Assets Limited, which is in turn held by HSBC International Trustee Limited (‘‘HSBC Trustee’’) acting as the trustee of the DSZ Family Trust. The DSZ Family Trust is an irrevocable discretionary trust set up by Mr. Ding Shizhong as settlor and HSBC Trustee as trustee on May 23, 2007. The beneficiaries under the DSZ Family Trust are family members of Mr. Ding Shizhong. Mr. Ding Shizhong as founder of the DSZ Family Trust is deemed to be interested in the Shares held by Shine Well (Far East) Limited.

The entire issued share capital of Talent Trend Investment Limited is held by Allwealth Assets Limited, which is in turn held by HSBC Trustee acting as the trustee of the DSJ Family Trust. The DSJ Family Trust is an irrevocable discretionary trust set up by Mr. Ding Shijia as settlor and HSBC Trustee as trustee on May 23, 2007. The beneficiaries under the DSJ Family Trust are family members of Mr. Ding Shijia. Mr. Ding Shijia as founder of the DSJ Family Trust is deemed to be interested in the Shares held by Talent Trend Investment Limited.

(2) Spring Star Assets Limited is entitled to exercise or control the exercise of one third or more of the voting power at general meeting of Anda Holdings and therefore is deemed to be interested in all the Shares held by Anda Holdings.

The entire issued share capital of Spring Star Assets Limited is held by HSBC Trustee acting as the trustee of the DYL Family Trust. The DYL Family Trust is an irrevocable discretionary trust set up by Ms. Ding Yali as settlor and HSBC Trustee as trustee on May 23, 2007. The beneficiaries under the DYL Family Trust are issue of Ms. Ding Yali. Ms. Ding Yali as founder of the DYL Family Trust is deemed to be interested in the Shares held by Spring Star Assets Limited.

(3) Sackful Gold Limited is entitled to exercise or control the exercise of one third or more of the voting power at general meeting of Anda Investments and therefore is deemed to be interested in all the Shares held by Anda Investments.

— 132 — SUBSTANTIAL SHAREHOLDERS

The entire issued share capital of Sackful Gold Limited is held by HSBC Trustee acting as the trustee of the DHM Family Trust. The DHM Family Trust is an irrevocable discretionary trust set up by Mr. Ding Hemu as settlor and HSBC Trustee as trustee on May 23, 2007. The beneficiaries under the DHM Family Trust are family members of Mr. Ding Hemu. Mr. Ding Hemu as founder of the DHM Family Trust is deemed to be interested in the Shares held by Sackful Gold Limited.

(4) Ms. Ding Yali is deemed under the SFO to be interested in the 5,250,000 Shares which may be issued to her spouse, Mr. Lai Shixian, an executive Director, upon exercise of options granted to Mr. Lai Shixian under the Pre IPO Share Option Scheme.

Save as disclosed herein, the Directors are not aware of any person who will, immediately following the Global Offering and the Capitalization Issue, have an interest or short position in Shares or underlying Shares which would be required to be disclosed to our Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, directly or indirectly, be interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of our Company.

Stock Borrowing Agreement

In order to facilitate the settlement of over-allocations in connection with the Global Offering, Morgan Stanley & Co. International plc, an affiliate of Morgan Stanley may borrow up to 90,000,000 Shares from Anta International, equivalent to the maximum number of Shares that may be issued upon full exercise of the Over-allotment Option. Further details of the stock borrowing arrangement are set out in the section headed ‘‘Information about this Prospectus and the Global Offering’’ in this prospectus.

— 133 — SHARE CAPITAL

Assuming the Over-allotment Option is not exercised at all, our Company’s issued share capital immediately following the Global Offering and the Capitalization Issue will be as follows:

HK$

Authorized share capital:

5,000,000,000 Shares 500,000,000

Issued and to be issued, full paid or credited as fully paid upon completion of the Global Offering and the Capitalization Issue:

Approximate percentage of issued (Shares) HK$ share capital

1,570,000 Shares in issue as at the date of this prospectus 157,000 0.07

1,798,430,000 Shares to be issued under the Capitalization Issue 179,843,000 74.93 600,000,000 Shares to be issued under the Global Offering 60,000,000 25.00

2,400,000,000 Total 240,000,000 100.00

Assuming the Over-allotment Option is exercised in full, our Company’s issued share capital immediately following the Global Offering and the Capitalization Issue will be as follows:

HK$

Authorized share capital:

5,000,000,000 Shares 500,000,000

Issued and to be issued, full paid or credited as fully paid upon completion of the Global Offering and the Capitalization Issue:

Approximate percentage of issued (Shares) HK$ share capital

1,570,000 Shares in issue as at the date of this prospectus 157,000 0.06 1,798,430,000 Shares to be issued under the Capitalization Issue 179,843,000 72.23 690,000,000 Shares to be issued under the Global Offering and 69,000,000 27.71 the Over-allotment Option

2,490,000,000 Total 249,000,000 100.00

— 134 — SHARE CAPITAL

Note:

(1) The Shares referred to in the above tables have been or will be fully paid or credited as fully paid when issued.

Ranking

The Offer Shares are ordinary shares in the share capital of our Company and will rank equally in all respects with all Shares in issue or to be issued as set out in the above table, and will qualify and rank in full for all dividends or other distributions declared, made or paid after the date of this prospectus.

The Pre-IPO Share Option Scheme and the Share Option Scheme

We have conditionally adopted the Pre-IPO Share Option Scheme and the Share Option Scheme. Under the Pre-IPO Share Option Scheme, certain persons were conditionally granted options immediately prior to the Listing Date to subscribe for Shares. The principal terms of the Pre-IPO Share Option Scheme and the Share Option Scheme are summarized in the sections headed ‘‘Pre-IPO Share Option Scheme’’ and ‘‘Share Option Scheme’’ respectively in Appendix VI of this prospectus.

General mandate to issue Shares

Our Directors have been granted a general unconditional mandate to allot, issue and deal with Shares with an aggregate nominal value of not more than the sum of:

(i) 20% of the aggregate nominal value of the share capital of our Company in issue immediately following completion of the Global Offering and the Capitalization Issue (excluding any Shares which may fall to be issued pursuant to the Over-allotment Option); and

(ii) the aggregate nominal value of share capital of our Company repurchased by our Company (if any) under the general mandate to repurchase Shares referred to below.

This mandate will expire at the earliest of:

(i) the conclusion of our Company’s next annual general meeting; or

(ii) the expiration of the period within which our Company is required by law or the Articles of Association to hold its next annual general meeting; or

(iii) when varied, revoked or renewed by an ordinary resolution of our Company’s shareholders in a general meeting.

For further details of this general mandate, see the paragraph headed ‘‘Written resolutions of the shareholders of our Company passed on June 11, 2007’’ in Appendix VI to this prospectus.

General mandate to repurchase Shares

Our Directors have been granted a general unconditional mandate to exercise all the powers of our Company to repurchase Shares with a total nominal value of not more than 10% of the aggregate nominal amount of the share capital of our Company in issue or to be issued immediately following completion of the Global Offering and the Capitalization Issue (excluding any Shares which may fall to be issued upon the exercise of the Over-allotment Option).

— 135 — SHARE CAPITAL

This mandate only relates to repurchases made on the Stock Exchange, or any other approved stock exchange(s) on which the Shares are listed (and which is recognized by the SFC and the Stock Exchange for this purpose), and which are made in accordance with all applicable laws and/or requirements of the Listing Rules. A summary of the relevant Listing Rules is set out in the paragraph headed ‘‘Repurchase of our own shares’’ in Appendix VI to this prospectus.

This mandate will expire at the earliest of:

(i) the conclusion of our Company’s next annual general meeting; or

(ii) the expiration of the period within which our Company is required by law or Articles of Association to hold its next annual general meeting; or

(iii) when varied, revoked or renewed by an ordinary resolution of our Company’s shareholders in a general meeting.

For further details of this repurchase mandate, see the paragraph headed ‘‘Written resolutions of all the shareholders of our Company passed on June 11, 2007’’ in Appendix VI to this prospectus.

— 136 — FINANCIAL INFORMATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our Group’s financial condition as at December 31, 2004, 2005 and 2006 and our Group’s results of operations for the three years ended December 31, 2006 together with the combined financial information set out in the accountants’ report included as Appendix I to this prospectus. The accountants’ report has been prepared in accordance with International Financial Reporting Standards. You should read the whole of the accountants’ report set out in Appendix I to this prospectus and not rely merely on the information contained in this section. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. For additional information regarding these risks and uncertainties, please refer to the section headed ‘‘Risk Factors’’ in this prospectus.

OVERVIEW

We are one of the leading branded sports footwear enterprises in the PRC. We primarily design, develop, manufacture and market sportswear, including sports footwear and apparel for professionals and the general public under our ANTA brand. We also design, market and sell accessory products under the same brand. Our ANTA products are manufactured through a combination of internal and external production and we sell such products on a wholesale basis to our distributors who are responsible for distribution to the authorized ANTA retail outlets which sell our ANTA products to consumers in the PRC. As at December 31, 2006, we had 35 distributors operating or indirectly managing 4,108 authorized ANTA retail outlets, marketing exclusively ANTA products and as at March 31, 2007, we had 37 distributors operating and indirectly managing an aggregate of 4,217 authorized ANTA retail outlets.

We place great emphasis on brand building and promote ANTA products through advertisements in the press and television media, sponsorship of PRC sports competitions, national leagues and athletes, and various other promotional activities. To leverage our strong distribution and marketing resources and our experience in the sportswear market in China, we have entered into retail agreements with Adidas (Suzhou) and Adidas (China) to retail sporting goods under the adidas and Reebok brands in China. We have also signed a re-distributorship agreement with Dongzhijie to sell sporting goods under the Kappa brand in Shanghai.

We have grown rapidly during the Track Record Period. Our turnover increased from approximately RMB311.5 million for the year ended December 31, 2004 to approximately RMB670.3 million for the year ended December 31, 2005, and to approximately RMB1,250.1 million for the year ended December 31, 2006. Our net profit increased from a net loss of approximately RMB8.4 million for the year ended December 31, 2004 to a net profit of approximately RMB48.0 million for the year ended December 31, 2005, and to a net profit of approximately RMB147.4 million for the year ended December 31, 2006. We believe that our growth during the Track Record Period was primarily attributable to the broadening of our product range, expansion of our sales network, increase in production capacity and our success in building our ANTA brand.

BASIS OF PRESENTATION

The combined balance sheets as at December 31, 2004, 2005 and 2006, and the combined income statements, combined statements of changes in equity and combined cash flow statements of our Group for the Track Record Period (collectively, the ‘‘Combined Financial Information’’) as set out in Appendix I to this prospectus include the results of operations of the companies comprising our Group following the consummation of the Corporate Reorganization, as if our Group in its current form had been in existence throughout the Track Record Period, or where a member of our Group was incorporated during the Track Record Period, since the date of establishment or incorporation of that member.

— 137 — FINANCIAL INFORMATION

As part of the Corporate Reorganization, the accessory business of ANTA Jinjiang, together with its related assets and liabilities, was transferred to our Group. Subsequent to this transfer, ANTA Jinjiang was dissolved in November 2006. In addition, pursuant to an asset purchase agreement dated July 30, 2006, the principal manufacturing equipment and facilities were transferred from ANTA Fujian to ANTA China for a consideration of RMB3.5 million determined based on an asset valuation conducted by an independent valuer and pursuant to another asset acquisition agreement dated August 5, 2006, ANTA Fujian transferred its registered trademarks and its rights in trademark applications in the PRC and other jurisdictions related to our business to ANTA China at nil consideration. Subsequent to these transfers, ANTA Fujian’s only business is its investment in a local newspaper made in May 2006, as well as its holding of the assets and liabilities that were not transferred to our Group. The transfers of operations from ANTA Jinjiang and ANTA Fujian were treated as a reorganization of businesses under common control, and ANTA Fujian and ANTA Jinjiang were accounted for as predecessor entities of our Group. Their results of operations have been included in our Group’s combined income statements, combined statements of changes in equity and combined cash flow statements for the Track Record Period. Their financial condition as at December 31, 2004, 2005 and 2006, including ANTA Fujian’s assets (primarily its receivables and prepayments and its investment in a local newspaper) and liabilities that were not transferred to our Group, has been reflected in our Group’s combined balance sheets at the respective dates. However, ANTA Fujian and ANTA Jinjiang are not part of our Group after the Corporate Reorganization. The assets and liabilities retained by ANTA Fujian were subsequently reflected as a deemed distribution upon our Company becoming the holding company of our Group on June 16, 2007 as further described in ‘‘Recent Developments’’ below.

Because the ultimate equity holders controlled our Group’s key manufacturing entities and facilities before the Corporate Reorganization, and continue to control the members comprising our Group after the Corporate Reorganization, the Combined Financial Information has been prepared as a reorganisation of businesses under common control. Accordingly, the relevant assets and liabilities of the manufacturing entities and facilities of ANTA Fujian and ANTA Jinjiang transferred to the members comprising our Group have been recognized at historical cost. For further details of the Corporate Reorganization, please see ‘‘History and Corporate Structure — Corporate Reorganization of our Group’’.

In preparing the Combined Financial Information, all material intra-group transactions and balances have been eliminated on combination.

RECENT DEVELOPMENTS

As part of the Corporate Reorganization, certain assets and liabilities historically associated with the operation of ANTA Fujian, a predecessor entity of our Group, for which the results in the Track Record Period have been included in the financial information in Appendix I to this prospectus were not transferred to our Group and were retained by ANTA Fujian.

— 138 — FINANCIAL INFORMATION

The following assets and liabilities included in the financial information in Appendix I to this prospectus as at December 31, 2006 were retained by ANTA Fujian and are reflected as a deemed distribution to the Controlling Shareholders on June 16, 2007.

RMB’000

Fixedassets...... 1,787 Accountsandotherreceivablesandprepayments...... 69,875 Cashandcashequivalents...... 826 Otherfinancialassets...... 1,200 Other liabilities and accruals...... (38,166)

35,522

As a result of this deemed distribution, our financial statements going forward will not reflect these assets and liabilities.

FACTORS AFFECTING FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF OUR GROUP

Our Group’s financial condition and results of operations have been and will continue to be affected by a number of factors, including those set out below.

Continued growth of the PRC economy and higher disposable income and spending levels for consumers in the PRC

Our financial condition and results of operations are affected by the macro-economic conditions and the disposable income levels of consumers in the PRC. For the three years ended December 31, 2006, we derived substantially all of our turnover from PRC domestic sales. According to the China Statistical Yearbook 2006, the PRC economy experienced rapid growth from 1995 to 2005 and achieved a CAGR of approximately 11.7% in nominal GDP growth. From 1995 to 2005, the per capita annual disposable income of urban households in China grew at a CAGR of approximately 9.4% and consumer spending as measured by total retail sales value grew at a CAGR of approximately 12.5%, faster than the GDP growth in the same period. Statistics published by the General Administration of Sport ( ) in China suggest that there is a general correlation between disposable income and sports participation in China. We expect that our results of operations will continue to be affected by changes in the growth of the PRC economy and the levels of disposable income and consumer spending in the PRC, particularly in urban areas.

Changes in consumption patterns and consumer demand for sportswear in the PRC

Consumer demand for sportswear in the PRC is one of the key drivers of our turnover. The success of our business depends in large part on the condition of, and growth in, the PRC consumer market. As general living standards in the PRC continue to improve, we expect consumer demand in the PRC to be increasingly directed towards lifestyle enhancing products, such as sportswear, which we believe will positively impact our product sales. For example, China’s sportswear market has experienced double-digit growth since 2000 and Zou Marketing forecasts that the PRC sportswear market is expected to grow at a CAGR of approximately 22.6% per annum from 2005 to 2008. We also believe that the 2008 Beijing Olympics, the 2009 East Asian Games in Hong Kong and the 16th Asian Games in Guangzhou in 2010 will generate a growth in interest in sports among PRC consumers. Changes in the PRC consumer market and consumption patterns may affect our financial condition and results of operations.

— 139 — FINANCIAL INFORMATION

Our product mix

We offer a wide range of ANTA branded products for both men and women, including footwear, apparel and accessories. We continuously monitor our product mix and develop new products we believe will generate higher customer demand to increase our turnover. During the Track Record Period, we underwent a shift in the mix of revenues generated from our different product categories and increased the proportion of our turnover derived from apparel products from approximately 13.2% of our annual turnover for the year ended December 31, 2004 to approximately 32.8% of our annual turnover for the year ended December 31, 2006. Improvements in our gross profit margin during the Track Record Period were partially generated by the expansion in the offerings of our apparel products, which generally had a higher gross profit margin than our footwear products in the years ended December 31, 2005 and 2006. We will continue to adjust our product mix and enhance our product positioning in an effort to increase our average selling price, turnover and gross margin. As we adjust our product mix, our combined gross profit will be affected both by any change in turnover attributable to, and any change in the gross margin of, each product category.

The business performance of our distributors and our ability to supervise and manage them

During the Track Record Period, we sold a majority of our ANTA products to distributors, who in turn sold our ANTA products to consumers through authorized ANTA retail outlets directly operated by these distributors or by third party retail operators appointed by these distributors. The number of our distributors grew from 12 as at December 31, 2004 to 28 as at December 31, 2005, and to 35 as at December 31, 2006 and this number had increased to 37 as at March 31, 2007. As at December 31, 2006, our distributors directly operated and indirectly managed a network of 4,108 authorized ANTA retail outlets and had increased the number of authorized ANTA retail outlets to 4,217 as at March 31, 2007, each selling exclusively ANTA products. During the Track Record Period, we sold a portion of our ANTA products to sole proprietors and department stores. Since January 2007, we sell all our ANTA products directly to our distributors. Our growth is affected by the business performance of our distributors and how quickly they expand the network of authorized ANTA retail outlets. If our distributors do not continue to add new authorized ANTA retail outlets, our growth in turnover will be adversely affected. We believe that our ability to effectively supervise and manage our distributors will affect their performance, which will in turn affect our results of operation and financial performance.

Competition

The sportswear industry is highly competitive in the PRC and on a worldwide basis. Our major competitors include Nike, adidas and Li Ning, all of which offer a range of merchandise similar to ours. Some of our competitors may have greater financial resources and brand recognition than we do. Our financial condition and results of operations will be affected by our ability to remain competitive in this industry, which in turn depends on our ability to increase our brand awareness and differentiate our products from those offered by our competitors in ways that will appeal to consumers.

Cost of raw materials for our footwear production

The major raw materials used in our footwear production are artificial leather, soft and flexible polymer and rubber. To remain competitive, we must obtain from our suppliers sufficient quantities of good quality materials in a timely manner and at acceptable prices. The cost of some of our key raw materials are affected by factors such as fluctuations in crude oil prices and our relationship with our suppliers. For the three years ended December 31, 2004, 2005 and 2006, the cost of our raw materials incurred by us in our own production operations accounted for approximately 90.2%, 84.4% and 72.7%, respectively, of our total

— 140 — FINANCIAL INFORMATION own production cost. Fluctuations in the costs of our raw materials and our ability to pass on any increase in raw material costs to our customers will affect our total cost of sales and our gross margins. See ‘‘Business — Production — Raw materials’’ for further details about the procurement of our raw materials.

Internal production capability and ability to maintain flexible external production arrangements

We manufacture most of our footwear products at our production facilities located in Jinjiang City, Fujian, China. The number of production lines at these facilities has increased from four as at December 31, 2004 to seven as at December 31, 2005, and to ten as at December 31, 2006, and we have increased our production lines to 15 in the first quarter 2007. These facilities had an annual production volume of approximately 4.5 million, 6.8 million and 8.9 million pairs of footwear for the three years ended December 31, 2006, respectively.

We generally outsource part of our footwear production to contract manufacturers only when additional production capacity is required to meet sales orders. We outsourced approximately 19.8%, 14.2% and 27.9% of the total sales volume of our ANTA footwear to external contract manufacturers for each of the three years ended December 31, 2006, respectively. We believe that utilizing a combination of internal and external production arrangements is a cost-effective solution for our operations and allows us greater flexibility to adjust our production schedules to meet unforeseen demands in a timely manner. During the Track Record Period, all of our apparel and accessory products were produced by our contract manufacturers. From the second quarter of 2007, we began manufacturing some of our own apparel products, which we believe will enhance the flexibility of our apparel production.

Ability to maintain brand recognition and marketing success of our products

We believe brand recognition is crucial to customers’ purchasing decisions. We position our ANTA brand as a high quality sportswear brand which targets young PRC consumer groups. We place great emphasis on brand building and promote ANTA products through advertisements in the media, sponsorship of PRC sports competitions, leagues and athletes, and various other promotional activities. For the three years ended December 31, 2006, our promotional and marketing expenses accounted for approximately 9.4%, 7.1% and 8.3% of our turnover, respectively. We intend to increase our marketing budgets for promotional activities during the next three to five years in order to further strengthen our brand and market position. Our ability to maintain the position of our ANTA brand in the market through our marketing efforts will affect our market share and sales growth.

Level of income tax and preferential tax treatment

Our profit attributable to equity shareholders is affected by the level of income tax that we pay and the preferential tax treatment that we are able to enjoy. According to the PRC Foreign Invested Enterprise and Foreign Enterprise Income Tax Law (‘‘FIE Tax Law’’) and its rules, a foreign invested enterprise engaged in manufacturing with an operating term exceeding ten years is entitled to an enterprise income tax exemption for its first two years of profitability (after offsetting all tax losses carried forward from previous years), and a 50% tax reduction for the following three consecutive years provided approval is obtained from the relevant tax authority. As a foreign invested enterprise engaged in the manufacturing business and due to its location in a coastal economic open zone, ANTA China is entitled to the preferential tax treatments provided under the FIE Tax Law. Accordingly, ANTA China is subject to a state enterprise income tax rate of 24% and fully exempted from the state enterprise income tax for two years, followed by a 50% reduction for the next three years. In addition, ANTA China was fully exempted from local enterprise income tax in 2005 and 2006. Such tax treatment had a significant positive effect on our profit after taxation during the years ended December 31, 2005 and 2006. From 2007 through 2009, ANTA China is entitled to a 50% reduction in its state enterprise income tax rate. From 2007 through 2009, ANTA China is also entitled to

— 141 — FINANCIAL INFORMATION full exemption from local enterprise income tax rate. As such, ANTA China is subject to a enterprise income tax rate of 12%. We expect that upon the expiry of the full exemption from enterprise income tax enjoyed by ANTA China, our Group’s taxation expense will increase from 2007 onwards.

Under the current tax regime, ANTA Changting and ANTA Quanzhou are qualified for the same type of preferential tax treatments as ANTA China because they are engaged in the manufacturing business and as a result of their places of incorporation and their foreign invested enterprise status, except that ANTA Changting is not exempted from the local enterprise income tax. ANTA Xiamen, being a foreign invested enterprise engaged in the manufacturing business, is qualified for the preferential tax treatment of two years’ full exemption and three years’ 50% reduction available under the FIE Tax Law. However, in order to enjoy the benefit of their preferential tax treatment, ANTA Changting, ANTA Quanzhou and ANTA Xiamen may only apply for and obtain an approval from the competent tax authorities after they have started to make profit. As at the Latest Practicable Date, ANTA Quanzhou and ANTA Xiamen had not commenced operation. ANTA Changting commenced operation in the second quarter of 2007. On the other hand, Shanghai Fengxian enjoys a full exemption from enterprise income tax in 2007 because it is newly incorporated in Shanghai Pudong District.

ANTA Xiamen, Xiamen Trading and Xiamen Investment, are all qualified for a preferential tax rate of 15% because they are all incorporated in Xiamen Special Economic Zone. Their current preferential tax rate of 15% will, according to the New Enterprise Income Tax Law of the PRC (the ‘‘New Tax Law’’), gradually transit to 25% within five years from January 1, 2008. Similarly, the current preferential tax rate of 15% applicable to Shanghai Fengxian will also undergo a gradual transition to 25% within the same five year period. Therefore, by 2013, each of ANTA Quanzhou, ANTA Xiamen, Shanghai Fengxian, Xiamen Trading and Xiamen Investment will be subject to the same enterprise income tax rate of 25%. As the detailed implementation rules of the New Tax Law have not yet been published, it is unclear how the tax rate will be raised during the transitional period. However, the New Tax Law and the change in the enterprise income tax rate would have a material adverse impact on our results of operation.

Expansion of our business into the PRC sportswear retail market

As part of our overall strategy to expand our business into the PRC sportswear retail market, we recently entered into retail agreements with Adidas (Suzhou) and Adidas (China), and a re-distributorship agreement with Dongzhijie, which allow us to sell adidas and Reebok sportswear products in China, and Kappa branded sportswear products in Shanghai. We also plan to establish and operate our flagship stores in prime locations to sell our ANTA products. In addition, we plan to open retail sports complexes selling sportswear under a variety of brands, including our ANTA products, as well as our authorized brands and products distributed by other retailers.

We expect to make significant capital expenditures and allocate a portion of our resources in connection with these retail operations. We have limited experience in operating retail sportswear businesses. If our expansion into the retail business is not successful, we may not be able to recover the investments that we made in order to enter the retail business. Moreover, our core business of producing and wholesaling ANTA branded products may suffer as a result of the diversion of financial and other resources required for our expansion into the retail business.

Our retail sportswear business has a different profitability profile from our core business of producing and wholesaling of ANTA branded products as our retail business with respect to the adidas, Reebok and Kappa branded products will likely have a lower profit margin, and is not expected to contribute to our net profit in 2007. In addition, our retail sportswear business also requires substantial working capital to support the payment of deposits to our suppliers of adidas, Reebok and Kappa branded products and to keep

— 142 — FINANCIAL INFORMATION sufficient inventory to support retail sales. As a result, our overall profitability, financial condition and results of operations may be affected and the financial information of our Group during the Track Record Period may not be indicative of our future performance.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Revenue recognition

We recognize revenue from the sale of goods when title passes and the customer has accepted the related risks and rewards of ownership, provided it is probable that the economic benefits will flow to our Group and the revenue and costs, if applicable, can be measured reliably. Under our terms of sale with our customers, title passes upon receipt of the goods by the customer from our Group’s warehouses at which point we recognize revenue.

We record returns and claims as a reduction to revenue in the period in which such returns and claims occur. We also recognize a provision for sales return or claims at each year end based on our estimates on historical rates of product returns and claims, and specific identification of outstanding returns and outstanding claims not yet received from customers for sales made during the year. If it is probable that a certain portion of the inventories sold will be returned, then a provision will be made at the time of the recognition of revenue. Actual returns and claims received after the year end are inherently uncertain and thus may differ from our estimates. If actual returns and claims are greater or lower than the reserves we mayhaveestablished,wewouldrecordareductionorincreasetorevenueintheperiodwheretheactual return or claim occurred. During the Track Record Period, we did not create any provision for product returns and claims from customers because we did not record any product returns to us.

Impairment of assets

We recognize an impairment loss whenever the carrying amount of an asset, or the cash-generating unit to which it belongs, exceeds its recoverable amount. Impairment losses recognized in respect of cash- generating units are allocated to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis, except that the carrying value of an asset will not be reduced below its individual fair value less costs to sell, or value in use, if determinable. An impairment loss is reversed if there has been a favorable change in the estimates used to determine the recoverable amount. A reversal of impairment losses is limited to the asset’s carrying amount that would have been determined had no impairment loss been recognized in prior years. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognized.

Impairment of Receivables

Current receivables that are carried at cost or amortized costs are reviewed at each balance sheet date to determine whether there is objective evidence of impairment. If any such evidence exists, any impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate (i.e., the effective interest rate computed at initial recognition of these assets), where the effect of discounting is material.

Impairment of other assets

Internal and external sources of information are reviewed at each balance sheet date to identify indications that the following assets may be impaired or an impairment loss previously recognized no longer exists or may have decreased:

— 143 — FINANCIAL INFORMATION

— property, plant and equipment;

— constructioninprogress;

— lease prepayments; and

— intangible assets.

If any such indication exists, the asset’s recoverable amount is estimated.

Estimates in Determining Impairment of Receivables and Other Assets

Our management’s judgment is required in the area of asset impairment particularly in assessing: (i) whether an event has occurred that may indicate that the related asset values may not be collected or recoverable; (ii) whether the carrying value of an asset can be supported by the collectible or recoverable amount, being the higher of fair value less costs to sell or net present value of future cash flows which are estimated based upon the continued use of the asset in the business; and (iii) the appropriate key assumptions to be applied in preparing cash flow projections including whether these cash flow projections are discounted using an appropriate rate. Changing the assumptions selected by management in assessing impairment, including the discount rates or the growth rate assumptions in the cash flow projections, could materially affect the net present value used in the impairment test. If there is a significant adverse change in the projected performance and the resulting future cash flow projections and the discount rates, it will be necessary to take an impairment charge to the income statement, which will affect our Group’s financial condition and results of operations only when the resulting net present value used in the impairment test is lower than the book value of the assets.

Depreciation and amortization

Depreciation is calculated to write off the cost of items of property, plant and equipment, less their estimated residual value, if any, using the straight-line method over their estimated useful lives. We amortize our intangible assets using the straight-line method over their estimated useful lives. The useful lives are based on our historical experience with similar assets and taking into account anticipated technological changes. Both the useful life of an asset and its residual value, if any, are reviewed annually. Changes in circumstances, such as technological advances or changes to our business operations, can result in differences between the actual and estimated useful lives of an asset. In those cases where we determine that the useful life of a long-lived asset or an intangible asset should be shortened, we increase the depreciation or amortization expense over the remaining useful life to depreciate the asset’s net book value to its salvage value.

Inventories

Inventories are stated at the lower of cost and net realizable value.

The cost of inventories is computed using the weighted average method and includes expenditures incurred in acquiring the inventories to bring them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes direct labor and an appropriate share of overhead based on normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and selling expenses.

We regularly review the carrying amount of our inventories for slow moving inventory, obsolescence or declines in market value. These reviews are conducted with reference to inventory aging analyses, projections of expected future saleability of goods and management experience and judgment. If our

— 144 — FINANCIAL INFORMATION estimate of net realizable value is below the cost of inventory, we record a provision against the inventories for the difference between cost and net realizable value, which will result in a corresponding increase in our cost of sales. If actual market conditions are less favourable than those projected by management and our inventories remain unsold longer than we anticipated, an additional inventory provision may be required.

None of our inventories were stated at net realizable value as at December 31, 2004, 2005 and 2006. We did not make significant provisions for inventories during the Track Record Period.

RESULTS OF OPERATIONS

Selected combined income statements

Our combined income statements for the years ended December 31, 2004, 2005 and 2006 as set out below are derived from our audited combined financial statements included in Appendix I to this prospectus:

Years ended December 31, 2004 2005 2006 RMB (million) RMB (million) RMB (million)

Turnover...... Footwear...... 265.9 446.0 797.7 Apparel...... 41.2 215.0 409.9 Accessories...... 4.4 9.3 42.5

311.5 670.3 1,250.1

Costofsales...... (267.7) (544.5) (936.9)

(Loss)/profit from operations ...... (5.0) 51.1 148.3 Financecosts...... (1.5) (0.9) (0.3)

(Loss)/profit before taxation ...... (6.5) 50.2 148.0 Incometax...... (1.9) (2.2) (0.6)

Net (loss)/profit for the year...... (8.4) 48.0 147.4

Dividenddeclaredduringtheyear...... — — 22.9

(Loss)/earnings per Share Basic(RMB)...... (0.005) 0.027 0.082

PRINCIPAL INCOME STATEMENT COMPONENTS

The following discussion is based on our historical results of operations and may not be indicative of our future operating performance.

— 145 — FINANCIAL INFORMATION

Turnover

Turnover represents the sales value of goods sold less returns, discounts, value added taxes and other sales taxes. Our turnover is derived from the sales of footwear, apparel and accessory products.

The following table sets out a breakdown of our Group’s turnover by product category during the Track Record Period:

Years ended December 31, 2004 2005 2006 RMB % of total RMB % of total RMB % of total Turnover (million) turnover (million) turnover (million) turnover

Footwear...... 265.9 85.4 446.0 66.5 797.7 63.8 Apparel...... 41.2 13.2 215.0 32.1 409.9 32.8 Accessories...... 4.4 1.4 9.3 1.4 42.5 3.4

Total...... 311.5 100.0 670.3 100.0 1,250.1 100.0

The following table sets out the number of units of our footwear and apparel sold during the Track Record Period:

Years ended December 31, 2004 2005 2006 (1) Total units sold (million) (million) (million)

Footwear(numberofpairs)...... 5.6 7.9 11.7 Apparel(numberofpieces)...... 0.8 4.0 8.8

The following table sets out the average sales prices for our major product categories, being footwear and apparel, for the Track Record Period:

Years ended December 31, 2004 2005 2006 (1)(2) Average sales prices RMB RMB RMB

Footwear(perpair)...... 47.5 56.6 68.2 Apparel(perpiece)...... 51.5 53.8 46.6

Notes:

(1) We have not included details of the number of units sold and the average sales price for our accessory products because we have a broad range of accessory products that vary significantly in terms of unit price. We believe that a unit-based analysis of this product category would not be meaningful.

(2) Average sales prices represent the turnover for the year divided by the total units sold for the year.

— 146 — FINANCIAL INFORMATION

Fluctuation of average sales prices

Average sales prices for our footwear products increased by approximately 20.5%, from RMB56.6 per pair for the year ended December 31, 2005 to RMB68.2 per pair for the year ended December 31, 2006, primarily as a result of higher brand recognition and the better quality of our footwear products.

Average sales prices for our footwear products increased by approximately 19.2%, from RMB47.5 per pair for the year ended December 31, 2004 to RMB56.6 per pair for the year ended December 31, 2005, primarily as a result of increased brand recognition and our broadened range of product offerings, which allowed us to increase the suggested average retail price and wholesale price of our footwear products.

Average sales prices for our apparel products decreased by approximately 13.4%, from RMB53.8 per piece for the year ended December 31, 2005 to RMB46.6 per piece for the year ended December 31, 2006, primarily as a result of the proportionally higher sales volume of our summer collection of apparel products in 2006 compared to that in 2005, and the fact that our summer apparel collection had a lower average sales price than our winter collection.

Average sales price for our apparel products increased by approximately 4.5%, from RMB51.5 per piece for the year ended December 31, 2004 to RMB53.8 per piece for the year ended December 31, 2005, primarily as a result of increased sales of our winter collection of apparel products, whose range of prices was higher than those of our summer collection of apparel products.

Based on our unaudited management accounts for the three months period ended March 31, 2007, the average sales price of our footwear increased by approximately 31.4%, from RMB68.2 per pair for the year ended December 31, 2006 to RMB89.6 per pair (unaudited) for the three months ended March 31, 2007, as a result of the launch of more higher-end products in 2007. Based on such unaudited management accounts, the average sales price of our apparel products decreased by approximately 6.4%, from RMB46.6 per piece for the year ended December 31, 2006 to RMB43.6 per piece (unaudited) for the three months ended March 31, 2007, due to the lower price of spring/summer apparel products. The Directors currently expect the average sales price of our apparel products to increase in 2007 as compared to 2006 based on sales orders received. However, there can be no assurance that average sales prices will increase in 2007.

The following table sets out the breakdown of our turnover by sales region during the Track Record Period:

Years ended December 31, 2004 2005 2006 RMB % of total RMB % of total RMB % of total Sales region (million) turnover (million) turnover (million) turnover

Eastern region(1) ...... 85.4 27.4 99.5 14.8 327.5 26.2 Southern region(2) ...... 69.6 22.4 154.6 23.1 344.0 27.5 Western region(3) ...... 55.7 17.9 134.2 20.0 264.4 21.2 Northern region(4) ...... 100.8 32.3 282.0 42.1 314.2 25.1

Total...... 311.5 100.0 670.3 100.0 1,250.1 100.0

Notes:

(1) Eastern region includes Jiangsu, Zhejiang, Anhui, Jiangxi, and Shanghai.

(2) Southern region includes Fujian, Guangdong, Hainan and Guangxi.

— 147 — FINANCIAL INFORMATION

(3) Western region includes Hunan, Sichuan, Guizhou, Yunnan, Hubei, Henan, Tibet and Chongqing.

(4) Northern region includes Jilin, Heilongjiang, Shandong, Gansu, Liaoning, Hebei, Shanxi, Shaanxi, Inner Mongolia, Ningxia, Qinghai, Beijing, Tianjin and Xinjiang.

Cost of sales

Our cost of sales primarily consists of raw materials, direct labor and overhead for our own production, and OEM and sub-contracting costs for our outsourced production. Overhead costs represent water, electricity, design fees paid to external designers of our products, depreciation of plant and machinery, amortization of consumables and other miscellaneous production costs.

Those raw materials that we purchase and provide to our contract manufacturers are accounted for as costs of outsourced production.

The following table sets out a breakdown of our Group’s cost of sales by product category and the percentage of such cost of the total cost of sales for the Track Record Period:

Years ended December 31, 2004 2005 2006 RMB % of total RMB % of total RMB % of total Cost of sales (million) cost of sales (million) cost of sales (million) cost of sales

Footwear...... 225.4 84.2 371.1 68.2 598.6 63.9 Apparel...... 38.3 14.3 165.1 30.3 305.8 32.6 Accessories...... 4.0 1.5 8.3 1.5 32.5 3.5

Totalcostofsales...... 267.7 100.0 544.5 100.0 936.9 100.0

The following table sets out a breakdown of our Group’s cost of sales by production cost and the percentage of such cost of the total cost of sales for the Track Record Period:

Years ended December 31, 2004 2005 2006 RMB % of total RMB % of total RMB % of total Cost of sales (million) cost of sales (million) cost of sales (million) cost of sales

Our own production Raw materials(1) ...... 166.2 62.1 262.5 48.2 294.9 31.5 Directlabor...... 7.7 2.9 26.7 4.9 58.7 6.3 Overhead...... 10.3 3.8 21.8 4.0 52.1 5.5

Sub-total...... 184.2 68.8 311.0 57.1 405.7 43.3

Outsourced production OEM...... 83.5 31.2 233.5 42.9 450.3 48.1 Sub-contracting arrangement(2) ...... — — — — 80.9 8.6

Sub-total...... 83.5 31.2 233.5 42.9 531.2 56.7

Totalcostofsales...... 267.7 100.0 544.5 100.0 936.9 100.0

— 148 — FINANCIAL INFORMATION

Notes:

(1) We have included sub-contracting charges amounting to RMB11.5 million as part of the costs of raw materials of our own production for the year ended December 31, 2006 because we paid such fees to process certain of our raw materials.

(2) Costs incurred under our sub-contracting arrangement in 2006 consisted of raw material costs (RMB58.5 million) and sub-contracting charges (RMB22.4 million) incurred in connection with this arrangement. As such, our total sub- contracting charges for 2006 were RMB33.9 million as reflected in Note 4(c) of the accountants’ report set out in Appendix I to this prospectus.

During the Track Record Period, we experienced a growth in our total cost of raw materials primarily due to the increase in our production scale to meet the increased market demand for our products. We believe that we will be able to achieve better economies of scale as we expand our operations, which should enable us to strengthen our bargaining power to obtain raw materials at lower prices and reduce our cost of raw materials as a percentage of our turnover. The cost of raw materials purchased for our own production represented approximately 90.2%, 84.4% and 72.7% of our total own production cost for the years ended December 31, 2004, 2005 and 2006, respectively.

Our direct labor costs are also affected by the expansion of our operations and the supply and demand for labor in the PRC. The number of our employees who are directly involved in our production operations increased from 1,160 in 2004 to 2,776 in 2005 and was 5,439 as at December 31, 2006. Our direct labor costs represented approximately 4.2%, 8.6% and 14.5% of our total own production cost for the years ended December 31, 2004, 2005 and 2006, respectively.

During the Track Record Period, our overhead costs increased as we increased our production scale to meet the growth in market demand for our ANTA products. Our overhead costs represented approximately 5.6%, 7.0% and 12.8% of our total own production cost for the years ended December 31, 2004, 2005 and 2006, respectively.

During the Track Record Period, our cost of sales for outsourced production increased as we increased our purchases from OEMs to meet the increased market demand for our products. Our purchases from OEMs represented approximately 31.2%, 42.9% and 48.1% of the total cost of sales for the years ended December 31, 2004, 2005 and 2006, respectively. Due to the increased market demand for our products in 2006, we subcontracted certain manufacturing processes to local manufacturers and paid sub-contracting charges based on the production quantity and the processing fee negotiated with the local manufacturers. In 2006, the costs incurred under the sub-contracting arrangement, including the raw material costs and sub- contracting charges, accounted for approximately 8.6% of the total cost of sales for that year. We did not have any sub-contracting arrangement in 2004 and 2005 and therefore no sub-contracting charges were incurred in those two years.

— 149 — FINANCIAL INFORMATION

Gross profit and gross profit margin

The following table sets out our total gross profit and gross profit margin by product category during the Track Record Period:

Years ended December 31, 2004 2005 2006 RMB RMB RMB Gross profit (million) (million) (million)

Footwear...... 40.5 74.9 199.1 Apparel...... 2.9 49.9 104.1 Accessories...... 0.4 1.0 10.0

Totalgrossprofit...... 43.8 125.8 313.2

Gross profit margin %%%

Footwear...... 15.2 16.8 25.0 Apparel...... 6.9 23.2 25.4 Accessories...... 9.5 10.7 23.5

Overallgrossprofitmargin...... 14.1 18.8 25.1

For information on the reasons for the fluctuation of gross profit margins for each product category, please see ‘‘Gross profit and gross profit margin’’ for the relevant years in the ‘‘Period to Period Comparison of Results of Operations’’ in this section of the prospectus.

Other revenue

Our other revenues primarily consist of interest income from bank deposits and government grants.

Selling and distribution expenses

Selling and distribution expenses consist primarily of costs incurred in our advertising and marketing activities, such as promotional and marketing expenses, staff costs and traveling expenses, and distributor ordering and related expenses. For the years ended December 31, 2004, 2005 and 2006, our total selling and distribution expenses accounted for approximately 13.1%, 9.1% and 10.6%, respectively, of our total turnover. Promotional and marketing expenses accounted for the majority of our selling and distribution expenses, representing approximately 71.5%, 77.3% and 78.4% of our total selling and distribution expenses for the years ended December 31, 2004, 2005 and 2006, respectively.

Administrative costs

Administrative costs consist primarily of staff salaries, benefits for our management and administrative personnel, utilities and depreciation expenses of our office building and equipment.

Finance costs

Our Group’s finance costs represent interest charges on our short-term bank borrowings.

— 150 — FINANCIAL INFORMATION

Income tax

Income tax represents amounts of PRC enterprise income tax paid by our Group and our predecessor entities. Our Group is not subject to Hong Kong profits tax or any income tax in the Cayman Islands and the BVI during the Track Record Period. The applicable PRC enterprise income tax rates during the Track Record Period for ANTA China and ANTA Fujian, through which the majority of our operations were conducted, are set out below:

Years ended December 31, 2004 2005 2006

ANTAChina...... N/A(1) fully exempted(2) fully exempted(2) ANTA Fujian(3) ...... 27% 27% 27%

Notes:

(1) ANTA China had a net loss in the year ended December 31, 2004 and therefore did not pay any state enterprise income taxinthatyear.

(2) ANTA China is entitled to full exemption from the enterprise income tax for the two years beginning from 2005, its first profitable year after offsetting all tax losses carried forward from the previous years, followed by a 50% reduction in the enterprise income tax for the next three years.

(3) ANTA Fujian transferred its production facilities to us in 2006 pursuant to the Corporate Reorganization and is not part of our Group. Our Company’s PRC legal adviser, Commerce & Finance Law Offices, confirmed that according to the PRC Foreign Invested Enterprise and Foreign Enterprise Income Tax Law (‘‘FIE Tax Law’’), which came into effect on July 1, 1991, the income tax on foreign invested enterprises of a production nature and established in coastal economic open zones shall be levied at the reduced rate of 24%. ANTA Fujian was an enterprise of a production nature during the Track Record Period and therefore its state enterprise income tax rate was 24%. In addition, ANTA Fujian was also required to pay local income tax at the rate of 3%. ANTA Fujian was therefore entitled to a reduced enterprise income tax rate of 27% during the Track Record Period.

See ‘‘Factors affecting financial condition and results of operations of our Group — Level of income tax and preferential tax treatment’’ in this section of the prospectus.

PERIOD TO PERIOD COMPARISON OF RESULTS OF OPERATIONS

Year Ended December 31, 2006 Compared to Year Ended December 31, 2005

Turnover

Turnover increased by approximately 86.5%, from RMB670.3 million for the year ended December 31, 2005 to RMB1,250.1 million in the year ended December 31, 2006, primarily as a result of an increase in sales volume of our footwear and apparel products and an increase in the average sales price of our footwear products. Our increases in average sales price and sales volume were attributable to the enhanced recognition of our ANTA brand as a result of our brand promotion and marketing activities. The increase in sales volume of these products was a result of the expansion of our distribution network, particularly in the eastern and southern regions of the PRC. The number of our distributors increased from 28 as of December 31, 2005 to 35 as of December 31, 2006. In addition, during 2006 we increased the level of our management and supervision over our distributors and the ANTA sales network, which contributed to the increase in turnover in 2006. We also experienced a general increase in same-store sales. Our turnover in the eastern and southern regions for the year ended December 31, 2006 increased primarily due to our success in penetrating first tier cities and building our brand recognition in these regions through increased promotional and marketing activities and an increase in the sales volume of our summer collection of

— 151 — FINANCIAL INFORMATION apparel products in 2006. During this period, we also experienced growth in our turnover in the western region primarily due to the expansion of the ANTA sales network in that region. Our turnover in the northern region remained relatively stable compared to turnover in 2005. Our sales also benefited from the general increase in demand for sportswear products in the PRC in 2006.

Footwear

. Revenue from sales of our footwear products increased by approximately 78.9%, from RMB446.0 million for the year ended December 31, 2005 to RMB797.7 million for the year ended December 31, 2006, primarily as a result of an increase of 48.1% in sales volume for footwear products. This increase was largely due to an increase in sales volume in the eastern and southern regions. In addition, we experienced an increase of approximately 20.5% in the average sales price of our footwear products due to higher brand recognition and product quality.

Apparel

. Revenue from our sales of our apparel products increased by approximately 90.7%, from RMB215.0 million for the year ended December 31, 2005 to RMB409.9 million for the year ended December 31, 2006, primarily as a result of an increase of 120.0% in sales volume. This increase was mainly due to an expansion of our distribution network in the eastern and southern regions and an increase in sales volume of our summer collection of apparel products. The positive effect of our increase in sales volume was partially offset by a decrease in average sales price. The average sales price of our apparel products decreased in 2006 from the average sales price in 2005 because we sold proportionally more of our apparel products from our summer collection in 2006, which generally had a lower average sales price than our winter collection.

Accessories

. Revenue from sales of our accessory products increased by approximately 357.0%, from RMB9.3 million for the year ended December 31, 2005 to RMB42.5 million for the year ended December 31, 2006, primarily as a result of our increased sales volume attributable to the expansion of our collection of accessory products.

Cost of Sales

Cost of Sales increased by approximately 72.1%, from RMB544.5 million for the year ended December 31, 2005 to RMB936.9 million in the year ended December 31, 2006, primarily due to an increase in our outsourced production volume and, to a lesser extent, an increase in our internal production volume, in each case, as a result of increased sales volume. The cost of our own production increased by approximately 30.5%, from RMB311.0 million for the year ended December 31, 2005 to RMB405.7 million for the year ended December 31, 2006, primarily as a result of an increase in our internal production volume for footwear due to our addition of three new production lines in 2006, resulting in an increase of approximately 12.3% in our cost of raw materials, an increase of approximately 119.9% in the cost of our direct labor and an increase of approximately 139.0% in our overhead cost. Our cost of outsourced production increased by 92.8%, from RMB233.5 million to RMB450.3 million, which was driven by a higher consumer demand for our products.

— 152 — FINANCIAL INFORMATION

Footwear

. Cost of sales for our footwear products increased by approximately 61.3%, from RMB371.1 million for the year ended December 31, 2005 to RMB598.6 million for the year ended December 31, 2006, primarily as a result of an increase in production volume of our footwear products.

Apparel

. Cost of sales for our apparel products increased by approximately 85.2%, from RMB165.1 million for the year ended December 31, 2005 to RMB305.8 million for the year ended December 31, 2006, primarily as a result of an increase in outsourced production volume for our apparel products, which at the time were all produced on an outsourced basis.

Accessories

. Cost of sales for our accessory products increased by approximately 291.6%, from RMB8.3 million for the year ended December 31, 2005 to RMB32.5 million for the year ended December 31, 2006, primarily as a result of an increase in outsourced production volume of our accessory products.

Gross profit and gross profit margin

Gross profit increased by approximately 149.0%, from RMB125.8 million for the year ended December 31, 2005 to RMB313.2 million for the year ended December 31, 2006, primarily as a result of an increase in sales across all product categories during this period. Our overall gross profit margin increased from 18.8% in 2005 to 25.1% in 2006.

Footwear

. Gross profit from our footwear products increased by approximately 165.8%, from RMB74.9 million for the year ended December 31, 2005 to RMB199.1 million for the year ended December 31, 2006. The gross profit margin for our footwear products increased from approximately 16.8% for the year ended December 31, 2005 to approximately 25.0% for the year ended December 31, 2006. This increase in gross profit margin was a result of an increase in our turnover for footwear products, combined with more effective control over our cost of sales driven by volume discounts for the purchase of raw materials and increased production efficiencies.

Apparel

. Gross profit from our apparel products increased by approximately 108.6%, from RMB49.9 million for the year ended December 31, 2005 to RMB104.1 million for the year ended December 31, 2006. The gross profit margin for our apparel products increased from approximately 23.2% for the year ended December 31, 2005 to approximately 25.4% for the year ended December 31, 2006. The increase in gross profit margin for our apparel products was primarily a result of an increase in our turnover for our apparel products, combined with cost savings realized from economies of scale in our outsourced production due to increased production volume and volume discounts.

— 153 — FINANCIAL INFORMATION

Accessories

. Gross profit from our accessory products increased from RMB1.0 million for the year ended December 31, 2005 to RMB10.0 million for the year ended December 31, 2006. Gross profit margin for our accessory products rose from approximately 10.7% for the year ended December 31, 2005 to approximately 23.5% for the year ended December 31, 2006. This increase was primarily due to a broadening of our product collection, including some newly introduced products that had a higher profit margin.

Other revenue

Other revenue increased by approximately 40.0%, from RMB1.5 million for the year ended December 31, 2005 to RMB2.1 million in the year ended December 31, 2006, primarily as a result of higher interest income.

Other net income

Other net income amounted to RMB0.5 million for the year ended December 31, 2006, which represented a gain on our disposal of certain fixed assets owned by ANTA Fujian.

Selling and distribution expenses

Selling and distribution expenses increased by approximately 116.2%, from RMB61.2 million for the year ended December 31, 2005 to RMB132.3 million for the year ended December 31, 2006. This increase was primarily due to an increase of approximately 119.1% in promotional and marketing expenses, from RMB47.3 million in 2005 to RMB103.7 million in 2006, as a result of an increase in our expenditures on advertisements and sponsorship of sporting events in 2006. Promotional and marketing expenses represented approximately 8.3% of our turnover in the year ended December 31, 2006, as compared to approximately 7.1% of our turnover in the year ended December 31, 2005.

Administrative costs

Administrative expenses increased by approximately 134.7%, from RMB15.0 million for the year ended December 31, 2005 to RMB35.2 million for the year ended December 31, 2006, primarily as a result of an increase in salaries due to the further expansion of our management team and an increase in depreciation expenses due to the completion in July 2005 of our new corporate headquarters, which allowed us to take a full year of depreciation in 2006, as compared to a half year of depreciation in 2005.

Profit from operations

Profit from operations increased by approximately 190.2% from RMB51.1 million for the year ended December 31, 2005 to RMB148.3 million for the year ended December 31, 2006, primarily as a result of the factors described above.

Finance costs

Finance costs decreased by approximately 66.7%, from RMB0.9 million for the year ended December 31, 2005 to RMB0.3 million in the year ended December 31, 2006, primarily as a result of a reduction in our average bank borrowings.

— 154 — FINANCIAL INFORMATION

Income tax

The income tax for each of the years ended December 31, 2006 and 2005 was primarily related to the operations of ANTA Fujian and ANTA Jinjiang, predecessor entities of our Group, because ANTA China enjoyed a 100% income tax exemption in 2005 and 2006. However, ANTA Fujian and ANTA Jinjiang were subject to tax rates of 27% and 33%, respectively and thus paid enterprise income taxes in 2005 and 2006.

Income tax decreased from RMB2.2 million for the year ended December 31, 2005 to RMB0.6 million for the year ended December 31, 2006. Our effective tax rate decreased from 4.3% in 2005 to 0.4% in 2006. The decrease in income tax expense and effective income tax rate were primarily due to the increase in ANTA China’s contribution to our Group’s turnover and profits in 2006 compared to 2005, and the fact that ANTA China was exempted from income tax in both 2005 and 2006. The transfer of business from ANTA Fujian to ANTA China did not contribute to the decrease in our income tax expense because ANTA Fujian had paid in full its income tax incurred prior to the date of the transfer.

The tax provision made in 2004 and 2005 includes the enterprise income tax payable on the profit of ANTA Fujian at the applicable tax rate of 27%.

Net profit

Due to the factors described above, our net profit increased by approximately 207.1%, from RMB48.0 million for the year ended December 31, 2005 to RMB147.4 million for the year ended December 31, 2006.

Dividend

We declared a dividend of RMB22.9 million during the year ended December 31, 2006, of which RMB1.6 million, representing the total dividend payments payable to ANTA Jinjiang’s equity holders, was distributed in 2006 and RMB21.3 million, representing the total dividend payments payable to ANTA Fujian’s equity holders, was distributed in January 2007. The dividend payment to ANTA Fujian was settled in January 2007 by netting against the amount due from a related party and one of our Controlling Shareholders, amounting to RMB12.8 million and RMB8.5 million, respectively. The aforesaid related party and Controlling Shareholder received the dividend payment on behalf of all the Controlling Shareholders in proportion to their shareholding in the Company, pursuant to the loan agreements entered into by these parties in September 2007.

No dividends were declared or distributed in the year ended December 31, 2005.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

Turnover

Turnover increased by approximately 115.2%, from RMB311.5 million for the year ended December 31, 2004 to RMB670.3 million for the year ended December 31, 2005, primarily as a result of a significant increase in our sales volume due to a broadening of our product offerings, with a particular increase in our offering of apparel products. In addition, the average sales price of our footwear products increased by approximately 19.2% for the year ended December 31, 2005. The increase in our average sales price and sales volume in 2005 were attributable to the increased recognition of our ANTA brand as a result of our intensive marketing and brand promotion efforts in 2004 and 2005.

The number of our distributors increased from 12 as of December 31, 2004 to 28 as of December 31, 2005. Our turnover increased in all of our sales regions in the year ended December 31, 2005 compared to the year ended December 31, 2004. This increase was primarily driven by the increased sales in our winter

— 155 — FINANCIAL INFORMATION collection of apparel products, the expansion of the ANTA sales network and increased brand recognition. During this period, we focused our development primarily in the distribution network of the southern, western and northern regions and, as a result, the growth of our turnover in those regions outpaced the growth of our turnover in the eastern region. Our sales also benefited from the general increase in demand for sportswear products in the PRC in 2005.

Footwear

. Revenue from sales of our footwear products increased by approximately 67.7%, from RMB265.9 million for the year ended December 31, 2004 to RMB446.0 million for the year ended December 31, 2005, primarily as a result of an increase of approximately 41.1% in sales volume and an increase of approximately 19.2% in average sales price of our footwear products.

Apparel

. Revenue from sales of our apparel products increased by approximately 421.8%, from RMB41.2 million for the year ended December 31, 2004 to RMB215.0 million for the year ended December 31, 2005, primarily as a result of an increase of approximately 400.0% in sales volume attributable to a broadening of our apparel product range and an expansion of our overall distribution network.

Accessories

. Revenue from sales of our accessory products increased by approximately 111.4%, from RMB4.4 million for the year ended December 31, 2004 to RMB9.3 million for the year ended December 31, 2005, primarily as a result of increased sales volume attributable to the expansion of our range of accessory products.

Cost of sales

Cost of sales increased by approximately 103.4%, from RMB267.7 million for the year ended December 31, 2004 to RMB544.5 million for the year ended December 31, 2005, primarily as a result of an increase in production volume, largely for outsourced production. Our cost of internal production increased by approximately 68.8%, from RMB184.2 million for the year ended December 31, 2004 to RMB311.0 million for the year ended December 31, 2005, primarily as a result of an increase of approximately 57.9% in our cost of raw materials, an increase of approximately246.8%inourcostofdirectlaborandanincrease of approximately 111.7% in our overhead cost. Our cost of outsourced production increased by 179.6%, from RMB83.5 million for the year ended December 31, 2004 to RMB233.5 million for the year ended December 31, 2005 mainly due to increased sales orders.

Footwear

. Cost of sales for our footwear products increased by approximately 64.6%, from RMB225.4 million for the year ended December 31, 2004 to RMB371.1 million for the year ended December 31, 2005, primarily as a result of increased production volume and increased prices of raw materials.

— 156 — FINANCIAL INFORMATION

Apparel

. Cost of sales for our apparel products increased by approximately 331.1%, from RMB38.3 million for the year ended December 31, 2004 to RMB165.1 million for the year ended December 31, 2005, primarily as a result of an increase in volume of purchases of our apparel products from contract manufacturers.

Accessories

. Cost of sales for our accessory products increased by approximately 107.5%, from RMB4.0 million for the year ended December 31, 2004 to RMB8.3 million for the year ended December 31, 2005, primarily as a result of an increase in volume of purchases of our accessory products from contract manufacturers.

Gross profit and gross profit margin

Gross profit increased by approximately 187.2%, from RMB43.8 million for the year ended December 31, 2004 to RMB125.8 million for the year ended December 31, 2005, primarily as a result of the increase in the sales of our footwear and apparel products during this period. Our overall gross profit margin increased from 14.1% in 2004 to 18.8% in 2005, primarily due to the proportionally greater amount of apparel products that were sold during this period and the fact that apparel products generally had a higher profit margin than footwear products in 2005.

Footwear

. Gross profit from our footwear products increased by approximately 84.9%, from RMB40.5 million for the year ended December 31, 2004 to RMB74.9 million for the year ended December 31, 2005. The gross profit margin for our footwear products remained relatively stable, at approximately 15.2% for the year ended December 31, 2004 and approximately 16.8% for the year ended December 31, 2005.

Apparel

. Gross profit from our apparel products increased significantly, from RMB2.9 million for the year ended December 31, 2004 to RMB49.9 million for the year ended December 31, 2005. The gross profit margin for apparel products increased from approximately 6.9% for the year ended December 31, 2004 to approximately 23.2% for the year ended December 31, 2005. This increase was primarily due to cost savings from volume purchase discounts from our suppliers as a result of greater sales in apparel, which increased due to the factors described above. We were also able to realize cost savings from economies of scale in our outsourcing production as a result of our apparel sales volume.

Accessories

. Gross profit from our accessory products remained stable, increasing from RMB0.4 million for the year ended December 31, 2004 to RMB1.0 million for the year ended December 31, 2005. Gross profit margin for our accessory product in 2004 was approximately 9.5%.

— 157 — FINANCIAL INFORMATION

Other revenue

Other revenue increased by RMB1.0 million, or approximately 200.0%, from RMB0.5 million for the year ended December 31, 2004 to RMB1.5 million for the year ended December 31, 2005, primarily as a result of the increase in government grants for our technological innovations.

Other net income

We did not have any other net income for the years ended December 31, 2004 and 2005.

Selling and distribution expenses

Selling and distribution expenses increased by approximately 50.4%, from RMB40.7 million for the year ended December 31, 2004 to RMB61.2 million for the year ended December 31, 2005. This increase was primarily a result of an increase of 62.5% in promotional and marketing expenses, from RMB29.1 million in 2004 to RMB47.3 million in 2005, due to an increase in our expenditure on advertisements and sponsorship of sporting events in 2005. Promotional and marketing expenses represented approximately 7.1% of our turnover in the year ended December 31, 2005, as compared to approximately 9.4% of our turnover in the year ended December 31, 2004.

Administrative costs

Administrative costs increased by approximately 74.4%, from RMB8.6 million for the year ended December 31, 2004 to RMB15.0 million for the year ended December 31, 2005, primarily as a result of the continued expansion of our scale of operations, which led to an increase in staff costs for our administrative personnel and an increase in utilities and related expenses.

Profit/loss from operations

We achieved a profit from operations of RMB51.1 million for the year ended December 31, 2005, primarily due to the factors described above. We recorded a loss from operations of RMB5.0 million for the year ended December 31, 2004, primarily due to the following reasons:

. We incurred significant expenditures in the amount of RMB29.1 million on brand promotional and marketing activities in 2004. In 2004, we focused on building our ANTA brand and increasing our brand position. We carried out intensive marketing and promotional activities and utilized various means of media advertising such as television, internet and print network in 2004. In addition, we sponsored well-known sporting events and sports leagues in the PRC, such as the Chinese Basketball Association and China National Volleyball League in that year.

. Since we only started selling apparel and accessories in 2002 and 2003, respectively, we set lower prices for these newly introduced products so as to promote these products to our target consumer groups and penetrate into new markets. This resulted in the particularly low gross profit margin of 6.9% and 9.5% for our apparel and accessory products, respectively, as compared to the gross profit margin of 15.2% for our footwear products in 2004. Our overall gross profit for the year ended December 31, 2004 amounted to RMB43.8 million, representing a gross profit margin of 14.1%.

— 158 — FINANCIAL INFORMATION

We believe that the factors discussed above are not likely to result in net losses in the future. Due to our efforts in building brand recognition and promoting our ANTA products, our revenue, gross profit and net profits for the years ended December 31, 2005 and 2006 improved significantly. The increase in gross profit was more than that in advertising expenses and other operating expenses, we therefore generated net profits in 2005 and 2006.

Finance costs

Finance costs decreased by approximately 40.0%, from RMB1.5 million for the year ended December 31, 2004 to RMB0.9 million for the year ended December 31, 2005, primarily as a result of a decrease in our level of bank borrowings.

Income tax

Our income tax increased from RMB1.9 million for the year ended December 31, 2004 to RMB2.2 million for the year ended December 31, 2005. Our effective income tax rate increased from negative 29.2% to positive 4.3%. The increase in income tax expense and effective income tax rate in 2005 were primarily duetoanincreaseinprofitsgeneratedbyANTAFujianandANTAJinjiang.

We incurred an income tax of RMB1.9 million for the year ended December 31, 2004, despite a loss before taxation of RMB6.5 million we recorded for the year on a combined basis. The reason is that although ANTA China recorded a net loss in 2004 and therefore did not incur any tax liability, ANTA Fujian and ANTA Jinjiang, our predecessor entities which conducted the majority of our Group’s operations in 2004, both recorded a profit before taxation in 2004. Since our Group’s income tax was not calculated on a consolidated basis and since ANTA Fujian and ANTA Jinjiang are subject to enterprise income taxes at the applicable tax rates of 27% and 33%, respectively, these entities incurred tax liabilities. As a result, our Group incurred an income tax of RMB1.9 million in 2004 despite the fact that we had a loss before taxation on a combined basis.

For the year ended December 31, 2005, ANTA China, ANTA Fujian and ANTA Jinjiang all made taxable profits. ANTA China enjoyed a 100% income tax exemption in 2005, whereas ANTA Fujian and ANTA Jinjiang continued to be subject to applicable tax rates of 27% and 33%, respectively.

The tax provision made in 2005 includes the enterprise income tax payable on the profit of ANTA Fujian at the applicable tax rate of 27%.

Net profit

Net profit increased by RMB56.4 million, from a net loss of RMB8.4 million for the year ended December 31, 2004 to a net profit of RMB48.0 million for the year ended December 31, 2005, primarily as a result of the factors described above.

Dividend

No dividend was declared or distributed in 2004 or 2005.

LIQUIDITY AND CAPITAL RESOURCES

On a combined basis, we fund our operations primarily from cash flow from operating activities and proceeds of bank borrowings. We require cash primarily for:

. our working capital requirements, such as product development and manufacturing; and

— 159 — FINANCIAL INFORMATION

. capital expenditures related to purchases of property, plant and equipment.

The following table is a summary of our cash flows for the periods indicated:

Years ended December 31, 2004 2005 2006 RMB (million) RMB (million) RMB (million)

Net cash (used in)/generated from operating activities ...... (19.6) 40.6 155.2

Netcashusedininvestingactivities ...... (38.4) (72.2) (83.4)

Net cash generated from financing activities ..... 65.5 63.0 34.6

Net increase in cash and cash equivalents ...... 7.5 31.4 106.4

Effect of foreign exchange rate changes...... — (1.2) —

Cash and cash equivalents at January 1 ...... 32.2 39.7 69.9

Cash and cash equivalents at December 31 ...... 39.7 69.9 176.3

Operating activities

We derive our cash inflow from operating activities principally from the receipt of payments for the sale of our products. Our cash outflow from operating activities is principally for purchases of raw materials and payment of outsourced production costs.

In the year ended December 31, 2006, we had net cash generated from operating activities of RMB155.2 million, which was primarily contributed by operating profit before changes in working capital of RMB158.8 million and an increase in trade and other payables of RMB229.6 million. These cash inflows were partially offset by an increase in trade and other receivables of RMB96.1 million and an increase in inventories of RMB95.3 million. The increase in trade and other receivables was primarily due to advances made to suppliers for the purchase of inventories in anticipation of future sales in early 2007. The increases in inventories and the increase in trade and other payables were both primarily due to increased purchases of raw materials and increased outsourced production from our contract manufacturers in order to meet the demand for our products.

In the year ended December 31, 2005, we had net cash inflows from operating activities of RMB40.6 million, primarily contributed by operating profit before changes in working capital of RMB59.5 million and an increase of RMB47.3 million in trade and other payables. These cash inflows were partially offset by an increase in inventories of RMB33.1 million and an increase in trade and other receivables of RMB11.3 million. The increases in inventories and trade and other payables were primarily due to increased purchases of raw materials in order to meet the significant growth in the demand for our products. The increase in trade and other receivables resulted primarily from our sales growth.

In the year ended December 31, 2004, we had net cash outflows from operating activities of RMB19.6 million, primarily due to an increase of RMB31.0 million in our trade and other receivables and an increase of RMB13.7 million in inventories, partially offset by an increase of RMB13.3 million in trade and other payables. Both of the increase in trade and other receivables and the increase in inventories were primarily

— 160 — FINANCIAL INFORMATION due to the increase in our sales, while the increase in trade and other payables was primarily due to the increased purchases of raw materials and increase in payment to contract manufacturers due to the increased sales of our products.

Investing activities

Our cash outflow for investing activities is principally for purchases of property, plant and equipment, payment for construction in progress for our office building and production facilities in Fujian and lease prepayments.

In the year ended December 31, 2006, we had net cash outflows from investing activities of RMB83.4 million, which was primarily due to our payment for construction of new production lines, staff quarters and an office building in the amount of approximately RMB54.1 million, and the purchase of equipment used for the production lines in Fujian in the amount of RMB28.3 million.

In the year ended December 31, 2005, we had net cash outflows from investing activities of RMB72.2 million, which was primarily due to payments for construction in progress with respect to our office and factory buildings in Jinjiang in the amount of RMB27.9 million, the purchase of property, plant and equipment in the amount of RMB30.1 million relating to our construction of new production lines and staff quarters, and payment for lease prepayments with respect to land use rights in the amount of RMB13.6 million.

In the year ended December 31, 2004, we had net cash outflows from investing activities of RMB38.4 million primarily due to payments for construction in progress with respect to our office and factory buildings in Jinjiang in the amount of RMB32.2 million and the purchase of property, plant and equipment in the amount of RMB5.9 million.

Financing activities

We derive our cash inflow from financing activities principally from an increase in amounts due to related parties, bank borrowings, advances from our Controlling Shareholders and proceeds from capital injection. Our cash outflow from financing activities relates primarily to our repayment of principal and interest on our bank loans.

In the year ended December 31, 2006, we had net cash inflows from financing activities of RMB34.6 million, which were primarily due to proceeds from bank loans of RMB100.0 million for working capital purposes, partially offset by the repayments of bank loans during the year in the amount of RMB50.0 million and a distribution of capital in the amount of RMB10.0 million by ANTA Jinjiang, a predecessor entity, on its dissolution in November 2006.

In the year ended December 31, 2005, we had net cash inflows from financing activities of RMB63.0 million, which were primarily due to an increase in advances from our Controlling Shareholders in the amount of RMB93.9 million to support the expansion of our production lines and business, and RMB80.0 million in proceeds from bank loans to support our short-term working capital needs. These cash inflows were partially offset by a repayment of bank loans in the amount of RMB110.0 million. The advances from our Controlling Shareholders were interest free and repayable upon demand.

In the year ended December 31, 2004, we had net cash inflows from financing activities of RMB65.5 million, which were primarily due to an increase in RMB40.3 million in advances from some of our Controlling Shareholders, which were at the same terms as the advances we received in 2005 as described above, to support the investments in our production facilities and the construction of our office and factory

— 161 — FINANCIAL INFORMATION buildings in Jinjiang. The increase was also due to the proceeds from bank loans of RMB40.0 million and proceeds from capital injections of RMB16.7 million primarily contributed by ANTA China and ANTA Jinjiang. These cash inflows were partially offset by a repayment of bank loans in the amount of RMB30.0 million.

CONTRACTUAL AND CAPITAL COMMITMENTS

Contractual commitments

As at December 31, 2004, 2005 and 2006, we had commitments for future minimum lease payments under non-cancellable operating leases for production facilities and offices, which become due as follows:

As at December 31, Minimum lease payments under non-cancellable 2004 2005 2006 operating Leases RMB (million) RMB (million) RMB (million)

Within1year...... — — 3.5

After1yearbutwithin5years...... — — 5.5

Total...... — — 9.0

Capital commitments

We had the following capital commitments which were not provided for in our combined financial statements:

As at December 31, 2004 2005 2006 Capital commitments RMB (million) RMB (million) RMB (million)

Contracted, but not provided for in the combined financialstatements...... 15.8 10.3 22.5

Authorized,butnotcontractedfor...... 43.7 56.1 271.8

Total...... 59.5 66.4 294.3

The capital commitments as at December 31, 2006 were primarily related to the expansion of our footwear production facilities in Jinjiang and the construction and further expansion of our own apparel production bases in Xiamen and Changting. We expect to finance the above capital expenditures primarily with the cash generated from our operating activities and a portion of the net proceeds from the Global Offering.

— 162 — FINANCIAL INFORMATION

CAPITAL EXPENDITURES

The following table sets out our Group’s historical capital expenditures during the Track Record Period:

For the years ended December 31, 2004 2005 2006 Historical capital expenditures RMB (million) RMB (million) RMB (million)

Property,plantandequipment...... 8.1 30.1 28.3 Constructioninprogress...... 28.1 29.4 53.1 Landuserights...... — 13.6 0.1 Intangibleassets...... 0.5 1.2 2.1

Totalcapitalexpenditures...... 36.7 74.3 83.6

Our Group’s capital expenditures in 2004, 2005 and 2006 principally consisted of expenditures on construction in progress for office and factory buildings, and purchases of equipment for our Jinjiang production facilities.

The following table sets out our Group’s projected capital expenditures for the years ended December 31, 2007, 2008 and 2009:

For the years ended December 31, 2007 2008 2009 Projected capital expenditures RMB (million) RMB (million) RMB (million)

Officerenovationandequipment...... 12.5 15.7 5.9 Construction in progress (property, plant & equipment) 186.0 255.0 203.0 Landuserights...... 18.0 — 10.0 Intangibleassets...... 20.9 71.1 11.1 Retailbusiness(renovationcosts)...... 56.9 42.4 120.2

Totalcapitalexpenditures...... 294.3 384.2 350.2

We expect that the capital expenditures planned for 2007 to 2009 will be primarily used for construction in progress and renovation of retail outlets for our retail business. Constructioninprogress primarily represents projected capital expenditures for the expansion of our footwear production facilities in Jinjiang and the construction and further expansion of our own apparel production bases in Xiamen and Changting, Fujian. Retail business primarily represents projected capital expenditures for renovation of our retail outlets selling adidas, Reebok and Kappa branded sportswear products, our retail sports complexes and our ANTA flagship stores.

We expect to fund our contractual commitments and capital expenditures principally through the net proceeds we receive from the Global Offering, cash generated from operating activities and proceeds from bank loans. We believe that these sources will be sufficient to finance our contractual commitments and capital expenditure needs for the next 12 months.

— 163 — FINANCIAL INFORMATION

NET CURRENT ASSETS/LIABILITIES

Details of our current assets and current liabilities for the Track Record Period are as follows:

As at December 31, 2004 2005 2006 RMB (million) RMB (million) RMB (million)

Current assets Otherfinancialassets...... — — 1.2 Inventories...... 26.1 59.2 154.5 Tradeandotherreceivables...... 94.7 106.0 202.1 Amountsduefromrelatedparties...... 7.2 15.2 52.2 Pledgeddeposits...... — 1.5 4.9 Cashandcashequivalents...... 39.7 69.9 176.3

167.7 251.8 591.2

Current liabilities Tradeandotherpayables...... 47.5 96.4 325.1 Advances from the Controlling Shareholders of the Company...... 45.9 236.2 220.5 Amountsduetorelatedparties...... 12.6 2.1 1.6 Bankloans...... 30.0 — 50.0 Dividendpayable...... — — 21.3 Currenttaxation...... 0.7 0.3 —

136.7 335.0 618.5

Net current assets/(liabilities) ...... 31.0 (83.2) (27.3)

The combined assets and liabilities as at December 31, 2006 included certain assets and liabilities that were not transferred to our Group and were retained by ANTA Fujian, a predecessor entity of our Group. These assets and liabilities were reflected as a deemed distribution upon our Company becoming the holding company of our Group on June 16, 2007. Please see ‘‘Recent Developments’’ in this section for further details of these assets and liabilities.

Other Financial Assets

Other financial assets of RMB1.2 million represented an investment in 6% of the equity interest in (Jinjiang Economic News Development Co. Ltd.*) made in May 2006 by ANTA Fujian, a predecessor of our Group. The investment was not transferred to our Group as the investment does not form part of the relevant assets and liabilities of our sportswear production and business. Instead, it was retained by ANTA Fujian and formed part of the deemed distribution as further described in ‘‘Recent Developments’’ in this section.

Amounts due from/to Related Parties and Advances from the Controlling Shareholders

During the Track Record Period, we traded with certain related parties by purchasing and selling certain raw materials and sportswear products from/to those related parties. All these transactions were conducted on normal commercial terms and in the ordinary course of business.

— 164 — FINANCIAL INFORMATION

We also made advances to or received advances from certain related parties and our Controlling Shareholders. The advances made to certain related parties are primarily used to support the temporary working capital requirements of those related parties. The advances we received from related parties and our Controlling Shareholders mainly served as short term funds to support our expansion in the footwear production facilities and the construction of our office building in Jinjiang. These advances were unsecured, interest-free and repayable on demand.

Prior to the Listing, we received settlements of RMB36.0 million in respect of the amounts due from related parties and we made settlements amounted to RMB11.6 million in respect of the amounts due to related parties. All other balances with related parties as at December 31, 2006 had been subsequently settled in January and February 2007. All of such balances were settled in cash, except for an amount due from certain related parties of RMB21.3 million, which was settled by netting against the dividend payable by ANTA Fujian to those parties. As such, the amounts due from related parties and amounts due to related parties as at December 31, 2006 were settled. On January 26, 2007, we repaid HK$75.0 million (equivalent to approximately RMB75.4 million at a conversion rate of HK$1.000 to RMB1.005) of the advances from our Controlling Shareholders, while the remaining balance of approximately HK$144.4 million (equivalent to approximately RMB145.1 million at a conversion rate of HK$1.000 to RMB1.005) was assigned to Anta Enterprise for a consideration of HK$1.00 on April 4, 2007. Upon completion of the assignment, we did not have any outstanding advances from our Controlling Shareholders. After the assignment was completed and as at April 30, 2007, we had a net current asset position according to our unaudited consolidated management accounts. Such assignment resulted in a decrease in our current liabilities of approximately HK$144.4 million and a corresponding increase in our capital reserve. Please refer to the section headed ‘‘History and Corporate Structure’’ of this prospectus for further information on the assignment.

Net Current Assets or Liabilities

Our net working capital improved by approximately 67.2% during the period from December 31, 2005 to December 31, 2006. We recorded a net current liabilities position of RMB27.3 million as at December 31, 2006, compared to a net current liabilities position of RMB83.2 million as at December 31, 2005. This improvement was primarily due to the high inflow of cash generated from our increased turnover during this period.

Our net working capital declined from a net current assets position of RMB31.0 million as at December 31, 2004 to a net current liabilities position of RMB83.2 million as at December 31, 2005. This decrease was primarily due to an increase in advances from our Controlling Shareholders, in the amount of RMB190.3 million, which have been used to fund our Group’s investments in the new production facilities and the construction of our office building in Jinjiang.

We had net current liabilities positions as at December 31, 2005 and December 31, 2006 primarily due to advances from our Controlling Shareholder, which were RMB236.2 million and RMB220.5 million, respectively. As described above in ‘‘Amounts Due from/to Related Parties and Advances from the Controlling Shareholders’’, we settled these advances from our Controlling Shareholders prior to the Listing.

Based on the unaudited combined management accounts of our Group as at April 30, 2007, the Group had net current assets of approximately RMB174.1 million. The current assets of approximately RMB812.0 million mainly comprised inventories of RMB296.0 million and trade receivables of approximately RMB190.4 million; cash and cash equivalents of approximately RMB180.8 million; and current liabilities of approximately RMB637.9 million mainly comprised trade and bills payables of approximately RMB379.0 million and other payables of approximately RMB241.3 million.

— 165 — FINANCIAL INFORMATION

INVENTORY ANALYSIS

During the Track Record Period, inventories were one of the principal components of our current assets. It is imperative that we manage and control our level of inventories. The value of our inventory accounted for approximately 15.5%, 23.5% and 26.1% of our total current assets for the years ended December 31, 2004, 2005 and 2006, respectively.

The following table is a summary of our balance of inventories for the Track Record Period:

As at December 31, 2004 2005 2006 Inventories RMB (million) RMB (million) RMB (million)

Rawmaterials...... 9.9 34.9 102.3 Workinprogress...... — 0.5 2.4 Finishedgoods...... 16.2 23.8 49.8

Total...... 26.1 59.2 154.5

Our inventories increased by approximately 126.8%, from RMB26.1 million as at December 31, 2004 to RMB59.2 million as at December 31, 2005, primarily due to an increase in our purchase of raw materials, which accounted for approximately RMB25.0 million of the RMB33.1 million increase in our inventories during 2005. We increased our purchases of raw materials in 2005 to support our expected increase in production of footwear in 2006.

Our inventories increased by approximately 161.0%, from RMB59.2 million as at December 31, 2005 to RMB154.5 million as at December 31, 2006, primarily due to an increase in our purchases of raw materials as a result of an increase in the scale of our operations to respond to the continuous increase in consumer demand for our sportswear products during this period. We purchased larger quantities of raw materials in the fourth quarter of 2006 to cope with the expected increase in future orders and production requirements in 2007. To benefit from bulk purchase discounts, we increased our purchases of certain commonly used raw materials and therefore increased our purchase of such raw materials in the fourth quarter of 2006. We believe these measures will allow us to better manage our cost of sales. Our inventory balance as at December 31, 2006 also increased as we acquired raw materials to be used by our subcontractors under our sub-contracting arrangement described in ‘‘Results of Operations — Cost of sales’’ in this section above. Such raw materials were stored in the sub-contractors’ warehouses for further processing but we retained their ownership and thus they were included as part of our inventories.

We do not have a general provisioning policy for inventories but make assessments on provisions on a case-by-case basis. During the Track Record Period, we did not make any provisions for inventories given that we usually procure the majority of our raw materials and commence production after having confirmed purchase orders with our distributors. Our raw materials are not generally susceptible to obsolescence by passage of time.

The following table sets out the average inventory turnover days for the Track Record Period:

For the year ended December 31, 2004 2005 2006

Average inventory turnover days(1) ...... 26 29 42

Note:

(1) Average inventory turnover days is equal to the average inventory divided by costs of sales and multiplied by 365 days. Average inventory equals inventory at the beginning of the year plus inventory at the end of the year and divided by two.

— 166 — FINANCIAL INFORMATION

The increase in the average inventory turnover days for the year ended December 31, 2005, compared with the year ended December 31, 2004, was predominantly due to the increase in our purchases of raw materials as a result of the increase in our production volume. The increase in the average inventory turnover days for the year ended December 31, 2006, compared with the year ended December 31, 2005, was due to a larger average inventory balance we carried as at December 31, 2006 for our increased production needs. In addition, under our sub-contracting arrangement, certain raw materials were purchased for the subcontractors and kept by them and this also contributed to the rise in the inventory turnover days.

TRADE AND OTHER RECEIVABLES

Trade receivables

The following table sets out the aging analysis of our trade receivables for the Track Record Period:

As at December 31, 2004 2005 2006 Aging analysis of trade receivables RMB (million) RMB (million) RMB (million)

Within3months...... 22.6 35.8 73.9 Over3monthsto6months...... 11.1 10.3 1.5 Over6monthsto1year...... 8.6 4.0 2.6 Over1year...... 2.4 1.3 0.3

Totaltradereceivables...... 44.7 51.4 78.3

We generally grant credit periods of between 30 to 90 days to our distributors based on their creditworthiness and credit history. Our distributors generally settle their purchases within 90 days from the date of issue of an invoice. In the past, we typically received sales proceeds from department stores within 30 days from their receipt of our ANTA products that we sold directly to them. Purchases by sole proprietors were settled by cash upon their collection of our ANTA products. Since January 2007, we no longer sell our ANTA products directly to department stores or sole proprietors and such sales are made through our distributors.

The following table sets out our average trade receivables turnover days for the Track Record Period:

For the year ended December 31, 2004 2005 2006

Average trade receivables turnover days(1) ...... 43 26 19

Note:

(1) Average trade receivables turnover days is equal to the average trade receivables divided by turnover and multiplied by 365 days. Average trade receivables is equal to trade receivables at the beginning of the year plus trade receivables at the end of the year and divided by two.

The decrease in average trade receivables turnover days over the years ended December 31, 2005 and 2006 was predominantly due to the strengthening of our credit control.

— 167 — FINANCIAL INFORMATION

Other receivables

Other receivables mainly comprise prepayment to suppliers, prepayment for promotional and marketing expenses and for land use rights.

Prepayments to suppliers amounted to RMB20.4 million, RMB33.2 million and RMB72.0 million as at December 31, 2004, 2005 and 2006, respectively. The significant increase was primarily due to the increase in sales volume of our footwear and apparel products.

Prepayments for promotional and marketing expenses amounted to RMB16.0 million, RMB7.5 million and RMB7.6 million as at December 31, 2004, 2005 and 2006, respectively.

Prepayments for land use rights amounted to RMB2.3 million, RMB1.9 million and RMB6.9 million as at December 31, 2004, 2005 and 2006, respectively.

TRADE, BILLS AND OTHER PAYABLES ANALYSIS

Trade and bills payables

Our trade and bills payables primarily relate to the purchase of raw materials from our suppliers, with credit terms of 30 to 60 days for trade payables and up to 180 days for bills payable. For the year ended December 31, 2006, our trade and bills payables increased significantly, primarily because we purchased a larger quantity of raw materials to support the growth in our operations and from the second half of 2006, some of our suppliers granted us longer settlement periods. Our trade and bills payables days are generally in line with our payment terms.

The following table sets out the aging analysis of our trade and bills payables for the Track Record Period:

As at December 31, 2004 2005 2006 Aging analysis of trade and bills payables RMB (million) RMB (million) RMB (million)

Within3months...... 13.2 20.2 231.8 Over3monthsto6months...... 2.7 24.5 7.6 Over6monthsto1year...... 4.0 10.0 7.2 Over1year...... 0.6 4.8 6.1

Total trade and bills payables ...... 20.5 59.5 252.7

The following table sets out our average trade and bills payables turnover days for the Track Record Period:

For the year ended December 31, 2004 2005 2006

Average trade and bills payables turnover days(1) . . . 25 27 61

Note:

(1) Average trade and bills payables turnover days is equal to the average trade and bills payables divided by cost of sales and multiplied by 365 days. Average trade and bills payables is equal to the trade and bills payables at the beginning of the year plus trade and bills payables at the end of the year and divided by two.

— 168 — FINANCIAL INFORMATION

Our average trade and bills payables turnover days for the years ended December 31, 2004 and 2005 remained stable at 25 days and 27 days, respectively. We recorded an increase of 34 days in the average trade and bills payables turnover days for the year ended December 31, 2006 mainly due to our improved bargaining position relative to our suppliers and the increased amount of bills payables, which have a longer settlement period. We believe our continued growth in sales and increased purchasing power enabled us to obtain longer settlement terms.

Other payables

Other payables mainly comprise payables for construction in progress and accruals for expenses. The latter primarily relates to accrued staff costs and staff benefits.

Payables for construction in progress amounted to RMB11.2 million, RMB12.8 million and RMB11.8 million as at December 31, 2004, 2005, and 2006, respectively. The amounts represented amounts payable to contractors for the construction work of the office building and the main factory building in Jinjiang.

Accruals for expenses amounted to RMB5.0 million, RMB9.3 million and RMB22.9 million, respectively. The increase in the balance mainly resulted from the increase in the hiring of new staff due to our expansion and the increase in accrual for advertising expense and sponsorship expense for sports campaign.

WORKING CAPITAL

Our Directors are of the opinion that, taking into consideration the financial resources presently available to our Group, including banking facilities and other internal resources, and the estimated net proceeds of the Global Offering, our Group has sufficient working capital for its working capital requirements at least in the next 12 months commencing from the date of this prospectus.

OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS

As of the Latest Practicable Date, our Group has not entered into any off-balance sheet transactions.

INDEBTEDNESS

Borrowings

The following table sets out our borrowings as at December 31, 2004, 2005 and 2006, by maturity date:

As at December 31, 2004 2005 2006 RMB (million) RMB (million) RMB (million)

Within1year...... 30.0 — 50.0

The following table sets out the weighted average effective interest rates as at the balance sheet dates indicated:

As at December 31, 2004 2005 2006

Weighted average effective interest rates —bankborrowings...... 4.78% 5.02% 5.51%

— 169 — FINANCIAL INFORMATION

The bank loan as at December 31, 2004 was unsecured and was fully settled in 2005. The bank loan as at December 31, 2006 was unsecured and was fully settled prior to April 30, 2007.

As at April 30, 2007, our Group’s indebtedness consisted of RMB10.0 million of a short-term unsecured bank borrowing which was subject to a fixed interest rate of 5.6304% for our working capital requirements, RMB10.6 million of operating lease commitments, RMB44.0 million of capital commitments and RMB10.5 million of bills payables. We have agreed to secure the bank borrowing of RMB10.0 million mentioned above by granting a mortgage over a newly purchased manufacturing plant when we obtain its title documents. We confirm that there has not been any material change in our indebtedness since April 30, 2007.

Except as disclosed above, our Group did not have outstanding mortgages, charges, debentures, loan capital, bank overdrafts, loans, debt securities or other similar indebtedness, finance leases or hire purchase commitments, liabilities under acceptances or acceptance credits or any guarantees outstanding as at December 31, 2006.

CONTINGENT LIABILITIES

As at December 31, 2006, our Group had no material contingent liabilities. Our Group is not involved in any current material legal proceedings, nor is our Group aware of any pending or potential material legal proceedings involving our Group. If our Group was involved in such material legalproceedings,itwould record any loss contingencies when, based on information then available, it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated.

QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISKS

Interest Rate Risk

Our exposure to interest rate risks relates to our bank borrowings. We have not entered into any interest rate hedging contracts or any other derivative financial instruments. As of December 31, 2006, substantially all of our debt was denominated in Renminbi at fixed interest rates that are subject to adjustment by our lenders in accordance with changes in relevant PBOC regulations. Upward fluctuations in interest rates will increase the costs of both our existing and new debts. We believe we have sufficient working capital and do not expect to significantly increase our bank borrowings in the short to medium term. Therefore, any fluctuations in interest rates will not have a material impact on our financial condition.

ForeignExchangeRateFluctuationRisk

Our transactions are primarily settled in Renminbi. The value of the Renminbi is subject to changes in the PRC Government’s policies and depends to a large extent on domestic and international economic and political developments. We believe that our foreign exchange risk is not significant and we therefore have not used any forward contracts, currency borrowings or other means to hedge our foreign exchange rate exposure. A 1.0% increase or decrease in the value of Renminbi would not have a material impact on our operating results.

Credit Risk

Our cash and cash equivalents are deposited principally with state-owned banks in the PRC. Our credit risk is related to our trade receivables and cash, which are primarily concentrated in our five largest customers for the Track Record Period. We have no other financial assets that carry significant exposure to credit risk. We adopt a credit control policy under which the credit period we offer to each of our

— 170 — FINANCIAL INFORMATION distributors varies, according to our assessment of the creditworthiness, credit history and our business relationship with that distributor. We have not experienced any material losses as a result of our customers’ default in their payment obligations during the Track Record Period.

Commodity price risk

The major raw materials used in our footwear productions are derived from refining crude oil. We are exposed to commodity price risk resulting from changes in the prices of crude oil. The price of crude oil is subject to significant fluctuations and is influenced by global as well as regional supply and demand conditions. We do not have any commodity derivative instruments to hedge against the potential fluctuations in commodity prices, such as crude oil. We do not have any long-term contracts with our suppliers for any of our raw materials.

DIVIDEND POLICY

During the Track Record Period, we declared dividends of RMB22.9 million for the year ended December 31, 2006, of which RMB1.6 million was distributed in 2006 and RMB21.3 million was distributed in 2007, each representing the total dividend payments made by ANTA Jinjiang and ANTA Fujian to their respective equity holders during the Track Record Period. We intend to declare and pay dividends in the future. The payment and the amount of any dividends will depend on the results of our operations, cash flow, financial condition, statutory and regulatory restrictions on the payment of dividends, future prospects and other factors that we may consider relevant. Holders of the Shares will be entitled to receivesuchdividendsonaproratabasisaccordingtotheamountspaiduporcreditedaspaiduponthe Shares. The declaration, payment, and amount of dividends will be subject to our discretion.

Dividends may be paid only out of our distributable profits as permitted under the relevant laws. To the extent profits are distributed as dividends, such profits will not be available to be reinvested in our operations. There can be no assurance that we will be able to declare or distribute any dividend in the amount set out in any of our plan or at all. Our dividend distribution record in the past may not be used as a reference or basis to determine the level of dividends that may be declared or paid by us in the future.

Subject to the factors described above, we currently intend to recommend at the next annual shareholders meeting of our Company an annual dividend of approximately 25.0% of our net profit available for distribution to shareholders after the Global Offering.

RELATED PARTY TRANSACTIONS

With respect to the related parties transactions set out in Note 28 of the accountants’ report in Appendix I to this prospectus, our Directors confirm that these transactions were conducted on normal commercial terms and/or that such terms were no less favourable to our Group than terms available to Independent Third Parties and were fair and reasonable and in the interest of our Shareholders as a whole.

DISTRIBUTABLE RESERVES

As at December 31, 2006, we had no distributable reserves available for distribution to our shareholders.

— 171 — FINANCIAL INFORMATION

PROPERTY INTERESTS AND PROPERTY VALUATION

CB Richard Ellis, an independent property valuer, has valued our property interests as of April 30, 2007 and is of the opinion that the value of our property interests as of such date was an aggregate amount of RMB225.3 million. The full text of the letter, summary of valuation and valuation certificates with regard to such property interests are set out in Appendix IV to this prospectus.

The statement below shows the reconciliation of aggregate amounts of certain properties and lease prepayments as reflected on the audited combined financial statements as at December 31, 2006 with the valuation of these properties and lease prepayments as at April 30, 2007 as set out in Appendix IV to this prospectus.

RMB (million) RMB (million)

Valuation of properties (including the lease prepayments) owned by our Group as at April 30, 2007 as set out in the property valuation reportinAppendixIVtothisprospectus...... 225.3

Net book value of the following properties as at December 31, 2006 as set out in Appendix I to this prospectus: — Land and buildings(1) ...... 73.0 —Leaseprepayments...... 24.3 — Construction in progress(1) ...... 56.4

NetbookvalueasatDecember31,2006...... 153.7

Add: Additions of properties during the period from January 1, 2007 toApril30,2007(unaudited)...... 16.4 Less: Depreciation of land and buildings for the four months ended April30,2007(unaudited)...... (1.2) Less: Amortisation of lease prepayments for the four months ended April30,2007(unaudited)...... (0.2)

NetbookvalueasatApril30,2007...... 168.7

Netvaluationsurplus...... 56.6

(1) Among the land and buildings and construction in progress amounting to an aggregate of approximately RMB161.4 million as at December 31, 2006, an aggregate amount of approximately RMB32.0 million is excluded from the valuation in Appendix IV to this prospectus and is therefore also excluded from this reconciliation.

— 172 — FINANCIAL INFORMATION

UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS

The following statement of our unaudited pro forma adjusted net tangible assets was prepared in accordance with Rule 4.29 of the Listing Rules and is for illustration purposes only and may not give a true picture of the net tangible assets of our Group following the Global Offering. The following unaudited pro forma adjusted net tangible assets statement is set out below to illustrate the effect of the Global Offering on the net tangible assets of our Group assuming that the Global Offering was completed on December 31, 2006, the text of which is set out in Appendix I to this prospectus, and adjusted as described below. The unaudited pro forma adjusted net tangible assets statement does not form part of the accountants’ report.

Combined net Estimated net Unaudited pro tangible assets of our proceeds from Net assets not Unaudited pro forma net Group as at the Global assumed by forma net tangible assets December 31, 2006 Offering the Group tangible assets per Share (RMB’000) (RMB’000) (RMB’000) (RMB’000) (RMB) (Note 1) (Note 2) (Note 3) (Note 4)

BasedonanOfferPrice of HK$4.28 per Share...... 234,345 2,406,174 (35,522) 2,604,997 1.09

BasedonanOfferPrice of HK$5.28 per Share...... 234,345 2,976,534 (35,522) 3,175,357 1.32

Notes:

(1) The combined net tangible assets of our Group as at December 31, 2006 is arrived at based on our Group’s combined net assets of RMB237.9 million as at December 31, 2006 after deducting the intangible assets of RMB3.6 million as at December 31, 2006, both derived from our Group’s audited financial information as at December 31, 2006.

(2) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$4.28 and HK$5.28 per Share, after deduction of the underwriting fees and other related expenses payable by our Company. No account has been taken of the Shares which may fall to be issued upon the exercise of the Over-allotment Option.

(3) Pursuant to the Corporate Reorganization, certain business and assets will be retained by ANTA Fujian, a predecessor entity of our Group, and had been treated as a deemed distribution by our Group upon our Company becoming the holding company of our Group on June 16, 2007. Our unaudited pro forma net tangible assets have been reduced by RMB35.5 million accordingly after taking into account this deemed distribution, which is based on the audited financial information of ANTA Fujian as at December 31, 2006 prepared in accordance with International Financial Reporting Standards.

(4) The unaudited pro forma net tangible assets per Share is arrived at after adjustment for the estimated net proceeds from the Global Offering payable to our Company as described in note (2) and on the basis that a total of 2,400,000,000 Shares were in issue assuming that the Global Offering was completed on December 31, 2006 (including Shares in issue as at the date of this prospectus and those Shares to be issued pursuant to the Global Offering and the Capitalization Issue, but excluding shares that may be issued upon the exercise of the Over-allotment Option).

PROFIT FORECAST

Our Directors believe that, in the absence of unforeseen circumstances and on the basis of the assumptions set out in ‘‘Appendix III — Profit Forecast,’’ our Group’s combined net profit attributable to the equity holders for the year ending December 31, 2007 is unlikely to be less than RMB384.4 million (HK$392.2 million).

— 173 — FINANCIAL INFORMATION

On a pro forma fully diluted basis and on the assumption that our Group had been listed since January 1, 2007 and a total of 2,400,000,000 Shares were issued and outstanding during the entire year (taking no account of any Shares which may be issued upon exercise of the Over-allotment Option), the forecast earnings per Share for the year ending December 31, 2007 is unlikely to be less than RMB0.16 (HK$0.16) representing a price/earnings multiple of 26.8 times and 33.0 times if the Offer Price is HK$4.28 per Share and HK$5.28 per Share, respectively.

The above profit forecast is based on the assumptions set out in ‘‘Appendix III — Profit Forecast’’ to this prospectus.

DISCLOSURE REQUIRED UNDER THE LISTING RULES

Our Directors have confirmed that as at the Latest Practicable Date, there are no circumstances which, had our Group been required to comply with Rules 13.13 to 13.19 in Chapter 13 of the Listing Rules, would have given rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing Rules.

NO MATERIAL ADVERSE CHANGE

Our Directors confirm that, up to the Latest Practicable Date, there has been no material adverse change in the financial or trading position or prospects of our Group since December 31, 2006, and there is no event since December 31, 2006 which would materially affect the information shown in the accountants’ report set out in Appendix I to this prospectus.

— 174 — FUTURE PLANS AND USE OF PROCEEDS

FUTURE PLANS

See the section headed ‘‘Business — Business Strategies’’ for a detailed description of our future plans.

USE OF PROCEEDS

. Approximately HK$1,100 million for organising trade fairs, brand promotion, sponsorship of major sports leagues and events, media advertising (such as television commercials, outdoor displays and magazine advertising), marketing campaigns and activities and endorsements of up- and-coming athletes;

. Approximately HK$440 million for further developing regional sales offices, expanding and improving the coverage of our distribution network and providing renovation subsidies in the form of standardized promotional materials and display equipment to authorized ANTA retail outlets;

. Approximately HK$70 million for investing in advanced testing and scientific equipment, recruiting experts and designers and engaging consultancy firms and universities for enhancing our sports science and raw material research, product testing, innovation and development and design capabilities, and for applying for intellectual property rights and licences for new technological know-how that we developed to protect our intellectual property rights. For details, please refer to the paragraph headed ‘‘Intellectual property rights — Protection of Intellectual Property’’ in the ‘‘Business’’ section of this prospectus;

. Approximately HK$266 million for working capital and other general corporate purposes.

If the Offer Price is set at the high-end or low-end of the proposed offer price range, the net proceeds of the Global Offering (assuming that the Over-allotment Option is not exercised) will increase or decrease by approximately HK$291.0 million, respectively. In such event, we will increase or decrease the allocation of the net proceeds to the above purposes on a pro-rata basis.

— 175 — FUTURE PLANS AND USE OF PROCEEDS

If the Over-allotment Option is exercised in full, the net proceeds from the Global Offering will increase to approximately HK$3,163.6 million, assuming an Offer Price of HK$4.78 per Share, being the mid-point of the proposed Offer Price range. If the Offer Price is set at the high-end or low-end of the proposed Offer Price range, the net proceeds of the Global Offering (including the proceeds from the exercise of the Over-allotment Option) will increase or decrease by approximately HK$334.7 million, respectively. We intend to apply the additional net proceeds to the above uses in the proportions stated above.

None of the net proceeds of the Global Offering will be used to acquire any of our distributors or any part of the ANTA sales network.

To the extent that the net proceeds of the Global Offering are not immediately applied to the above purposes, it is our present intention that such net proceeds will be deposited into interest-bearing bank accounts with licensed banks and/or financial institutions in Hong Kong.

— 176 — UNDERWRITING

HONG KONG UNDERWRITERS

Lead Manager

Morgan Stanley Asia Limited

Co-Lead Managers

BOCI Asia Limited Daiwa Securities SMBC Hong Kong Limited

Co-Managers

China Everbright Securities (HK) Limited Kingsway Financial Services Group Limited

UNDERWRITING ARRANGEMENTS AND EXPENSES

Hong Kong Public Offer

Hong Kong Underwriting Agreement

The Hong Kong Underwriting Agreement was entered into on June 25, 2007. Pursuant to the Hong Kong Underwriting Agreement, our Company is offering the Hong Kong Offer Shares for subscription by the public in Hong Kong at the Offer Price on and subject to the terms and conditions of this prospectus and the Application Forms.

Subject to the Listing Committee of the Stock Exchange granting listing of, and permission to deal in, the Shares in issue and the Shares to be issued as mentioned herein (including any additional Offer Shares which may be made available pursuant to the exercise of the Over-allotment Option) and to certain other conditions set out in the Hong Kong Underwriting Agreement (including the Global Coordinator (on behalf of the Underwriters) and our Company agreeing the Offer Price), the Hong Kong Underwriters have agreed severally to subscribe or procure subscribers for their respective applicable proportions of the Hong Kong Offer Shares now being offered which are not taken up under the Hong Kong Public Offer on the terms and conditions of this prospectus and the Application Forms and the Hong Kong Underwriting Agreement.

The Hong Kong Underwriting Agreement is conditional on and subject to the International Underwriting Agreement having been signed and becoming unconditional.

Grounds for termination

The obligations of the Hong Kong Underwriters to subscribe or procure subscribers for the Hong Kong Offer Shares under the Hong Kong Underwriting Agreement are subject to termination, if, at any time prior to 8: 00 a.m. on the Listing Date:

(a) there shall develop, occur, exist or come into effect:

(i) any new law or regulation or any change or development involving a prospective change in existing laws or regulations or any change or development involving a prospective change in the interpretation or application thereof by any court or other competent authority of the Cayman Islands, Hong Kong, the PRC, the U.S., the European Union, Japan or any other relevant jurisdiction; or

— 177 — UNDERWRITING

(ii) any change or development involving a prospective change, or any event or series of events likely to result in any change or development involving a prospective change in local, national or international financial, political, military, industrial, economic, currency market, fiscal or regulatory or market conditions or any monetary or trading settlement system (including but not limited to conditions in stock and bond markets, money and foreign exchange markets and inter-bank markets) in or affecting the Cayman Islands, Hong Kong, the PRC, the U.S., the European Union, Japan or any other relevant jurisdiction; or

(iii) any suspension or limitation on trading in shares or securities generally on the New York Stock Exchange or the Stock Exchange, or minimum or maximum prices for trading having been fixed, or maximum ranges for prices having been required, by any of the said exchanges or by such system or by order of any regulatory or governmental authority, or a disruption has occurred in securities settlement or clearance services or procedures in the Cayman Islands, Hong Kong, the PRC, the U.S., the European Union, Japan or any other relevant jurisdiction; or

(iv) a change or development occurs involving a change in taxation or exchange control (or the implementation of any exchange control) or currency exchange rates in the Cayman Islands, Hong Kong, the PRC, the U.S., the European Union, Japan or any other relevant jurisdiction; or

(v) any change or development involving a prospective change in the condition, financial or otherwise, or in the earnings, business affairs, business prospects or trading position of our Company or any member of our Group, including any litigation or claim of any third party being threatened or instigated against our Company or any member of our Group; or

(vi) any change or development involving a prospective change, or a materialization of, any of the risks set out in the section headed ‘‘Risk Factors’’ in this prospectus; or

(vii) any general moratorium on commercial banking activities in Hong Kong (imposed by the Financial Secretary and/or the Hong Kong Monetary Authority or other competent authority), New York (imposed at Federal or New York State level or other competent authority), the PRC, the Cayman Islands, the European Union, Japan or any other relevant jurisdiction; or

(viii) any outbreak or escalation of hostilities (whether or not war is or has been declared) or other state of emergency or calamity or wide-spread epidemic or political or social crisis involving the U.S., the PRC, Hong Kong, the Cayman Islands, the European Union, Japan or any escalation thereof, or the declaration by the U.S., the PRC, Hong Kong or the Cayman Islands, of a national emergency or war; or

(ix) any event of force majeure, including without limitation any act of God, war, riot, public disorder, civil commotion, economic sanctions, fire, flood, explosion, epidemic, terrorism (whether or not responsibility has been claimed), labor dispute, strike or lock-out involving the U.S., the PRC, Hong Kong, the Cayman Islands, the European Union or Japan,

— 178 — UNDERWRITING

which, in the sole opinion of the Global Coordinator (for itself and on behalf of the Hong Kong Underwriters):

(A) is or may be or is likely to be materially adverse to the business, financial or other condition or prospects of our Company or our Group or, in the case of sub-paragraph (iv) above, to any present or prospective shareholder of our Company in his/her/its capacity as such; or

(B) has or might have or is likely to have a material adverse effect on the success of the Global Offering or the level of Offer Shares being applied for or accepted or the distribution of Offer Shares; or

(C) makes it inadvisable, inexpedient or impracticable to proceed with the Global Offering or the delivery of the Offer Shares on the terms and in the manner contemplated by this prospectus; or

(b) there comes to the notice of the Global Coordinator any matter or event showing any of the warranties given by our Company and the Covenantors in the Hong Kong Underwriting Agreement to be untrue, inaccurate or misleading in any respect which is or, in the sole opinion of the Global Coordinator, is likely to be material in the context of the Global Offering when given or repeated; or

(c) there comes to the notice of the Global Coordinator any breach on the part of our Company or the Covenantors of any of the provisions of the Hong Kong Underwriting Agreement or the International Underwriting Agreement; or

(d) any matter has arisen or been discovered which would, had it arisen or been discovered immediately before the date of this prospectus, not having been disclosed in this prospectus, constitute a material omission therefrom; or

(e) any statement contained in this prospectus, the Application Forms, the formal notice and any announcements in the agreed form issued by the Company in connection with the Hong Kong Public Offer (including any amendment or supplement thereto) was, has or may become untrue, incorrect or misleading in any material respect; or

(f) there shall have occurred any event, act or omission which gives or is likely to give rise to any liability of a material nature of our Group pursuant to the indemnities referred to in the Hong Kong Underwriting Agreement; or

(g) a valid demand by any creditor for repayment or payment of any indebtedness of our Company or any member of our Group or in respect of which our Company or any member of our Group is liable prior to its stated maturity which demand has or could reasonably be expected to have a material adverse effect on our Group taken as a whole; or

(h) a petition is presented for the winding-up or liquidation of our Company or any member of our Group or our Company or any member of our Group makes any composition or arrangement with its creditors or enters into a scheme of arrangement or any resolution is passed for the winding-up of our Company or any member of our Group or a provisional liquidator, receiver or manager is appointed over all or part of the assets or undertaking of our Company or any member of our Group or anything analogous thereto occurs in respect of our Company or any

— 179 — UNDERWRITING

member of our Group, which in the sole opinion of the Global Coordinator, may or is likely to be material in the context of the Global Offering provided that the Global Coordinator shall, to the extent practicable, seek to consult with our Company on the effect of any such development, then the Global Coordinator may, and upon giving notice in writing to our Company and the Hong Kong Underwriters, terminate the Hong Kong Underwriting Agreement with immediate effect.

Undertakings to the Stock Exchange pursuant to the Listing Rules

By us

Pursuant to Rule 10.08 of the Listing Rules, we have undertaken to the Stock Exchange that no further Shares or securities convertible into our equity securities (whether or not a class already listed) may be issued by us or form the subject of any agreement to such an issue by us within six months from the Listing Date (whether or not such issue of Shares or our securities will be completed within six months from the commencement of dealing), except in certain circumstances prescribed by Rule 10.08 of the Hong Kong Listing Rules.

By the Locked-up Shareholders

Pursuant to Rule 10.07(1) of the Listing Rules, each of the Controlling Shareholders and the investment companies through which they control the exercise of voting rights of the Shares eligible to vote in the general meeting of our Company, namely Talent Trend Investment Limited, Shine Well (Far East) Limited, Fair Billion Development Limited, Spread Wah International Limited, Elegant Dragon Group Limited, Anta International, Anda Holdings and Anda Investments (together the ‘‘Locked-up Shareholders’’), has undertaken to the Stock Exchange that, except pursuant to the Global Offering, it or he or she shall not and shall procure that the relevant registered holder(s) shall not:

(a) in the period commencing on the date by reference to which disclosure of the shareholding of the Controlling Shareholders is made in this prospectus and ending on the date which is six months from the Listing Date (the ‘‘First Six-month Period’’), dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights, interests or encumbrances in respect of, any of those Shares or securities of our Company in respect of which it or he or she is shown by this prospectus to be the beneficial owner; or

(b) in the period of six months commencing on the date on which the First Six-month Period expires (the ‘‘Second Six-month Period’’), dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights, interests or encumbrances in respect of, any of the Shares or securities referred to in (a) above if, immediately following such disposal or upon the exercise or enforcement of such options, rights, interests or encumbrances it or he or she would cease to be our controlling shareholder.

— 180 — UNDERWRITING

Each of the Locked-up Shareholders has also undertaken to the Stock Exchange and us that, within the period commencing on the date by reference to which disclosure of the shareholding of the Controlling Shareholders in our Company is made in this prospectus and ending on the date which is 12 months from the date on which dealings in the Shares commence on the Stock Exchange, it or he or she will:

(a) when it or he or she pledges or charges any Shares or other securities of our Company beneficially owned by it or him or her in favour of an authorized institution (as defined in the Banking Ordinance (Chapter 155 of the Laws of Hong Kong)) for a bona fide commercial loan, immediately inform us of such pledge or charge together with the number of such Shares or other securities so pledged or charged; and

(b) when it or he or she receives any indications, either verbal or written, from any pledgee or chargee of any Shares or other securities of our Company pledged or charged that such Shares or securities will be disposed of, immediately inform us of any such indications.

We will inform the Stock Exchange as soon as we have been informed of the above matters (if any) by any of the Controlling Shareholders and disclose such matters by way of announcement which is published in the newspapers as soon as possible after being so informed by any of the Controlling Shareholders.

Undertakings pursuant to the Hong Kong Underwriting Agreement

By us

We have undertaken to each of the Sponsor, the Global Coordinator, and the Hong Kong Underwriters pursuant to the Hong Kong Underwriting Agreement that, except pursuant to the Global Offering (including pursuant to the Over-allotment Option), we will not without the prior written consent of the Global Coordinator (on behalf of the Hong Kong Underwriters) and unless in compliance with the requirements of the Listing Rules, at any time from the date of the Hong Kong Underwriting Agreement until the expiry of the First Six Month Period offer, accept subscription for, pledge, charge, allot, issue, sell, lend, mortgage, assign, contract to allot, issue or sell, sell any option or contract to purchase, purchase any option or contract to sell, grant or agree to grant any option, right or warrant to purchase or subscribe for, lend or otherwise transfer or dispose of, either directly or indirectly, conditionally or unconditionally, or repurchase any of our share capital or other securities of our Company or any interest therein (including but not limited to any securities convertible into or exercisable or exchangeable for or that represent the right to receive any such share capital or securities or any interest therein), or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such share capital or securities or any interest therein, whether any of the foregoing transactions is to be settled by delivery of share capital or such other securities, in cash or otherwise.

Undertakings by the Covenantors

Each of the Covenantors has undertaken to each of us, the Sponsor, the Global Coordinator and the Hong Kong Underwriters that it will not and will procure that none of its associates or companies controlled by it or any nominee or trustee holding in trust for it or pursuant to any trust of which it is the settlor will, except pursuant to the Stock Borrowing Agreement, without the prior written consent of the Global Coordinator and unless in compliance with the requirements of the Listing Rules (a) during the period commencing on the date of the Hong Kong Underwriting Agreement and ending on the date which is 12 months from the Listing Date, offer, pledge, charge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant or agree to grant any option, right or warrant to purchase or subscribe for, lend or otherwise transfer or dispose of, either directly or indirectly, conditionally or unconditionally, any of the share capital, debt capital or other securities of our Company or any interest

— 181 — UNDERWRITING therein held by it (including, but not limited to any securities that are convertible into or exercisable or exchangeable for, or that represent the right to receive, any such share capital or other securities of our Company or any interest therein) or enter into any swap or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of such share capital or any interest therein, whether any of the foregoing transactions is to be settled by delivery of share capital or such other securities, in cash or otherwise, or offer to or agree to do any of the foregoing or announce any intention to do so; and (b) in the event of a disposal by it of any of our share capital or any interest therein as may be permitted by the Global Coordinator and in compliance with the Listing Rules, it will take all reasonable steps to ensure that such a disposal will not create a disorderly or false market for the Shares or other securities of our Company.

Each of the Covenantors has further undertaken to each of us, the Sponsor, the Global Coordinator and the Hong Kong Underwriters that it will, within the period commencing on the date of this prospectus and ending on the date which is 12 months after the Listing Date, immediately inform us, the Global Coordinator, the Sponsor and the Stock Exchange of:

(i) any pledges or charges of any Shares or other securities of our Company beneficially owned by it and the number of such Shares or other securities so pledged or charged and the purpose for whichsuchpledgeorchargeistobecreated;and

(ii) any indication received by it, either verbal or written, from any pledgee or chargee of any Shares or other securities of our Company pledged or charged that such Shares or other securities of our Company so pledged or charged will be disposed of.

Each of Mr. Wang Wenmo, Mr. Wu Yonghua, Mr. Ke Yufa, Mr. Ding Hemu, Ms. Ding Yali, Anda Investments, Anda Holdings, Shine Well (Far East) Limited, Talent Trend Investment Limited, Fair Billion Development Limited, Spread Wah International Limited and Elegant Dragon Group Limited has also given similar undertakings to each of us, the Global Coordinator, the Sponsor and the Hong Kong Underwriters.

We have agreed to indemnify the Hong Kong Underwriters for certain losses which they may suffer, including losses arising from their performance of their obligations under the Hong Kong Underwriting Agreement and any breach by us of the Hong Kong Underwriting Agreement.

The International Placing

In connection with the International Placing, it is expected that we will enter into the International Underwriting Agreement with the International Underwriters. Under the International Underwriting Agreement subject to the conditions set out therein, the International Underwriters would severally agree to purchase the International Placing Shares or to procure purchasers for the International Placing Shares. It is expected that the International Underwriting Agreement may be terminated on similar grounds as the Hong Kong Underwriting Agreement. Potential investors shall be reminded that in the event that the International Underwriting Agreement is not entered into, the Global Offering will not proceed.

Over-allotment Option

Under the International Underwriting Agreement, our Company is expected to grant to the International Underwriters, exercisable by the Global Coordinator on behalf of the International Underwriters, the Over-allotment Option, exercisable within 30 days from the last day for lodging applications under the Hong Kong Public Offer to require us to allot and issue up to 90,000,000 additional Shares, representing approximately 15% of the initial Offer Shares, at the same price per Offer Share under the International Placing, to, among other things, cover over-allocations in the International Placing, if any.

— 182 — UNDERWRITING

Commission and Expenses

The Hong Kong Public Offer Underwriters will receive an underwriting commission of 3.0% on the Offer Price of the Hong Kong Offer Shares initially offered under the Hong Kong Public Offer, out of which they will pay any sub-underwriting commission. The International Underwriters will receive an underwriting commission of 3.0% on the Offer Price of the International Placing Shares initially offered under the International Placing. In addition, the Company may, in its sole discretion, pay to the Global Coordinator (for its account only) an additional incentive fee of up to 0.50% of the Offer Price multiplied by the total number of Offer Shares and shall inform the Global Coordinator in writing prior to the pricing of the Shares whether it intends to do so. For unsubscribed Hong Kong Offer Shares reallocated to the International Placing, we will pay an underwriting commission at the rate applicable to the International Placing and such commission will be paid to the Global Coordinator and the relevant International Underwriters (but not the Hong Kong Underwriters).

The aggregate commissions and fees, together with listing fees, SFC transaction levy and Stock Exchange trading fee, legal and other professional fees and printing and other expenses relating to the Global Offering are estimated to amount to approximately HK$121.7 million (assuming the Over-allotment Option is not exercised) in total and are payable by us. The Underwriters may reimburse us for a portion of the expenses we incur in connection with the Global Offering.

Hong Kong Underwriters’ Interests in our Company

Save for its obligations under the Hong Kong Underwriting Agreement and as disclosed in this prospectus, none of the Hong Kong Underwriters has any shareholding interests in our Company or any other member of our Group or the right or option (whether legally enforceable or not) to subscribe for or nominate persons to subscribe for securities in our Company or any other member of our Group.

Following completion of the Global Offering, the Hong Kong Underwriters and their affiliated companies may hold a certain portion of the Shares as a result of fulfilling their obligations under the Hong Kong Underwriting Agreement.

BuyersofOfferSharessoldbytheUnderwritersmayberequiredtopaystamptaxesandothercharges in accordance with the laws and practice of the country of purchase in addition to the Offer Price.

— 183 — STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING

THE GLOBAL OFFERING

This prospectus is published in connection with the Hong Kong Public Offer as part of the Global Offering. The Global Offering comprises:

(i) the Hong Kong Public Offer of 60,000,000 Hong Kong Offer Shares (subject to adjustment as mentioned below) in Hong Kong as described below in the paragraph headed ‘‘The Hong Kong Public Offer’’; and

(ii) the International Placing of an aggregate of 540,000,000 International Placing Shares (subject to adjustment and the Over-allotment Option as mentioned below) outside the United States (including to professional and institutional investors within Hong Kong), in offshore transactions in reliance on Regulation S and intheUnitedStatestoQIBsinreliance on Rule 144A or another exemption from the registration requirements under the U.S. Securities Act.

Morgan Stanley is the Global Coordinator, bookrunner, lead manager and sponsor of the Global Offering.

Investors may apply for Hong Kong Offer Shares under the Hong Kong Public Offer or apply for or indicate an interest for Offer Shares under the International Placing, but may not do both.

References in this prospectus to applications, Application Forms, application monies or the procedure for application relate solely to the Hong Kong Public Offer.

THE HONG KONG PUBLIC OFFER

Number of Offer Shares initially offered

We are initially offering 60,000,000 Offer Shares for subscription by the public in Hong Kong at the Offer Price, representing approximately 10.0% of the total number of Offer Shares initially available under the Global Offering. Subject to the reallocation of Offer Shares between the International Placing and the Hong Kong Public Offer, the Hong Kong Offer Shares will represent approximately 2.5% of our Company’s enlarged issued share capital immediately after completion of the Global Offering, assuming that the Over- allotment Option is not exercised.

The Hong Kong Public Offer is open to members of the public in Hong Kong as well as to institutional and professional investors. Professional investors generally include brokers, dealers, companies (including fund managers) whose ordinary business involves dealing in shares and other securities and corporate entities which regularly invest in shares and other securities.

Completion of the Hong Kong Public Offer is subject to the conditions as set out in the paragraph headed ‘‘Conditions of the Hong Kong Public Offer’’ below.

Allocation

Allocation of Shares to investors under the Hong Kong Public Offer will be basedsolelyonthelevel of valid applications received under the Hong Kong Public Offer. The basis of allocation may vary, depending on the number of Hong Kong Offer Shares validly applied for by applicants. Such allocation could, where appropriate, consist of balloting, which would mean that some applicants may receive a higher allocation than others who have applied for the same number of Hong Kong Offer Shares, and those applicants who are not successful in the ballot may not receive any Hong Kong Offer Shares.

— 184 — STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING

The total number of Offer Shares available under the Hong Kong Public Offer (after taking account of any reallocation referred to below) is to be divided equally into two pools for allocation purposes: pool A and pool B. The Hong Kong Offer Shares in pool A will be allocated on an equitable basis to applicants who have applied for Hong Kong Offer Shares with an aggregate price of HK$5 million (excluding the brokerage, SFC transaction levy and the Stock Exchange trading fee payable) or less. The Hong Kong Offer Shares in pool B will be allocated on an equitable basis to applicants who have applied for Hong Kong Offer Shares with an aggregate price of more than HK$5 million (excluding the brokerage, SFC transaction levy and the Stock Exchange trading fee payable) up to the total value of pool B. Investors should be aware that the allocation ratios for applications in pool A and applications in pool B may be different. If the Hong Kong Offer Shares in one (but not both) of the pools are under-subscribed, the unsubscribed Hong Kong Offer Shares will be transferred to the other pool to satisfy demand in that other pool and be allocated accordingly. For the purpose of this paragraph only, the ‘‘price’’ for Hong Kong Offer Shares means the price payable on application therefor (without regard to the Offer Price as finally determined). Applicants can only receive an allocation of Hong Kong Offer Shares from either pool A or pool B but not from both pools. Multiple or suspected multiple applications and any application for more than 30,000,000 Offer Shares, being the number of Hong Kong Offer Shares initially available under each pool, are liable to be rejected.

Reallocation

The allocation of the Offer Shares between (i) the Hong Kong Public Offer and (ii) the International Placing is subject to adjustment. If the number of Offer Shares validly applied for under the Hong Kong Public Offer represents (i) 15 times or more but less than 50 times, (ii) 50 times or more but less than 100 times, and (iii) 100 times or more of the number of Offer Shares initially available under the Hong Kong Public Offer, then Offer Shares will be reallocated to the Hong Kong Public Offer from the International Placing. As a result of such reallocation, the total number of Offer Shares available under the Hong Kong Public Offer will be increased to 180,000,000 Offer Shares (in the case of (i)), 240,000,000 Offer Shares (in the case of (ii)) and 300,000,000 Offer Shares (in the case of (iii)), representing approximately 30%, 40% and 50% of the Offer Shares initially available under the Global Offering, respectively (before any exercise of the Over-allotment Option). In each case, the additional Offer Shares reallocated to the Hong Kong Public Offer will be allocated between pool A and pool B and the number of Offer Shares allocated to the International Placing will be correspondingly reduced in such manner as the Global Coordinator deems appropriate. In addition, the Global Coordinator may allocate Offer Shares from the International Placing to the Hong Kong Public Offer to satisfy valid applications under the Hong Kong Public Offer.

If the Hong Kong Public Offer is not fully subscribed, the Global Coordinator has the authority to reallocate all or any unsubscribed Hong Kong Offer Shares to the International Placing, in such proportions as the Global Coordinator deems appropriate.

Applications

Each applicant under the Hong Kong Public Offer will also be required to give an undertaking and confirmation in the Application Form submitted by him that he and any person(s) for whose benefit he is making the application have not applied for or taken up, or indicated an interest for, and will not apply for or take up, or indicate an interest for, any Offer Shares under the International Placing, and such applicant’s application is liable to be rejected if the said undertaking and/or confirmation is breached and/or untrue (as the case may be) or it has been or will be placed or allocated Offer Shares under the International Placing.

Applicants under the Hong Kong Public Offer are required to pay, on application, the maximum price of HK$5.28 per Offer Share in addition to the brokerage, SFC transaction levy and Stock Exchange trading fee payable on each Offer Share. If the Offer Price, as finally determined in the manner described in the

— 185 — STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING section headed ‘‘Pricing and Allocation’’ below, is less than the maximum price of HK$5.28 per Offer Share, appropriate refund payments (including the brokerage, SFC transaction levy and Stock Exchange trading fee attributable to the surplus application monies) will be made to successful applicants, without interest. Further details are set out below in the section headed ‘‘How to Apply for the Hong Kong Offer Shares’’ in this prospectus.

THE INTERNATIONAL PLACING

Number of Offer Shares offered

The International Placing will consist of an initial offering of 540,000,000 Offer Shares, representing approximately 90% of the total number of Offer Shares initially available under the Global Offering. The International Placing is subject to the Hong Kong Public Offer becoming unconditional. Subject to the reallocation of Offer Shares between the International Placing and the Hong Kong Public Offer, the International Placing Shares will represent approximately 22.5% of our Company’s enlarged issued share capital immediately after completion of the Global Offering, assuming that the Over-allotment Option is not exercised.

Allocation

The International Placing will include selective marketing of Offer Shares to institutional and professional investors and other investors anticipated to have a sizeable demand for such Offer Shares. Professional investors generally include brokers, dealers, companies (including fund managers) whose ordinary business involves dealing in shares and other securities and corporate entities which regularly invest in shares and other securities. Allocation of Offer Shares pursuant to the International Placing will be effected in accordance with the ‘‘book-building’’ process described in the paragraph headed ‘‘Pricing and Allocation’’ below and based on a number of factors, including the level and timing of demand, the total size of the relevant investor’s invested assets or equity assets in the relevant sector and whether or not it is expected that the relevant investor is likely to buy further Shares, and/or hold or sell its Shares, after the listing of the Shares on the Stock Exchange.Suchallocationisintendedtoresultinadistributionofthe Shares on a basis which would lead to the establishment of a solid professional and institutional shareholder base to the benefit of our Company and its shareholders as a whole.

The Global Coordinator (on behalf of the Underwriters) may require any investor who has been offered Offer Shares under the International Placing and who has made an application under the Hong Kong Public Offer, to provide sufficient information to the Global Coordinator so as to allow it to identify the relevant applications under the Hong Kong Public Offer and to ensure that they are excluded from any application of Offer Shares under the Hong Kong Public Offer.

OVER-ALLOTMENT OPTION

In connection with the Global Offering, we are expected to grant the Over-allotment Option to the International Underwriters, exercisable by the Global Coordinator on behalf of the International Underwriters.

Pursuant to the Over-allotment Option, the International Underwriters have the right, exercisable by the Global Coordinator within 30 days from the last day for lodging of applications under the Hong Kong Public Offer, to require us to allot and issue up to 90,000,000 additional Offer Shares, representing approximately 15% of the initial Offer Shares, at the same price per Offer Share under the International Placing, to, among other things, cover over-allocations in the International Placing, if any. If the Over- allotment Option is exercised in full, the additional Offer Shares will represent approximately 3.6% of our

— 186 — STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING enlarged issued share capital immediately following the completion of the Global Offering and the exercise of the Over-allotment Option. In the event that the Over-allotment Option is exercised, a press announcement will be made.

STABILIZATION

In connection with the Global Offering, Morgan Stanley, as stabilizing manager, its affiliates or any person acting for it on behalf of the Underwriters, may over-allocate Shares or effect transactions with a view to stabilizing or supporting the market price of our Shares at a level higher than that which might otherwise prevail for a limited period after the Listing Date. Such stabilization period is expected to expire on July 29, 2007. Please see ‘‘Information about this Prospectus and the Global Offering — Over-allotment and Stabilization’’ for details regarding stabilization, over-allocation and stock borrowing arrangements in connection with the Global Offering.

PRICING AND ALLOCATION

The International Underwriters will be soliciting from prospective investors indications of interest in acquiring Offer Shares in the International Placing. Prospective professional and institutional investors will be required to specify the number of Offer Shares under the International Placing they would be prepared to acquire either at different prices or at a particular price. This process, known as ‘‘book-building’’, is expected to continue up to, and to cease on or around, the last day for lodging applications under the Hong Kong Public Offer.

Pricing for the Offer Shares for the purpose of the various offerings under the Global Offering will be fixed on the Price Determination Date, which is expected to be on or around Saturday, June 30, 2007, and in any event on or before Thursday, July 5, 2007 by agreement between the Global Coordinator (on behalf of the Underwriters) and our Company and the number of Offer Shares to be allocated under various offerings will be determined shortly thereafter.

The Offer Price per Offer Share under the Hong Kong Public Offer will be based on the Hong Kong dollarpriceperOfferShareundertheInternationalPlacing, as determined by the Global Coordinator, on behalf of the Underwriters, and our Company. The Offer Price per Offer Share under the Hong Kong Public Offer will be fixed at the Hong Kong dollar amount which, when increased by the 1% brokerage, 0.004% SFC transaction levy and 0.005% Stock Exchange trading fee payable thereon, is (subject to any necessary rounding) effectively equivalent to the Hong Kong dollar price per Offer Share under the International Placing. The SFC transaction levy and Stock Exchange trading fee otherwise payable by investors in the International Placing on Offer Shares purchased by them will be paid by us.

The Offer Price will not be more than HK$5.28 per Offer Share and is expected to be not less than HK$4.28 per Offer Share unless otherwise announced, as further explained below, not later than the morning of the last day for lodging applications under the Hong Kong Public Offer. Prospective investors should be aware that the Offer Price to be determined on the Price Determination Date may be, but is not expected to be, lower than the indicative offer price range stated in this prospectus.

The Global Coordinator, on behalf of the Underwriters, may, where considered appropriate, based on the level of interest expressed by prospective professional and institutional investors during the book- building process, and with the consent of our Company, reduce the number of Offer Shares offered in the Global Offering and/or the indicative offer price range below that stated in this prospectus at any time on or prior to the morning of the last day for lodging applications under the Hong Kong Public Offer. In such a case, we will, as soon as practicable following the decision to make such reduction, and in any event not later than the morning of the day which is the last day for lodging applications under the Hong Kong Public

— 187 — STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING

Offer, cause there to be published in the South China Morning Post and the Hong Kong Economic Times notices of the reduction. Upon issue of such a notice, the number of Offer Shares offered in the Global Offering and/or the revised offer price range will be final and conclusive and the Offer Price, if agreed upon by the Global Coordinator (on behalf of the Underwriters), and our Company, will be fixed within such revised offer price range. Applicants should have regard to the possibility that any announcement of a reduction in the number of Offer Shares being offered under the Global Offering and/or the indicative offer price range may not be made until the day which is the last day for lodging applications under the Hong Kong Public Offer. Such notice will also include confirmation or revision, as appropriate, of the working capital statement and the profit forecast for the year ending December 31, 2007 and the Global Offering statistics as currently set out in this prospectus and any other financial information which may change as a result of such reduction. Applicants under the Hong Kong Public Offer should note that in no circumstances can applications be withdrawn once submitted, even if the number of Offer Shares being offered under the Global Offering and/or the offer price range is so reduced. In the absence of any such notice so published, the number of Offer Shares will not be reduced and/or the Offer Price, if agreed upon with our Company and the Global Coordinator, will under no circumstances be set outside the offer price range as stated in this prospectus.

In the event of a reduction in the number of Offer Shares being offered under the Global Offering, the Global Coordinator may at its discretion reallocate the number of Offer Shares to be offered under the Hong Kong Public Offer and the International Placing, provided that the number of Offer Shares comprised in the Hong Kong Public Offer shall not be less than 10% of the total number of Offer Shares available under the Global Offering (assuming the Over-allotment Option is not exercised). The Offer Shares to be offered in the International Placing and the Offer Shares to be offered in the Hong Kong Public Offer may, in certain circumstances, be reallocated as between these offerings at the discretion of the Global Coordinator.

The final Offer Price, the indications of interest in the Global Offering, the results of applications and the basis of allotment of Offer Shares available under the Hong Kong Public Offer, are expected to be announced on Monday, July 9, 2007 in the manner set out in the section headed ‘‘How to Apply for the Hong Kong Offer Shares — Publication of Results’’.

The net proceeds from the Global Offering accruing to us (after deduction of underwriting fees and estimated expenses payable by us in relation to the Global Offering, assuming that the Over-allotment Option is not exercised), are estimated to be approximately HK$2,455.3 million, assuming an Offer Price of HK$4.28 per Offer Share, or approximately HK$3,037.3 million, assuming an Offer Price of HK$5.28 per Offer Share (or if the Over-allotment Option is exercised in full, approximately HK$2,828.9 million, assuming an Offer Price of HK$4.28 per Offer Share, or approximately HK$3,498.2 million, assuming an Offer Price of HK$5.28 per Offer Share).

CONDITIONS OF THE HONG KONG PUBLIC OFFER

Acceptance of all applications for Offer Shares pursuant to the Hong Kong Public Offer will be conditional on:

(i) the Listing Committee of the Stock Exchange granting listing of, and permission to deal in, the Shares in issue and the Offer Shares being offered pursuant to the Global Offering (including the additional Offer Shares which may be made available pursuant to the exercise of the Over- allotment Option) (subject only to allotment), Shares to be issued pursuant to the Capitalization Issue and Shares which may fall to be issued on the exercise of options granted under the Pre- IPO Share Option Scheme and options which may be granted the Share Option Scheme; and

— 188 — STRUCTURE AND CONDITIONS OF THE GLOBAL OFFERING

(ii) the execution and delivery of the International Underwriting Agreement on the Price Determination Date; and

(iii) the obligations of the Hong Kong Underwriters under the Hong Kong Underwriting Agreement and the obligations of the International Underwriters under the International Underwriting Agreement becoming and remaining unconditional and not having been terminated in accordance with the terms of the respective agreements, in each case on or before the dates and times specified in the Hong Kong Underwriting Agreement or the International Underwriting Agreement (unless and to the extent such conditions are validly waived on or before such dates and times) and in any event not later than the date which is 30 days after the date of this prospectus.

If, for any reason, the Offer Price is not agreed between our Company and the Global Coordinator (on behalf of the Underwriters) on or before July 5, 2007, the Global Offering will not proceed.

The consummation of each of the Hong Kong Public Offer and the International Placing is conditional upon, among other things, the other offering becoming unconditional and not having been terminated in accordance with their respective terms.

If the above conditions are not fulfilled or waived prior to the times and dates specified, the Global Offering will lapse and the Stock Exchange will be notified immediately. Notice of the lapse of the Hong Kong Public Offer will be published by our Company in the South China Morning Post and the Hong Kong Economic Times on the next day following such lapse. In such eventuality, all application monies will be returned, without interest,onthetermssetoutinthesectionheaded‘‘HowtoApplyfortheHongKong Offer Shares — Dispatch/Collection of share certificates and refund cheques’’. In the meantime, all application monies will be held in (a) separate bank account(s) with the receiving bankers or other bank(s) in Hong Kong licensed under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong) (as amended).

Share certificates for the Offer Shares will only become valid certificates of title at 8: 00 a.m. on the Listing Date provided that (i) the Global Offering has become unconditional in all respects and (ii) the right of termination as described in the section headed ‘‘Underwriting — Grounds for termination’’ has not been exercised.

— 189 — CORPORATE INVESTOR

THE CORPORATE PLACING

Pursuant to a corporate placing agreement entered into by Grahamstowe Investments Limited (the ‘‘Corporate Investor’’), Mr. Leslie Lee Alexander (as guarantor), the Company and the Global Coordinator on June 15, 2007, the Corporate Investor has agreed to subscribe for such number of Shares as is equal to HK$234,510,000 divided by the Offer Price (rounded down to the nearest board lot of 1,000 Shares) in the International Placing. Assuming an Offer Price of HK$4.78 (being the mid-point of the Offer Price range), the total number of Shares subscribed by the Corporate Investor would be approximately 49,060,000 Shares, representing approximately 8.2% of the Offer Shares and approximately 2.0% of the issued Shares of our Company upon completion of the Global Offering and the Capitalization Issue (assuming the Over- allotment Option is not exercised).

The Corporate Investor is an investment vehicle wholly owned by Luff Deer Group Limited, which is in turn wholly owned by Mr. Leslie Lee Alexander. Mr. Leslie Lee Alexander is the owner of the Houston Rockets, one of the basketball teams participating in the National Basketball Association in the United States.

The corporate placing forms part of the International Placing. The Offer Shares to be subscribed by the Corporate Investor will not be affected by any reallocation of the Offer Shares between the International Placing and the Hong Kong Public Offer in the event of over-subscription under the Hong Kong Public Offer as described in the section headed ‘‘Structure and Conditions of the Global Offering — The Hong Kong Public Offer’’ in this prospectus nor by any exercise of the Over-allotment Option.

The Corporate Investor and its beneficial owners are Independent Third Parties not connected with the Company. The Shares to be held by the Corporate Investor pursuant to the corporate placing agreement will be regarded as part of the public float of the Company for the purposes of Rule 8.08 of the Listing Rules.

Conditions Precedent

The subscription obligation of the Corporate Investor is conditional upon (i) the Underwriting Agreements being entered into and having become unconditional by the Listing Date and not being terminated in accordance with their terms no later than the date and time specified in those agreements and (ii) the Listing Committee of the Stock Exchange having granted the listing of, and permission to deal in, the Shares in issue and to be issued pursuant to the Global Offering, the Capitalization Issue and the Pre-IPO Share Option Scheme and the Share Option Scheme.

Disposal Restriction

Each of the Corporate Investor and Mr. Leslie Lee Alexander has agreed that, without the prior written consent of our Company and the Global Coordinator, it or he will not, whether directly or indirectly, at any time during the period of 12 months following the Listing Date, dispose of any Shares subscribed pursuant to the International Placing (or any interest in any company or entity holding any of the Shares), other than transfers of all or part of such Shares to its wholly-owned subsidiaries, and such transfer can only be made when the transferee agrees to be subject to the restrictions on disposals imposed on the Corporate Investor.

The Corporate Investor has also agreed that it will not knowingly dispose of any of the Shares subscribed by it to create a disorderly or false market.

— 190 — HOW TO APPLY FOR THE HONG KONG OFFER SHARES

1. METHODS OF APPLYING FOR THE HONG KONG OFFER SHARES

There are two ways to make an application for the Hong Kong Offer Shares. You may apply for the Hong Kong Offer Shares by either using a WHITE or YELLOW Application Form or by giving electronic application instructions to HKSCC to cause HKSCC Nominees to apply for the Hong Kong Offer Shares on your behalf. Except where you are a nominee and provide the required information in your application, you or you and your joint applicant(s) may not make more than one application (whether individually or jointly) by applying using a WHITE or YELLOW Application Form or by giving electronic application instructions to HKSCC.

2. APPLYING BY USING A WHITE OR YELLOW APPLICATION FORM

Which Application Form to use

Use a WHITE Application Form if you want the Hong Kong Offer Shares to be issued in your own name.

Use a YELLOW Application Form if you want the Hong Kong Offer Shares to be issued in the name of HKSCC Nominees and deposited directly into CCASS for credit to your CCASS Investor Participant stock account or your designated CCASS Participant’s stock account.

Note: The Offer Shares are not available to existing beneficial owners of Shares in our Company, the Directors or chief executive of our Company or any of our subsidiaries, or associates of any of them (as ‘‘associate’’ is defined in the Listing Rules) or to a connected person (as defined in the Listing Rules) of our Company or a person who is not outside the United States and will not be acquiring the Hong Kong Offer Shares in an offshore transaction (as defined in Regulation S) or persons who do not have a Hong Kong address.

Where to collect the Application Forms

You can collect a WHITE Application Form and a prospectus from:

Any of the following addresses of the Hong Kong Underwriters:

Morgan Stanley Asia Limited 30th Floor Three Exchange Square Central Hong Kong

BOCI Asia Limited 26th Floor Bank of China Tower 1GardenRoad Hong Kong

Daiwa Securities SMBC Hong Kong Level 26 Limited One Pacific Place 88 Queensway Hong Kong

China Everbright Securities (HK) Limited 36th Floor Far East Finance Centre 16 Harcourt Road Hong Kong

— 191 — HOW TO APPLY FOR THE HONG KONG OFFER SHARES

Kingsway Financial Services Group Limited 5th Floor Hutchison House 10 Harcourt Road Central Hong Kong

or any one of the following branches of Bank of China (Hong Kong) Limited:

Branch Name Address

Hong Kong Island Bank of China Tower Branch 3/F, 1 Garden Road Connaught Road Central Branch 13–14 Connaught Road Central 409 Hennessy Road Branch 409–415 Hennessy Road, Wan Chai Shek Tong Tsui Branch 534 Queen’s Road West, Shek Tong Tsui Causeway Bay Branch 18 Percival Street, Causeway Bay

Kowloon Diamond Hill Branch G107, Plaza Hollywood, Diamond Hill Kwun Tong Branch 20–24 Yue Man Square, Kwun Tong Mong Kok Branch 589 Nathan Road, Mong Kok Yau Ma Tei Branch 471 Nathan Road, Yau Ma Tei TsimShaTsuiEastBranch ShopG02–03, Inter-Continental Plaza, 94 Granville Road, Tsim Sha Tsui Kowloon Plaza Branch Unit 1, Kowloon Plaza, 485 Castle Peak Road

New Territories Tai Po Branch 68–70 Po Heung Street, Tai Po Market Ma On Shan Plaza Branch Shop 2103, Level 2, Ma On Shan Plaza, Sai Sha Road, Ma On Shan Tuen Mun San Hui Branch G13–G14 Eldo Court, Heung Sze Wui Road, Tuen Mun Sheung Shui Branch 61 San Fung Avenue, Sheung Shui or any one of the following branches of Industrial and Commercial Bank of China (Asia) Limited:

Branch Name Address

Hong Kong Island Queen’s Road Central Branch 122–126 Queen’s Road Central, Central Wan Chai Road Branch G/F, 103–103A Wan Chai Road, Wanchai North Point Branch G/F, 436–438 King’s Road, North Point

Kowloon Yaumatei Branch 542 Nathan Road, Yaumatei Prince Edward Branch 777 Nathan Road, Mongkok

New Territories Kwai Fong Branch C63A–C66, 2/F, Kwai Chung Plaza, Kwai Fong

— 192 — HOW TO APPLY FOR THE HONG KONG OFFER SHARES

You can collect a YELLOW Application Form and a prospectus during normal business hours from 9: 00 a.m. on Tuesday, June 26, 2007 until 12: 00 noon on Friday, June 29, 2007 from:

(1) The Depository Counter of HKSCC at 2nd Floor, Vicwood Plaza, 199 Des Voeux Road Central, Hong Kong; or

(2) Your stockbroker, who may have such Application Forms and this prospectus available.

How to complete the Application Forms

There are detailed instructions on each Application Form. You should read these instructions carefully. If you do not follow the instructions your application may be rejected and returned by ordinary post together with the accompanying cheque(s) or banker’s cashier order(s) to you (or the first-named applicant in the case of joint applicants) at your own risk at the address stated in the Application Form.

You should note that by completing and submitting the Application Form, among other things:

(i) you agree with our Company and each shareholder of our Company, and our Company agrees with each of our shareholders, to observe and comply with the Companies Law, the Companies Ordinance, the Memorandum of Association and the Articles;

(ii) you confirm that you have received a copy of this prospectus and have only relied on the information and representations contained in this prospectus in making your application and will not rely on any other information and representations save as set out in any supplement to this prospectus;

(iii) you agree that our Company, our Directors and any person who has authorized this prospectus are liable only for the information and representations contained in this prospectus and any supplement thereto;

(iv) you undertake and confirm that you (if the application is made for your benefit) or the person(s) for whose benefit you have made the application have not applied for or taken up, or indicated an interest for, and will not applyforortakeup,orindicate an interest for, and have not received or been placed or allocated (including conditionally or provisionally) any Offer Shares under the International Placing nor otherwise participated in the International Placing;

(v) you agree to disclose to our Company, the Sponsor, the Global Coordinator, the Underwriters, the registrar, receiving bankers and/or their respective advisors and agents personal data and any information which they require about you or the person(s) for whose benefit you have made the application;

(vi) instruct and authorize our Company and/or the Global Coordinator (or their respective agents or nominees), as an agent of our Company, to do on your behalf all things necessary to register any Hong Kong Offer Shares allotted to you in your name(s) (for applicants on a WHITE Application Form) or in the name of HKSCC Nominees (for applicants on a YELLOW Application Form), as required by the Articles of Association, and otherwise to give effect to the arrangements described in this prospectus and the Application Forms;

— 193 — HOW TO APPLY FOR THE HONG KONG OFFER SHARES

(vii) undertake to sign all documents and to do all things necessary to enable you (for applicants on a WHITE Application Form) or the name of HKSCC Nominees (for applicants on a YELLOW Application Form) to be registered as the holder of the Hong Kong Offer Shares allotted to you, as required by the Articles and otherwise to give effect to the arrangements described in this prospectus and the Application Form;

(viii) warrant the truth and accuracy of the information contained in your application;

(ix) if the laws of any place outside Hong Kong are applicable to your application, agree and warrant that you have complied with all such laws and none of our Company, the Global Coordinator and the Underwriters nor any of their respective officers or advisers will infringe any law outside Hong Kong as a result of the acceptance of your offer to purchase, or any action arising from your rights and obligations under the terms and conditions contained in the prospectus;

(x) agree (without prejudice to any other rights which you may have) that once your application has been accepted, you cannot rescind it because of an innocent misrepresentation;

(xi) agree that your application, any acceptance of it and the resulting contract will be governed by and construed in accordance with the laws of Hong Kong;

(xii) represent, warrant and undertake that you understand that the Hong Kong Offer Shares have not been and will not be registered under the U.S. Securities Act and you and any person for whose account or benefit you are acquiring the Hong Kong Offer Shares are outside the United States (within the meaning of Regulation S under the U.S. Securities Act) when completing the Application Form;

(xiii) undertake and agree to accept the Hong Kong Offer Shares applied for, or any lesser number allotted to you under the application; and

(xiv) agree that the processing of your application, including the dispatch of refund cheque(s) (if any), may be done by any of the Company’s receiving bankers and is not restricted to the bank at which your application was lodged.

In order for the YELLOW Application Forms to be valid:

(i) If the application is made through a designated CCASS Participant (other than a CCASS Investor Participant):

(a) the designated CCASS Participant or its authorized signatories must sign in the appropriate box in the Application Form; and

(b) the designated CCASS Participant must endorse the form with its company chop (bearing its company name) and insert its participant I.D. in the appropriate box in the Application Form.

(ii) If the application is made by an individual CCASS Investor Participant:

(a) the Application Form must contain the CCASS Investor Participant’s name and Hong Kong Identity Card Number; and

— 194 — HOW TO APPLY FOR THE HONG KONG OFFER SHARES

(b) the CCASS Investor Participant must insert its participant I.D. and sign in the appropriate box in the Application Form.

(iii) If the application is made by a joint individual CCASS Investor Participant:

(a) the Application Form must contain the names and the Hong Kong Identity Card Number of all joint CCASS Investor Participants; and

(b) the participant I.D. must be inserted and the authorized signatory(ies) of the CCASS Investor Participant’s stock account must sign in the appropriate box on the Application Form.

(iv) If the application is made by a corporate CCASS Investor Participant:

(a) the Application Form must contain the CCASS Investor Participant’s company name and Hong Kong Business Registration number; and

(b) the participant I.D. and company chop (bearing its company name) endorsed by its authorized signatory(ies) must be inserted in the appropriate box in the Application Form.

Written signature(s), number of signatories and form of company chop, where appropriate, should match the records kept by HKSCC. Incorrect or incomplete details of the CCASS Participant or the omission or inadequacy of authorized signatory(ies) (if applicable), participant I.D. or other similar matters may render the application invalid.

If your application is made through a duly authorized attorney, our Company, the Global Coordinator, the Underwriters and their respective agents or nominees, each severally as our agent(s), may accept it at their discretion, and subject to any conditions they think fit, including production of evidence of the authority of your attorney. We and the Global Coordinator, in the capacity as our agent, or its agents or nominees, will have full discretion to reject or accept any application, in full or in part, without assigning any reason.

How Many Applications May You Make

You may make more than one application for the Hong Kong Offer Shares if and only if:

You are a nominee, in which case you may give electronic application instructions to HKSCC via CCASS (if you are a CCASS Participant) and lodge more than one WHITE or YELLOW Application Form in your own name if each application is made on behalf of different owners. In the box on the Application Form marked ‘‘For nominees’’ you must include:

. an account number; or

. some other identification code for each beneficial owner (or, in the case of joint beneficial owners, for each such beneficial owner). If you do not include this information, the application will be treated as being made for your benefit.

— 195 — HOW TO APPLY FOR THE HONG KONG OFFER SHARES

Otherwise, multiple applications are not allowed.

It will be a term and condition of all applications that by completing and delivering an Application Form, you:

. (if the application is made for your own benefit) warrant that the application is the only application which has been or will be made for your benefit on a WHITE or YELLOW Application Form or by giving electronic application instructions to HKSCC;

. (if you are an agent for another person) warrant that reasonable enquiries have been made of that other person that the application is the only application which has been or will be made for the benefit of that other person on a WHITE or YELLOW Application Form or by giving electronic application instructions to HKSCC, and that you are duly authorized to sign the Application Form as that other person’s agent.

Except where you are a nominee and provide the information required to be provided in your application, all of your applications will be rejected as multiple applications if you, or you and your joint applicant(s) together or any of your joint applicants:

. make more than one application (whether individually or jointly with others) on a WHITE or YELLOW Application Form or by giving electronic application instructions to HKSCC;

. apply (whether individually or jointly with others) on one WHITE Application Form and one YELLOW Application Form or on one WHITE or YELLOW Application Form and give electronic application instructions to HKSCC;

. apply (whether individually or jointly with others) on one WHITE or YELLOW Application Form or by giving electronic application instructions to HKSCC for more than 30,000,000 Shares, being 50% of the Shares initially being offered for public subscription under the Hong Kong Public Offer, as more particularly described in the section entitled ‘‘Structure and Conditions of the Global Offering — The Hong Kong Public Offer’’; or

. have applied for or taken up, or indicated an interest for, or have been or will be placed or allocated (including conditionally and/or provisionally) Offer Shares under the International Placing.

All of your applications will also be rejected as multiple applications if more than one application on a WHITE or a YELLOW Application Form or by giving electronic application instructions to HKSCC is made for your benefit (including the part of the application made by HKSCC Nominees acting on electronic application instructions). If an application is made by an unlisted company and:

. the principal business of that company is dealing in securities; and

. you exercise statutory control over that company then the application will be treated as being made for your benefit.

Unlisted company means a company with no equity securities listed on the Stock Exchange.

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Statutory control inrelationtoacompanymeansyou:

. control the composition of the board of directors of the company; or

. control more than half of the voting power of the company; or

. hold more than half of the issued share capital of the company (not counting any part of it which carries no right to participate beyond a specified amount in a distribution of either profits or capital).

Members of the Public — Time for Applying for Hong Kong Offer Shares

Completed WHITE or YELLOW Application Forms, together with payment attached, must be lodged by 12: 00 noon on Friday, June 29, 2007, or, if the application lists are not open on that day, then by the time and date stated in the sub-paragraph headed ‘‘Effect of bad weather on the opening of the application lists’’ below.

Your completed Application Form, together with payment attached, should be deposited in the special collection boxes provided at any of the branches of Bank of China (Hong Kong) Limited or Industrial and Commercial Bank of China (Asia) Limited (see the paragraph headed ‘‘— Where to collect the Application Forms’’ above) at the following times:

Tuesday, June 26, 2007 — 9: 00 a.m. to 5: 00 p.m. Wednesday, June 27, 2007 — 9: 00 a.m. to 5: 00 p.m. Thursday, June 28, 2007 — 9: 00 a.m. to 5: 00 p.m. Friday, June 29, 2007 — 9: 00 a.m. to 12: 00 noon

The application lists will be open from 11: 45 a.m. to 12: 00 noon on Friday, June 29, 2007.

No proceedings will be taken on applications for the Shares and no allotment of any such Shares will be made until the closing of the application lists. No allotment of any of the Shares will be made later than Thursday, July 26, 2007.

Effect of Bad Weather on the Opening of the Application Lists

The application lists will not open if there is:

. a tropical cyclone warning signal number 8 or above, or

. a ‘‘black’’ rainstorm warning signal in force in Hong Kong at any time between 9: 00 a.m. and 12: 00 noon on Friday, June 29, 2007. Instead they will open between 11: 45 a.m. and 12: 00 noon on the next Business Day which does not have either of those warnings in force in Hong Kong at any time between 9: 00 a.m. and 12: 00 noon.

Business Day means a day that is not a Saturday, Sunday or a public holiday in Hong Kong.

Publication of Results

Our Company expects to release and announce the Offer Price, level of indication of interest in the International Placing, level of applications in the Hong Kong Public Offer and basis of allotment under the Hong Kong Public Offer on Monday, July 9, 2007 in the South China Morning Post (in

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English), the Hong Kong Economic Times (in Chinese) and on our website at www.anta.com and the website of the Stock Exchange at www.hkex.com.hk. The results of allocations and the Hong Kong identity card/passport/Hong Kong business registration numbers of successful applicants under the Hong Kong Public Offer will be made available at the times and date and in the manner specified below:

. on our website at www.anta.com, the website of the Stock Exchange at www.hkex.com.hk or our Hong Kong Public Offer results of allocations website at www.iporesults.com.hk on a 24-hour basis from 8: 00 a.m. on Monday, July 9, 2007 to 12: 00 midnight on Sunday, July 15, 2007. The user of our Hong Kong Public Offer results of allocations website at www.iporesults.com.hk will be required to key in the Hong Kong identity card/passport/ Hong Kong business registration number provided in his/her/its Application Form to search for his/her/its own allocation result;

. from our Hong Kong Public Offer allocation results telephone enquiry line. Applicants may find out whether or not their application has been successful and the number of Hong Kong Offer Shares allocated to them, if any, by calling 2862 8669 between 9: 00 a.m. and 10: 00 p.m. from Monday, July 9, 2007 to Thursday, July 12, 2007;

. special allocation results booklets setting out the results of allocations will be available for inspection during opening hours of individual branches and sub-branches from Monday, July 9, 2007 to Wednesday, July 11, 2007 at all the receiving bank branches and sub- branches at the addresses set out in the section headed ‘‘How to Apply for the Hong Kong Offer Shares — Where to Collect the Application Forms’’.

Dispatch/Collection of share certificates and refund cheques

If an application is rejected, not accepted or accepted in part only, or if the Offer Price as finally determined is less than the maximum offer price of HK$5.28 per Offer Share (excluding brokerage, SFC transaction levy and Stock Exchange trading fee thereon) initially paid on application, or if the conditions of the Hong Kong Public Offer are not fulfilled in accordance with the section headed ‘‘Structure and Conditions of the Global Offering — Conditions of the Hong Kong Public Offer’’ or if any application is revoked or any allotment pursuant thereto has become void, the application monies, or the appropriate portion thereof, together with the related brokerage, SFC transaction levy and Stock Exchange trading fee, will be refunded, without interest. It is intended that special efforts will be made to avoid any undue delay in refunding application monies where appropriate.

No temporary document of title will be issued in respect of the Shares. No receipt will be issued for sums paid on application but, subject to personal collection as mentioned below, in due course there will be sent to you (or, in the case of joint applicants, to the first-named applicant) by ordinary post, at your own risk, to the address specified on the Application Form:

(a) for applications on WHITE Application Forms: (i) share certificate(s) for all the Hong Kong Offer Shares applied for, if the application is wholly successful; or (ii) share certificate(s) for the number of Hong Kong Offer Shares successfully applied for, if the application is partially successful. For wholly successful and partially successful applications on YELLOW Application Forms: share certificates for the Shares successfully applied for will be deposited into CCASS as described below; and/or

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(b) for applications on WHITE or YELLOW Application Forms, refund cheque(s) crossed ‘‘Account Payee Only’’ in favor of the applicant (or, in the case of joint applicants, the first-named applicant) for (i) the surplus application monies for the Hong Kong Offer Shares unsuccessfully applied for, if the application is partially unsuccessful; or (ii) all the application monies, if the application is wholly unsuccessful; and/or (iii) the difference between the Offer Price and the maximum offer price per Share paid on application in the event that the Offer Price is less than the offer price per Share initially paid on application, in each case including brokerage of 1%, SFC transaction levy of 0.004% and Stock Exchange trading fee of 0.005%, attributable to such refund/surplus monies but without interest.

Part of your Hong Kong identity card number/passport number, or, if you are joint applicants, part of the Hong Kong identity card number/passport number of the first-named applicant, provided by you may be printed on your refund cheque, if any. Such data could also be transferred to a third party for refund purpose. Your banker may require verification of your Hong Kong identity card number/ passport number before encashment of your refund cheque. Inaccurate completion of your Hong Kong identity card number/passport number may lead to delay in encashment of, or may invalidate, your refund cheque.

Subject to personal collection as mentioned below, refund cheques for surplus application monies (if any) in respect of wholly and partially unsuccessful applications and the difference between the Offer Price and the offer price per Share initially paid on application (if any) under WHITE or YELLOW Application Forms; and share certificates for wholly and partially successful applicants under WHITE Application Forms are expected to be posted on or around Monday, July 9, 2007. The right is reserved to retain any share certificate(s) and any surplus application monies pending clearance of cheque(s).

Share certificates will only become valid certificates of title at 8: 00 a.m. on the Listing Date provided that the Hong Kong Public Offer has become unconditional in all respects and the right of termination described in the section entitled ‘‘Underwriting — Grounds for Termination’’ has not been exercised.

(a) If you apply using a WHITE Application Form:

If you apply for 1,000,000 Hong Kong Offer Shares or more on a WHITE Application Form and have indicated your intention in your Application Form to collect your refund cheque(s) (where applicable) and/or share certificate(s) (where applicable) from Computershare Hong Kong Investor Services Limited and have provided all information required by your Application Form, you may collect your refund cheque(s) (where applicable) and share certificate(s) (where applicable) from Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong from 9: 00 a.m. to 1: 00 p.m. on Monday, July 9, 2007 or such other date as notified by us in the newspapers as the date of collection/dispatch of refund cheques/share certificates. If you are an individual who opts for personal collection, you must not authorize any other person to make collection on your behalf. If you are a corporate applicant who opts for personal collection, you must attend by your authorized representative bearing a letter of authorization from your corporation stamped with your corporation’s chop. Both individuals and authorized representatives (if applicable) must produce, at the time of collection, evidence of identity acceptable to Computershare Hong Kong Investor Services Limited. If you do not collect your refund cheque(s) (where applicable) and/or share certificate(s) (where applicable) personally within the time specified for collection, they will be sent to the address as specified in your Application Form promptly thereafter by ordinary post and at your own risk.

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If you apply for less than 1,000,000 Hong Kong Offer Shares or if you apply for 1,000,000 Hong Kong Offer Shares or more but have not indicated on your Application Form that you will collect your refund cheque(s) (where applicable) and/or share certificate(s) (where applicable) in person, your refund cheque(s) (where applicable) and/or share certificate(s) (where applicable) will be sent to the address on your Application Form on Monday, July 9, 2007, by ordinary post and at your own risk.

(b) If you apply using a YELLOW Application Form:

If you apply for 1,000,000 Hong Kong Offer Shares or more and you have elected on your YELLOW Application Form to collect your refund cheque (where applicable) in person, please follow the same instructions as those for WHITE Application Form applicants as described above.

IfyouapplyforHongKongOfferSharesusingaYELLOW Application Form and your application is wholly or partially successful, your share certificate(s) will be issued in the name of HKSCC Nominees and deposited into CCASS for credit to your CCASS Investor Participant stock account or the stock account of your designated CCASS Participant as instructed by you in your Application Form at the close of business on Monday, July 9, 2007, or under contingent situation, on any other date as shall be determined by HKSCC or HKSCC Nominees.

If you are applying through a designated CCASS Participant (other than a CCASS Investor Participant):

. for Hong Kong Offer Shares credited to the stock account of your designated CCASS Participant (other than a CCASS Investor Participant), you can check the number of Hong Kong Offer Shares allotted to you with that CCASS Participant.

If you are applying as a CCASS Investor Participant:

. we expect to publish the results of CCASS Investor Participants’ applications together with the results of the Hong Kong Public Offer in the manner described in ‘‘How to Apply for the Hong Kong Offer Shares — Publication of Results’’ on Monday, July 9, 2007. You should check the announcement made by our Company and report any discrepancies to HKSCC before 5: 00 p.m. on Monday, July 9, 2007 or such other date as shall be determined by HKSCC or HKSCC Nominees. Immediately after the credit of the Hong Kong Offer Shares to your CCASS Investor Participant stock account, you can check your new account balance via the CCASS Phone System and the CCASS Internet System (under the procedures contained in HKSCC’s ‘‘An Operating Guide for Investor Participants’’ in effect from time to time). HKSCC will also make available to you an activity statement showing the number of Hong Kong Offer Shares credited to your stock account.

3. APPLYING BY GIVING ELECTRONIC APPLICATION INSTRUCTIONS TO HKSCC

General

CCASS Participants may give electronic application instructions to HKSCC to apply for the Hong Kong Offer Shares and to arrange payment of the monies due on application and payment of refunds. This will be in accordance with their participant agreements with HKSCC and the General Rules of CCASS and the CCASS Operational Procedures.

— 200 — HOW TO APPLY FOR THE HONG KONG OFFER SHARES

If you are a CCASS Investor Participant, you may give electronic application instructions through the CCASS Phone System by calling 2979 7888 or through the CCASS Internet System (https://ip.ccass.com) (using the procedures contained in HKSCC’s ‘‘An Operating Guide for Investor Participants’’ in effect from time to time).

HKSCCcanalsoinputelectronic application instructions foryouifyougoto:

Hong Kong Securities Clearing Company Limited Customer Service Center 2/F, Vicwood Plaza 199DesVoeuxRoadCentral Hong Kong and complete an input request form.

Prospectuses are available for collection from the above address.

If you are not a CCASS Investor Participant, you may instruct your broker or custodian who is a CCASS Broker Participant or a CCASS Custodian Participant to give electronic application instructions via CCASS terminals to apply for the Hong Kong Offer Shares on your behalf.

You are deemed to have authorized HKSCC and/or HKSCC Nominees to transfer the details of your application, whether submitted by you or through your broker or custodian, to our Company and our branch share registrar.

Where a WHITE Application Form is signed by HKSCC Nominees on behalf of persons who have given electronic application instructions to apply for the Hong Kong Offer Shares:

(i) HKSCC Nominees is only acting as a nominee for those persons and shall not be liable for any breach of the terms and conditions of the WHITE Application Form or this prospectus;

(ii) HKSCC Nominees does the following things on behalf of each such person:

. agrees that the Hong Kong Offer Shares to be allotted shall be issued in the name of HKSCC Nominees and deposited directly into CCASS for the credit of the stock account of the CCASS Participant who has inputted electronic application instructions on that person’s behalf or that person’s CCASS Investor Participant stock account;

. undertakes and agrees to accept the Hong Kong Offer Shares in respect of which that person has given electronic application instructions or any lesser number;

. undertakes and confirms that that person has not applied for or taken up, or indicated an interest for, and will not apply for or take up, or indicate an interest for, and has not received or been placed or allocated (including conditionally or provisionally) any Offer Shares under the International Placing nor otherwise participated in the International Placing;

— 201 — HOW TO APPLY FOR THE HONG KONG OFFER SHARES

. (if the electronic application instructions are given for that person’s own benefit) declares that only one set of electronic application instructions has been given for that person’s benefit;

. (if that person is an agent for another person) declares that that person has only given one set of electronic application instructions for the benefit of that other person and that that person is duly authorized to give those instructions as that other person’s agent;

. understands that the above declaration will be relied upon by our Company, our Directors and the Global Coordinator in deciding whether or not to make any allotment of Hong Kong Offer Shares in respect of the electronic application instructions givenbythatpersonandthatthatpersonmaybeprosecutedifhemakes a false declaration;

. authorizes our Company to place the name of HKSCC Nominees on the register of members of our Company as the holder of the Hong Kong Offer Shares allotted in respect of that person’s electronic application instructions andtosendshare certificate(s) and/or refund monies in accordance with the arrangements separately agreed between our Company and HKSCC;

. confirms that that person has read the terms and conditions and application procedures set out in this prospectus and agrees to be bound by them;

. confirms that that person has received a copy of the prospectus and has only relied on the information and representations in this prospectus in giving that person’s electronic application instructions or instructing that person’s broker or custodian to give electronic application instructions on that person’s behalf;

. agrees that our Company, our Directors and any person who has authorized this prospectus are liable only for the information and representations contained in this prospectus and any supplement thereto;

. agrees to disclose that person’s personal data to our Company, the Sponsor, the Global Coordinator, the Underwriters, the registrar, receiving bankers and/or their respective advisers and agents and any information which they may require about that person;

. agrees (without prejudice to any other rights which that person may have) that once the application of HKSCC Nominees has been accepted, the application cannot be rescinded for innocent misrepresentation;

. agrees that any application made by HKSCC Nominees on behalf of that person pursuant to electronic application instructions given by that person is irrevocable before Thursday, July 26, 2007, such agreement to take effect as a collateral contract with our Company and to become binding when that person gives the instructions and such collateral contract to be in consideration of our Company agreeing that it will not offer any Hong Kong Offer Shares to any person before Thursday, July 26, 2007, except by means of one of the procedures referred to in this prospectus. However, HKSCC Nominees may revoke the application before the fifth day after the time of the opening of the application lists (excluding for this purpose any day which is a

— 202 — HOW TO APPLY FOR THE HONG KONG OFFER SHARES

Saturday, Sunday or public holiday in Hong Kong) if a person responsible for this prospectus under Section 40 of the Companies Ordinance (as applied by Section 342E of the Companies Ordinance) gives a public notice under that section which excludes or limits the responsibility of that person for this prospectus;

. agrees that once the application of HKSCC Nominees Limited is accepted, neither that application nor that person’s electronic application instructions can be revoked, and that acceptance of that application will be evidenced by the results of the Hong Kong Public Offer made available by our Company;

. agrees to the arrangements, undertakings and warranties specified in the participant agreement between that person and HKSCC, read with the General Rules of CCASS and the CCASS Operational Procedures, in respect of the giving of electronic application instructions relatingtoHongKongOfferShares;

. agrees with our Company, for ourseleves and for the benefit of each of our shareholders (and so that we will be deemed by its acceptance in whole or in part of the application by HKSCC Nominees to have agreed, for ourselves and on behalf of each of our shareholders, with each CCASS Participant giving electronic application instructions) to observe and comply with the Companies Law, the Companies Ordinance, the Memorandum of Association and the Articles; and

. agrees that that person’s application, any acceptance of it and the resulting contract will be governed by and construed in accordance with the laws of Hong Kong.

Effect of Giving electronic application instructions to HKSCC

By giving electronic application instructions to HKSCC or instructing your broker or custodian who is a CCASS Broker Participant or a CCASS Custodian Participant to give such instructions to HKSCC, you (and if you are joint applicants, each of you jointly and severally) are deemed to have done the following things. Neither HKSCC nor HKSCC Nominees shall be liable to our Company or any other person in respect of the things mentioned below:

. instructed and authorized HKSCC to cause HKSCC Nominees (acting as nominee for the relevant CCASS Participants) to apply for the Hong Kong Offer Shares on your behalf;

. instructed and authorized HKSCC to arrange payment of the maximum offer price, brokerage, SFC transaction levy and Stock Exchange trading fee by debiting your designated bank account and, in the case of a wholly or partially unsuccessful application and/or the Offer Price is less than the offer price per Offer Share initially paid on application, refund of the application monies, in each case including brokerage, SFC transaction levy and Stock Exchange trading fee, by crediting your designated bank account;

. instructed and authorized HKSCC to cause HKSCC Nominees to do on your behalf all the thingswhichitisstatedtodoonyourbehalfintheWHITE Application Form.

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Multiple Applications

If you are suspected of having made multiple applications or if more than one application is made for your benefit, the number of Hong Kong Offer Shares applied for by HKSCC Nominees will be automatically reduced by the number of Hong Kong Offer Shares in respect of which you have given such instructions and/or in respect of which such instructions have been given for your benefit. Any electronic application instructions to make an application for the Hong Kong Offer Shares given by you or for your benefit to HKSCC shall be deemed to be an actual application for the purposes of considering whether multiple applications have been made.

Minimum Subscription Amount and Permitted Multiples

You may give or cause your broker or custodian who is a CCASS Broker Participant or a CCASS Custodian Participant to give electronic application instructions in respect of a minimum of 1,000 Hong Kong Offer Shares. Such instructions in respect of more than 1,000 Hong Kong Offer Shares must be in one of the numbers set out in the table in the Application Forms. No application for any other number of Hong Kong Offer Shares will be considered and any such application is liable to be rejected.

Time for Inputting Electronic Application Instructions

Those who are not CCASS Investor Participants can instruct their brokers or custodians who are CCASS Broker Participants or CCASS Custodian Participants to give electronic applications to HKSCC via CCASS terminals to apply for Hong Kong Offer Shares on their behalf.

CCASS Broker/Custodian Participants can input electronic application instructions at the following times on the following dates:

Tuesday, June 26, 2007 — 9: 00 a.m. to 8: 30 p.m.(1) Wednesday, June 27, 2007 — 8: 00 a.m. to 8: 30 p.m.(1) Thursday, June 28, 2007 — 8: 00 a.m. to 8: 30 p.m.(1) Friday, June 29, 2007 — 8: 00 a.m.(1) to 12: 00 noon

(1) These times are subject to change as HKSCC may determine from time to time with prior notification to CCASS Participants.

CCASS Investor Participants can input electronic application instructions from 9: 00 a.m. on Tuesday, June 26, 2007 until 12: 00 noon on Friday, June 29, 2007 (24 hours daily, except the last application day).

Effect of Bad Weather on the Opening of the Application Lists

The latest time for inputting your electronic application instructions will be 12: 00 noon on Friday, June 29, 2007, the last application day. If:

. a tropical cyclone warning signal number 8 or above; or

. a ‘‘black’’ rainstorm warning signal is in force in Hong Kong at any time between 9: 00 a.m. and 12: 00 noon on Friday, June 29, 2007, the last application day will be postponed to the next Business Day which does not have either of those warning signals in force in Hong Kong at any time between 9: 00 am. and 12: 00 noon on such day.

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Business Day means a day that is not a Saturday, Sunday or a public holiday in Hong Kong.

Allocation of Hong Kong Offer Shares

For the purposes of allocating Hong Kong Offer Shares, HKSCC Nominees will not be treated as an applicant. Instead, each CCASS Participant who gives electronic application instructions or each person for whose benefit each such instructions is given will be treated as an applicant.

Deposit of Share Certificates into CCASS and Refund of Application Monies

. No temporary document of title will be issued. No receipt will be issued for application monies received.

. If your application is wholly or partially successful, your share certificate(s) will be issued in the name of HKSCC Nominees and deposited into CCASS for the credit of the stock account of the CCASS Participant which you have instructed to give electronic application instructions on your behalf or your CCASS Investor Participant stock account at the close of business on Monday, July 9, 2007, or, in the event of a contingency, on any other date as shall be determined by HKSCC or HKSCC Nominees.

. We expect to make available the Offer Price, the application results of CCASS Participants (and where the CCASS Participant is a broker or custodian, our Company will include information relating to the relevant beneficial owner, if supplied) and your Hong Kong identity card/passport number or other identification code (Hong Kong business registration number for corporations) and the basis of allotment of the Hong Kong Public Offer in the manner described in ‘‘How to Apply for the Hong Kong Offer Shares — Publication of Results’’ and to publish the basis of allotment of the Hong Kong Public Offer in the newspapers on Monday, July 9, 2007. You should check the announcement made by our Company and report any discrepancies to HKSCC before 5: 00 p.m. on Monday, July 9, 2007 or such other date as shall be determined by HKSCC or HKSCC Nominees.

. If you have instructed your broker or custodian to give electronic application instructions on your behalf, you can also check the number of Hong Kong Offer Shares allotted to you and the amount of refund monies (if any) payable to you with that broker or custodian.

. If you have applied as a CCASS Investor Participant, you can also check the number of Hong Kong Offer Shares allotted to you and the amount of refund monies (if any) payable to you via the CCASS Phone System and the CCASS Internet System (under the procedures contained in HKSCC’s ‘‘An Operating Guide for Investor Participants’’ in effect from time to time) on Monday, July 9, 2007. Immediately after the credit of the Hong Kong Offer Shares to your CCASS Investor Participant stock account and the credit of refund monies to your designated bank account, HKSCC will also make available to you an activity statement showing the number of Hong Kong Offer Shares credited to your CCASS Investor Participant stock account and the amount of refund monies (if any) credited to your designated bank account.

. Refund of your application monies (if any) in respect of wholly and partially unsuccessful applications and/or difference between the Offer Price and the offer price per Share initially paid on application, in each case including brokerage of 1%, SFC transaction levy of 0.004% and Stock Exchange trading fee of 0.005%, will be credited to your designated bank account or the designated bank account of your broker or custodian on Monday, July 9, 2007. No interest will be paid thereon.

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Section 40 of the Companies Ordinance

For the avoidance of doubt, our Company and all other parties involved in the preparation of this prospectus acknowledge that each CCASS Participant who gives or causes to give electronic application instructions is a person who may be entitled to compensation under Section 40 of the Companies Ordinance (as applied by section 342E of the Companies Ordinance).

4. PERSONAL DATA

The section of the Application Form entitled ‘‘Personal Data’’ applies to any personal data held by our Company and the branch share registrar about you in the same way as it applies to personal data about applicants other than HKSCC Nominees.

Warning

The subscription of the Hong Kong Offer Shares by giving electronic application instructions to HKSCC is only a facility provided to CCASS Participants. Our Company, our Directors, the Sponsor, the Global Coordinator and the Underwriters take no responsibility for the application and provide no assurance that any CCASS Participant will be allotted any Hong Kong Offer Shares.

To ensure that CCASS Investor Participants can give their electronic application instructions to HKSCC through the CCASS Phone System or the CCASS Internet System, CCASS Investor Participants are advised not to wait until the last minute to input their electronic application instructions to the systems. In the event that CCASS Investor Participants have problems connecting to the CCASS Phone System or the CCASS Internet System to submit their electronic application instructions, they should either: (i) submit a WHITE or YELLOW Application Form; or (ii) go to HKSCC’s Customer Service Center to complete an input request form for electronic application instructions before 12: 00 noon on Friday, June 29, 2007.

5. CIRCUMSTANCES IN WHICH YOU WILL NOT BE ALLOTTED HONG KONG OFFER SHARES

Full details of the circumstances in which you will not be allotted the Hong Kong Offer Shares are set out in the notes attached to the Application Forms (whether you are making your application by an Application Form or electronically instructing HKSCC to cause HKSCC Nominees to apply on your behalf), and you should read them carefully. You should note in particular the following situations in which the Hong Kong Offer Shares will not be allotted to you:

. If your application is revoked:

By completing and submitting an Application Form or electronic application instructions to HKSCC, you agree that your application or the application made by HKSCC Nominees on your behalf may not be revoked on or before the end of the fifth day after the time of the opening of the application lists (excluding for this purpose any day which is a Saturday, Sunday or a public holiday in Hong Kong) unless a person responsible for this prospectus under section 40 of the Companies Ordinance (as applied by section 342E of the Companies Ordinance) gives a public notice under that section which excludes or limits the responsibility of that person for this prospectus. This agreement will take effect as a collateral contract with us, and will become binding when you lodge your Application Form or submit your electronic application instructions to HKSCC and an application has been made by HKSCC Nominees on your behalf accordingly. This collateral contract will be in consideration of our Company agreeing that it will not offer any Hong Kong Offer Shares to any

— 206 — HOW TO APPLY FOR THE HONG KONG OFFER SHARES person on or before the end of the fifth day after the time of the opening of the application lists (excluding for this purpose any day which is a Saturday, Sunday or a public holiday in Hong Kong) except by means of one of the procedures referred to in this prospectus.

If any supplement to this prospectus is issued, applicant(s) who have already submitted an application may or may not (depending on the information contained in the supplement) be notified that they can withdraw their applications. If applicant(s) have not been so notified, or if applicant(s) have been notified but have not withdrawn their applications in accordance with the procedure to be notified, all applications that have been submitted remain valid and may be accepted. Subject to the above, an application once made is irrevocable and applicants shall be deemed to have applied on the basisofthisprospectusassupplemented.

If your application or the application made by HKSCC Nominees on your behalf has been accepted, it cannot be revoked. For this purpose, acceptance of applications which are not rejected will be constituted by notification in the announcement of the results of allocation, and where such basis of allocation is subject to certain conditions or provides for allocation by ballot, such acceptance will be subject to the satisfaction of such conditions or results of the ballot respectively.

. Full discretion of our Company or our agents to reject or accept your application:

Our Company and the Global Coordinator (as agent for our Company), or agents and nominees, have full discretion to reject or accept any application, or to accept only part of any application.

Our Company and the Global Coordinator, in their capacity as our Company’s agent, and our agents and nominees do not have to give any reason for any rejection or acceptance.

. If the allotment of Hong Kong Offer Shares is void:

The allotment of Hong Kong Offer Shares to you or to HKSCC Nominees (if you give electronic application instructions or apply by a YELLOW Application Form) will be void if the Listing Committee of the Stock Exchange does not grant permission to list the Offer Shares either:

— within three weeks from the closing date of the application lists; or

— within a longer period of up to six weeks if the Listing Committee of the Stock Exchange notifies our Company of that longer period within three weeks of the closing date of the application lists.

. You will not receive any allotment if:

— you make multiple applications or suspected multiple applications;

— you or the person for whose benefit you apply for have applied for or taken up, or indicated an interest for, or have been or will be placed or allocated (including conditionally and/or provisionally) Offer Shares under the International Placing. By filling in any of the Application Forms or applying by giving electronic application instructions to HKSCC, you agree not to apply for Hong Kong Offer Shares as well as Offer Shares in the International Placing. Reasonable steps will be taken to identify and reject applications in the Hong Kong Public Offer from investors who have received Offer Shares in the

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International Placing, and to identify and reject indications of interest in the International Placing from investors who have received Hong Kong Offer Shares in the Hong Kong Public Offer;

— your payment is not made correctly;

— you pay by cheque or banker’s cashier order and the cheque or banker’s cashier order is dishonored upon its first presentation;

— your Application Form is not completed in accordance with the instructions as stated in the Application Form (if you apply by an Application Form);

— our Company or the Global Coordinator believes that by accepting your application, this would violate the applicable securities or other laws, rules or regulations of the jurisdiction in which your application is completed and/or signed;

— if you apply for more than 50% of the Hong Kong Offer Shares initially being offered in the Hong Kong Public Offer (that is 30,000,000 Offer Shares);

— the Underwriting Agreements do not become unconditional; or

— the Underwriting Agreements are terminated in accordance with their respective terms.

You should also note that you may apply for Shares under the Hong Kong Public Offer or indicate an interest for Shares under the International Placing, but may not do both.

6. HOW MUCH ARE THE HONG KONG OFFER SHARES

The maximum offer price is HK$5.28 per Offer Share. You must also pay brokerage of 1%, SFC transaction levy of 0.004% and Stock Exchange trading fee of 0.005%. This means that for every board lot of 1,000 Shares you will pay approximately HK$5,333.27. The Application Forms have tables showing the exact amount payable for multiples of Shares up to 30,000,000 Shares. Your application must be for a minimum of 1,000 Shares. Applications must be in one of the numbers set out in the tables in the Application Forms. No application for any other number of Hong Kong Offer Shares will be considered and any such application is liable to be rejected.

You must pay the amount payable upon application for the Shares by one cheque or one banker’s cashier order in accordance with the terms set out in the Application Form (if you apply by an Application Form).

If your application is successful, brokerage is paid to participants of the Stock Exchange (as the case may be) and the SFC transaction levy and Stock Exchange trading fee are paid to the Stock Exchange (in the case of the SFC transaction levy, collected on behalf of the SFC).

7. REFUND OF APPLICATION MONIES

If you do not receive any Hong Kong Offer Shares for any reasons, our Company will refund to you your application monies, including the related brokerage of 1%, SFC transaction levy of 0.004% and Stock Exchange trading fee of 0.005%. No interest will be paid thereon. All interest accrued on such monies prior to the date of dispatch of refund cheques will be retained for our benefit.

— 208 — HOW TO APPLY FOR THE HONG KONG OFFER SHARES

If your application is accepted only in part, our Company will refund to you the appropriate portion of your application monies, including the related brokerage of 1%, SFC transaction levy of 0.004% and Stock Exchange trading fee of 0.005%, without interest.

If the Offer Price as finally determined is less than HK$5.28 per Share (excluding brokerage, SFC transaction levy and Stock Exchange trading fee thereon) initially paid on application, our Company will refund to you the surplus application monies, together with the related brokerage of 1%, SFC transaction levy of 0.004% and Stock Exchange trading fee of 0.005% attributable to the surplus application monies, without interest. See ‘‘— Dispatch/Collection of share certificates and refund cheques’’.

In a contingency situation involving a substantial over-subscription, at the discretion of our Company and the Global Coordinator, cheques for applications for certain small denominations of Hong Kong Offer Shares (apart from successful applications) may not be cleared.

Refund of your application monies (if any) will be made on Monday, July 9, 2007 in accordance with the various arrangements as described above.

8. COMMENCEMENT OF DEALINGS IN THE OFFER SHARES

Dealings in the Offer Shares are expected to commence on Tuesday, July 10, 2007.

The Shares will be traded in board lots of 1,000 Shares each. The stock code of the Shares is 2020.

9. SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS

If the Stock Exchange grants the listing of, and permission to deal in, the Shares and we comply with the stock admission requirements of HKSCC, the Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of commencement of dealings in the Shares on the Stock Exchange or any other date HKSCC chooses. Settlement of transactions between participants of the Stock Exchange is required to take place in CCASS on the second business day after any trading day.

All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

Investors should seek the advice of their stockbroker or other professional advisor for details of the settlement arrangement as such arrangements may affect their rights and interests.

All necessary arrangements have been made enabling the Shares to be admitted into CCASS.

— 209 — APPENDIX I ACCOUNTANTS’ REPORT

The following is the text of a report, prepared for the purpose of incorporation in this prospectus, received from the auditors and reporting accountants of our Company, KPMG, Certified Public Accountants, Hong Kong.

8th Floor Prince’s Building 10 Chater Road Central Hong Kong

26 June 2007

The Board of Directors ANTA Sports Products Limited Morgan Stanley Asia Limited

Dear Sirs,

Introduction

We set out below our report on the financial information relating to ANTA Sports Products Limited (the ‘‘Company’’) and its subsidiaries (hereinafter collectively referred to as the ‘‘Group’’), including the combined income statements, combined statements of changes in equity and combined cash flow statements of the Group for each of the years ended 31 December 2004, 2005 and 2006 (the ‘‘relevant period’’) and the combined balance sheets of the Group as at 31 December 2004, 2005 and 2006 and the notes thereto (the ‘‘Financial Information’’) for inclusion in the prospectus of the Company dated 26 June 2007 (the ‘‘Prospectus’’).

The Company was incorporated in the Cayman Islands on 8 February 2007 as an exempted company with limited liability under the Companies Law, Cap 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands. Pursuant to a group reorganization (the ‘‘Reorganization’’) as detailed in the section headed ‘‘Corporate Reorganization’’ in Appendix VI to the Prospectus, which was completed on 15 June 2007, the business operations of manufacturing and trading of sporting goods, including footwear, apparel and accessories, with relevant assets and liabilities of ANTA (Fujian) Shoes Industry Co., Ltd. ( ) and Jinjiang ANTA Sports Products Trading Co., Ltd. ( ) (hereinafter collectively referred to as ‘‘Predecessor Entities’’), details of which are set out in Section A below, were transferred to the Group and the Company became the holding company of the subsidiaries now comprising the Group, details of which are set out in Section A below. The Company has not carried on any business since the date of its incorporation save for the Reorganization.

As at the date of this report, no audited financial statements have been prepared for the Company and the companies comprising the Group, except for Anda International Investment Limited ( ), ANTA (China) Co., Ltd. ( ), ANTA (Changting) Sports Products Co., Ltd. ( ), ANTA (Xiamen) Sports Goods Co., Ltd. ( ), Xiamen ANTA Investment Management Company Limited ( ), Shanghai Fengxian Sporting Goods Development Limited ( ) and Suzhou Fengxian Sporting Goods Co., Ltd. ( ), as they are either incorporated shortly or dormant before 31 December 2006 or are investment holding companies and have not carried on any business since their respective dates of establishment/incorporation or are not subject to statutory audit requirements under the relevant rules and regulations in their jurisdictions of establishment/incorporation.

— I-1 — APPENDIX I ACCOUNTANTS’ REPORT

The statutory financial statements for Anda International Investment Limited, ANTA (China) Co., Ltd., ANTA (Changting) Sports Products Co., Ltd., ANTA (Xiamen) Sports Goods Co., Ltd., Xiamen ANTA Investment Management Company Limited, Shanghai Fengxian Sporting Goods Development Limited and Suzhou Fengxian Sporting Goods Co., Ltd. which were prepared in accordance with Hong Kong Financial Reporting Standards (‘‘HKFRSs’’) issued by the Hong Kong Institute of Certified Public Accountants (‘‘HKICPA’’) or the relevant accounting rules and regulations applicable to enterprises in the People’s Republic of China (‘‘PRC’’), were audited during the relevant period by the respective statutory auditors as indicated below:

Name of company Financial period Auditors

Anda International Investment Period from KPMG Limited...... 1 September 2004 (date of incorporation) to 31 December 2005 and year ended 31 December 2006

ANTA(China)Co.,Ltd..... Yearsended Jinjiang Yonglixin Certified Public 31 December 2004, 2005 Accountant Corporate Limited and 2006 (Note (i))

ANTA (Changting) Sports Period from Changting Hexin Lianhe Certified ProductsCo.,Ltd...... 20 February 2006 (date of Public Accountant Corporate incorporation) to Limited (Note (i)) 31 December 2006

ANTA (Xiamen) Sports Goods Period from Quanzhou Zhonghe Certified Public Co.,Ltd...... 14 August 2006 (date of Accountant Corporate Limited incorporation) to (Note (i)) 31 December 2006

Xiamen ANTA Investment Period from Quanzhou Zhonghe Certified Public Management Company 1June2006(dateof Accountant Corporate Limited Limited...... incorporation) to (Note (i)) 31 December 2006

Shanghai Fengxian Sporting Period from Shanghai Jiarui Certified Public Goods Development Limited 20 October 2006 (date of Accountant Corporate Limited incorporation) to (Note (i)) 31 December 2006

Suzhou Fengxian Sporting Period from Jiangsu Gongzheng Certified Public GoodsCo.,Ltd...... 26 December 2006 (date Accountant Corporate Limited of incorporation) to (Note (i)) 31 December 2006

Note:

(i) The English translation of the company names is for reference only. The official names of these companies are in Chinese.

— I-2 — APPENDIX I ACCOUNTANTS’ REPORT

Basis of preparation

The Financial Information has been prepared by the directors of the Company based on the audited financial statements or, where appropriate, unaudited management accounts of the companies now comprising the Group, on the basis set out in Section A below, after making such adjustments as are appropriate (the ‘‘Underlying Financial Information’’). Adjustments have been made, for the purpose of this report, to restate the Underlying Financial Information to conform with International Financial Reporting Standards (‘‘IFRSs’’) and the disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’). IFRSs include International Accounting Standards and Interpretations.

Respective responsibilities of directors and reporting accountants

The directors of the Company are responsible for the preparation of the Financial Information which gives a true and fair view. In preparing the Financial Information which gives a true and fair view, it is fundamental that appropriate accounting policies are selected and applied consistently, that judgements and estimates are made which are prudent and reasonable and that the reasons for any significant departure from applicable accounting standards are stated.

It is our responsibility to form an independent opinion, based on our audit, on the Financial Information.

Basis of opinion

As a basis for forming an opinion on the Financial Information, for the purpose of this report, we have audited the Financial Information for the relevant period in accordance with Hong Kong Standards on Auditing issued by the HKICPA and we have carried out such additional procedures as we considered necessary in accordance with Auditing Guideline ‘‘Prospectuses and the Reporting Accountant’’ (Statement 3.340) issued by the HKICPA. We have not audited any financial statements of the companies comprising the Group in respect of any period subsequent to 31 December 2006.

An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the Financial Information. It also includes an assessment of the significant estimates and judgements made by the directors of the Company in the preparation of the Financial Information, and of whether the accounting policies are appropriate to the circumstances of the Group, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance as to whether the Financial Information is free from material misstatement. In forming our opinion we also evaluated the overall adequacy of the presentation of Financial Information. We believe that our audit provides a reasonable basis for our opinion.

Opinion

In our opinion, for the purposes of this report and on the basis of presentation set out in Section A below, all adjustments considered necessary have been made and the Financial Information gives a true and fair view of the Group’s combined financial position as at 31 December 2004, 2005 and 2006 and of the Group’s combined financial results and combined cash flows for the relevant period.

— I-3 — APPENDIX I ACCOUNTANTS’ REPORT

A. BASIS OF PRESENTATION

The combined income statements, combined statements of changes in equity and combined cash flow statements of the Group as set out in Section B include the results of operations of the companies comprising the Group following the consummation of the transfer of business from the Predecessor Entities for the relevant period (or where the companies were established/incorporated at a date later than 1 January 2004, for the period from the date of establishment/incorporation to 31 December 2006) as if the current group structure had been in existence throughout the relevant period. The combined balance sheets of the Group as at 31 December 2004, 2005 and 2006 as set out in Section B have been prepared to present the state of affairs of the companies comprising the Group following the consummation of the transfer of business from the Predecessor Entities as at the respective date as if the current group structure had been in existence as at the respective dates.

All material intra-group transactions and balances have been eliminated on combination.

At the date of this report, the Company had direct or indirect interests in the following subsidiaries, all of which are private companies, particulars of which are set out below:

Place and date of Issued and fully Attributable incorporation/ paid up/ equity interest Principal Name of company establishment registered capital Direct Indirect activities

Anta Enterprise Group Limited (‘‘Anta British Virgin USD10,000/ 100% — Investment holding Enterprise’’)...... Islands USD50,000 (the ‘‘BVI’’) 22 August 2006

Motive Force Sports Products Limited BVI USD10,000/ 100% — Investment holding (‘‘MotiveForce’’)...... 22 August 2006 USD50,000

Anda International Investment Limited Hong Kong HKD1,000,000/ — 100% Investment holding (‘‘AndaHongKong’’)...... 1 September 2004 HKD1,000,000

Keen Power International Limited Hong Kong HKD1/ — 100% Investment holding (‘‘KeenPower’’)...... 17 August 2006 HKD10,000

PRC HKD245,000,000/ — 100% Manufacturing and ANTA (China) Co., Ltd. 16 August 2000 HKD245,000,000 trading of (‘‘ANTA China’’) (Notes (i) and (iii)) sporting goods

PRC HKD30,000,000/ — 100% Manufacturing of ANTA (Changting) Sports Products 20 February 2006 HKD30,000,000 sporting goods Co., Ltd. (‘‘ANTA Changting’’) (Notes (i)and(iii))......

PRC HKD5,000,000/ — 100% Manufacturing of ANTA (Xiamen) Sports Goods Co., 14 August 2006 HKD20,000,000 sporting goods Ltd. (‘‘ANTA Xiamen’’) (Notes (i) and (iii))......

PRC HKD5,000,000/ — 100% Manufacturing of ANTA (Quanzhou) Sports Products 16 January 2007 HKD5,000,000 sporting goods Limited (‘‘ANTA Quanzhou’’) (Notes (i)and(iii))......

— I-4 — APPENDIX I ACCOUNTANTS’ REPORT

Place and date of Issued and fully Attributable incorporation/ paid up/ equity interest Principal Name of company establishment registered capital Direct Indirect activities

PRC HKD5,000,000/ — 100% Trading of sporting Xiamen ANTA Trading Co., Ltd. 18 January 2007 HKD5,000,000 goods (‘‘Xiamen Trading’’) (Notes (i) and (iii))......

PRC RMB50,000,000/ — 100% Investment holding Xiamen ANTA Investment 1 June 2006 RMB50,000,000 Management Company Limited (‘‘Xiamen Investment’’) (Notes (ii) and (iii)) ......

PRC RMB20,000,000/ — 100% Trading of sporting Shanghai Fengxian Sporting Goods 20 October 2006 RMB20,000,000 goods Development Limited (‘‘Shanghai Fengxian’’) (Notes (ii) and (iii)) . . .

PRC RMB1,000,000/ — 100% Trading of sporting Suzhou Fengxian Sporting Goods Co., 26 December 2006 RMB1,000,000 goods Ltd. (‘‘Suzhou Fengxian’’) (Notes(ii)and(iii))......

PRC RMB5,000,000/ — 100% Trading of sporting Guangzhou Fengxian Sporting Goods 7 February 2007 RMB5,000,000 goods Co., Ltd. (‘‘Guangzhou Fengxian’’) (Notes(ii)and(iii))......

PRC RMB1,000,000/ — 100% Trading of sporting Xiamen Fengxian Sporting Goods Co., 22 January 2007 RMB1,000,000 goods Ltd. (‘‘Xiamen Fengxian’’) (Notes (ii) and (iii)) ......

PRC RMB1,000,000/ — 100% Trading of sporting Harbin Fengxian Sporting Goods 8 January 2007 RMB1,000,000 goods Development Co., Ltd. (‘‘Harbin Fengxian’’) (Notes (ii) and (iii)) . . .

Notes:

(i) These entities are wholly foreign owned enterprises established in the PRC.

(ii) These entities are limited liability companies established in the PRC.

(iii) The English translation of the company names is for reference only. The official names of these companies are in Chinese.

Pursuant to the Reorganisation, the business operations of manufacturing and trading of sporting goods, including footwear, apparel and accessories, together with the relevant assets and liabilities of the Predecessor Entities were transferred to the companies comprising the Group.

Because the ultimate equity holders controlled the aforesaid business operations of the Predecessor Entities transferred to the companies comprising the Group before the Reorganisation and continue to control the companies comprising the Group after the Reorganisation, the Financial Information has been

— I-5 — APPENDIX I ACCOUNTANTS’ REPORT prepared as a reorganisation of businesses under common control. Accordingly, the relevant assets and liabilities of the Predecessor Entities transferred to the companies comprising the Group have been recognized at historical cost.

For the purpose of this report, the results of operations of manufacturing and trading of sporting goods, including footwear, apparel and accessories, of the Predecessor Entities for the relevant period have been included in the Group’s combined income statements, combined statements of changes in equity and combined cash flow statements for the relevant period. The state of affairs of the Predecessor Entities as at 31 December 2004, 2005 and 2006 have been included in the Group’s combined balance sheets at the respective dates.

The particulars of the Predecessor Entities are set out below:

Place and date of Issued and fully Attributable incorporation/ paid up/registered equity interest Name of company establishment capital Direct Indirect Principal activities

PRC RMB50,000,000/ — 100% Manufacturing and ANTA (Fujian) Shoes Industry 30 July 1994 RMB50,000,000 trading of Co., Ltd. (‘‘ANTA Fujian’’) sporting goods (Notes(i)and(iii))......

PRC RMB10,000,000/ — 100% Trading of sporting Jinjiang ANTA Sports Products 6 August 2002 RMB10,000,000 goods TradingCo.,Ltd.(‘‘ANTA Jinjiang’’) (Notes (ii) and (iii)) .

Notes:

(i) ANTA Fujian, a sino-foreign equity enterprise owned by the ultimate equity holders, transferred its business operations together with relevant assets and liabilities to ANTA China and become an inactive company since August 2006.

(ii) ANTA Jinjiang, a limited liability company wholly owned by the ultimate equity holders, transferred its business operations together with relevant assets and liabilities to ANTA China and was deregistered on 15 November 2006.

(iii) The English translation of the company names is for reference only. The official names of these companies are in Chinese.

— I-6 — APPENDIX I ACCOUNTANTS’ REPORT

B. FINANCIAL INFORMATION

1. Combined income statements

Years ended 31 December Section C 2004 2005 2006 Note RMB’000 RMB’000 RMB’000

Turnover...... 2 311,499 670,349 1,250,142 Costofsales...... (267,724) (544,478) (936,914)

Gross profit...... 43,775 125,871 313,228 Otherrevenue...... 3 500 1,509 2,046 Othernetincome...... 3 — — 521 Selling and distribution expenses...... (40,727) (61,162) (132,260) Administrativeexpenses...... (8,645) (15,082) (35,256)

(Loss)/profit from operations ...... (5,097) 51,136 148,279 Financecosts...... 4(a) (1,452) (922) (259)

(Loss)/profit before taxation ...... 4 (6,549) 50,214 148,020 Incometax...... 5(a) (1,854) (2,181) (603) (Loss)/profit for the year ...... (8,403) 48,033 147,417

Dividendsdeclaredduringtheyear.... 8 — — 22,854

(Loss)/earningspershare...... —basic(RMB)...... 9 (0.005) 0.027 0.082

The accompanying notes form part of the Financial Information.

— I-7 — APPENDIX I ACCOUNTANTS’ REPORT

2. Combined balance sheets

As at 31 December Section C 2004 2005 2006 Note RMB’000 RMB’000 RMB’000

Non-current assets Property,plantandequipment...... 10 62,343 138,127 160,806 Constructioninprogress...... 11 54,490 29,812 76,463 Leaseprepayments...... 12 11,392 24,715 24,331 Intangibleassets...... 13 693 1,657 3,566 Deferredtaxassets...... 23(b) 598 — —

Total non-current assets...... 129,516 194,311 265,166 ------Current assets Otherfinancialassets...... 14 — — 1,200 Inventories...... 15 26,065 59,189 154,466 Tradeandotherreceivables...... 16 94,738 106,040 202,113 Amountsduefromrelatedparties..... 21 7,156 15,172 52,175 Pledgeddeposits...... 17 — 1,475 4,900 Cashandcashequivalents...... 18 39,731 69,916 176,335

Total current assets ...... 167,690 251,792 591,189 ------Total assets ...... 297,206 446,103 856,355

Current liabilities Bankloans...... 19 30,000 — 50,000 Tradeandotherpayables...... 20 47,527 96,425 325,089 Amountsduetorelatedparties...... 21 12,607 2,141 1,597 Advances from the Controlling ShareholdersoftheCompany...... 21 45,923 236,153 220,472 Dividendpayable...... — — 21,286 Currenttaxation...... 23(a) 675 300 —

Total current liabilities ...... 136,732 335,019 618,444 ------Net current assets/(liabilities) ...... 30,958 (83,227) (27,255) ------Total assets less current liabilities.... 160,474 111,084 237,911 ------Non-current liabilities Deferred tax liabilities ...... 23(b) — 49 — ------Total liabilities ...... 136,732 335,068 618,444 ------Equity Sharecapital...... 24 157,349 61,060 51,216 Reserves...... 25 3,125 49,975 186,695

Total equity...... 160,474 111,035 237,911 ------Total liabilities and equity ...... 297,206 446,103 856,355

The accompanying notes form part of the Financial Information.

— I-8 — APPENDIX I ACCOUNTANTS’ REPORT

3. Combined statements of changes in equity

Attributable to equity shareholders of the Company Share Capital Statutory Exchange Retained Total Section C capital reserve reserve reserve profits equity Note RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Note 24) (Note 25) (Note 25) (Note 25) (Note 25)

At 1 January 2004..... 138,540 132 — — 11,396 150,068 Capitalinjection...... 24(a) 18,809 — — — — 18,809 Net loss for the year . . . — — — — (8,403) (8,403)

At 31 December 2004 . . 157,349 132 — — 2,993 160,474 Reduction of capital . . . 24(b) (96,289) — — — — (96,289) Exchange difference on translation of financial statements of operations outside China...... — — — (1,183) — (1,183) Net profit for the year . . — — — — 48,033 48,033 Appropriation to statutory reserve...... — — 4,141 — (4,141) —

At 31 December 2005 . . 61,060 132 4,141 (1,183) 46,885 111,035 Capitalcontribution.... 24(a) 156 — — — — 156 Reduction of capital . . . 24(b) (10,000) — — — — (10,000) Exchange difference on translation of financial statements of operations outside China...... — — — 12,157 — 12,157 Net profit for the year . . — — — — 147,417 147,417 Appropriation to statutory reserve...... — — 14,500 — (14,500) — Dividends declared during theyear...... 8 — — — — (22,854) (22,854)

At 31 December 2006 . . 51,216 132 18,641 10,974 156,948 237,911

The accompanying notes form part of the Financial Information.

— I-9 — APPENDIX I ACCOUNTANTS’ REPORT

4. Combined cash flow statements

Years ended 31 December Section C 2004 2005 2006 Note RMB’000 RMB’000 RMB’000

Operating activities (Loss)/profitbeforetaxation...... (6,549) 50,214 148,020 Adjustments for: —Depreciation...... 4,522 8,373 11,482 — Amortisation of lease prepayments 243 311 516 — Amortisation of intangible assets . 127 189 187 —Financecosts...... 1,452 922 259 —Interestincome...... (296) (492) (1,258) — Gain on disposal of property, plant andequipment...... — — (561) Foreignexchange...... — — 198

Operating (loss)/profit before changes in working capital ...... (501) 59,517 158,843 Increaseininventories...... (13,727) (33,124) (95,277) Increase in trade and other receivables. . (31,012) (11,302) (96,073) Decrease/(increase) in amounts due from relatedparties...... 1,944 (8,016) (37,003) Increaseinpledgeddeposits...... — (1,475) (3,425) Increase in trade and other payables . . . 13,251 47,317 229,595 Increase/(decrease) in amounts due to relatedparties...... 12,607 (10,466) (544)

Cash (used in)/generated from operations ...... (17,438) 42,451 156,116 Incometaxpaid...... (2,222) (1,909) (953)

Net cash (used in)/generated from operating activities ...... (19,660) 40,542 155,163 ------

Investing activities Payment for purchase of property, plant andequipment...... (5,936) (30,121) (28,253) Proceeds from sale of property, plant and equipment...... — 74 1,124 Payment for construction in progress . . . (32,199) (27,851) (54,053) Paymentforleaseprepayments...... — (13,634) (132) Paymentforintangibleassets...... (530) (1,153) (2,096) Payment for purchase of equity securities — — (1,200) Interestreceived...... 296 492 1,258

Netcashusedininvestingactivities . . (38,369) (72,193) (83,352) ------

— I-10 — APPENDIX I ACCOUNTANTS’ REPORT

Years ended 31 December Section C 2004 2005 2006 Note RMB’000 RMB’000 RMB’000

Financing activities Proceedsfrombankloans...... 40,000 80,000 100,000 Repaymentofbankloans...... (30,000) (110,000) (50,000) Proceedsfromcapitalinjection...... 24(a) 16,672 — 156 Distribution of capital on the deregistrationofANTAJinjiang.... 24(b) — — (10,000) Dividendspaid...... — — (1,568) Interestpaid...... (1,452) (922) (259) Increase/(decrease) in advances from the Controlling Shareholders of the Company...... 40,292 93,941 (3,672)

Net cash generated from financing activities ...... 65,512 63,019 34,657 ------

Net increase in cash and cash equivalents ...... 7,483 31,368 106,468 Cash and cash equivalents at 1 January 32,248 39,731 69,916 Effect of foreign exchange rate changes — (1,183) (49)

Cash and cash equivalents at 31 December...... 18 39,731 69,916 176,335

The accompanying notes form part of the Financial Information.

C. NOTES TO THE FINANCIAL INFORMATION

1. Significant accounting policies

(a) Statement of compliance

The Financial Information set out in this report has been prepared in accordance with International Financial Reporting Standards (‘‘IFRSs’’), which collective term includes all applicable individual International Financial Reporting Standards, International Accounting Standards (‘‘IASs’’) and Interpretations issued by the International Accounting Standards Board (‘‘IASB’’). The Financial Information also complies with the disclosure requirements of the Hong Kong Companies Ordinance and the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. A summary of the significant accounting policies adopted by the Group is set out below.

The Group did not prepare any combined financial statements previously. This is the Group’s first IFRS Financial Information and IFRS 1 has been applied.

The IASB has issued certain new and revised IFRSs that are not yet effective for the financial periods included in the relevant period. The Group has not early adopted these IFRSs in preparing the Financial Information for the relevant period (see note 31).

(b) Basis of preparation of the Financial Information

The Financial Information comprises the Company and its subsidiaries.

— I-11 — APPENDIX I ACCOUNTANTS’ REPORT

The Financial Information is presented in Renminbi (‘‘RMB’’), rounded to the nearest thousand. It is presented on the historical cost basis.

The preparation of the Financial Information in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Judgements made by management in the application of IFRSs that have significant effect on the Financial Information and estimates with a significant risk of material adjustment in the next year are discussed in note 30.

The accounting policies set out below have been applied consistently to all periods presented.

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account.

Financial statements of a subsidiary are included in the Financial Information from the date that control commences until the date that control ceases. Book value accounting is adopted for common control combinations in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination, and that control is not transitory.

Intra-group balances and transactions and any unrealised profits arising from intra-group transactions are eliminated in full in preparing the Financial Information. Unrealised losses resulting from intra-group transactions are eliminated in the same way as unrealised gains but only to the extent that there is no evidence of impairment.

(d) Other investments in equity securities

Investments in equity securities that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are recognized in the balance sheet at cost less impairment losses (see note 1(j)).

Investments are recognized/derecognized on the date the Group commits to purchase/sell the investments.

(e) Property, plant and equipment

Property, plant and equipment are stated in the combined balance sheets at cost less accumulated depreciation and impairment losses (see note 1(j)).

Gains or losses arising from the retirement or disposal of an item of property, plant and equipment are determined as the difference between the net disposal proceeds and the carrying amount of the item and are recognized in profit or loss on the date of retirement or disposal.

— I-12 — APPENDIX I ACCOUNTANTS’ REPORT

— Buildings held for own use which are situated on leasehold land are depreciated over the shorter of the unexpired term of lease and their estimated useful lives, being no more than 20 years after the date of completion. — Plant and machinery 5–10 years — Motor vehicles 5years — Furniture and fixtures 5years

Both the useful life of an asset and its residual value, if any, are reviewed annually.

(f) Construction in progress

Construction in progress represents property, plant and equipment under construction and equipment pending installation, and is stated at cost less impairment losses (see note 1(j)). Cost comprises direct costs of construction. Capitalization of these costs ceases and the construction in progress is transferred to property, plant and equipment when substantially all of the activities necessary to prepare the assets for their intended use are complete.

No depreciation is provided in respect of construction in progress until it is substantially completed and ready for its intended use.

(g) Lease prepayments

Lease prepayments represent cost of land use rights paid to the PRC’s governmental authorities. Land use rights are carried at cost less accumulated amortization and impairment losses (see note 1(j)). Amortization is charged to profit or loss on a straight-line basis over the respective periods of the rights.

(h) Intangible assets

Intangible assets that are acquired by the Group are stated in the balance sheet at cost less accumulated amortization and impairment losses (see note 1(j)).

Amortization of intangible assets is charged to profit or loss on a straight-line basis over the assets’ estimated useful lives. The following intangible assets are amortised from the date they are available for use and their estimated useful lives are as follows:

— patents and trademarks 10 years — computer software costs and others 3–5 years — club membership 5years

Both the period and method of amortization are reviewed annually.

(i) Operating lease charges

Where the Group has the use of assets under operating leases, payments made under the leases are charged to profit or loss in equal instalments over the accounting periods covered by the lease terms, except where an alternative basis is more representative of the pattern of benefits to be derived from the leased asset. Lease incentives received are recognized in profit or loss as an integral part of the aggregate net lease payments made.

— I-13 — APPENDIX I ACCOUNTANTS’ REPORT

(j) Impairment of assets

(i) Impairment of investments in equity securities and receivables

Investment in equity securities and current receivables that are carried at cost or amortized cost are reviewed at each balance sheet date to determine whether there is objective evidence of impairment. If any such evidence exists, any impairment loss is determined and recognized as follows:

— For unquoted equity securities carried at cost, the impairment loss is measured as the difference between the carrying amount of the financial asset and the estimated future cash flows, discounted at the current market rate of return for a similar financial asset where the effect of discounting is material. Impairment losses for equity securities are not reversed.

— For trade and other receivables carried at amortized cost, the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition of these assets), where the effect of discounting is material.

If in a subsequent period the amount of an impairment loss decreases and the decrease can be linked objectively to an event occurring after the impairment loss was recognized, the impairment loss is reversed through profit or loss. A reversal of an impairment loss shall not result in the asset’s carrying amount exceeding that which would have been determined had no impairment loss been recognized in prior years.

(ii) Impairment of other assets

— property, plant and equipment;

— construction in progress;

— lease prepayments;

— intangible assets; and

— investments in subsidiaries.

If any such indication exists, the asset’s recoverable amount is estimated.

— Calculation of recoverable amount

The recoverable amount of an asset is the greater of its net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of time value of money and the risks specific to the asset. Where an asset does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the smallest group of assets that generates cash inflows independently (i.e. a cash-generating unit).

— Recognition of impairment losses

An impairment loss is recognized in profit or loss whenever the carrying amount of an asset, or the cash-generating unit to which it belongs, exceeds its recoverable amount. Impairment losses recognized in respect of cash-generating units are allocated to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis, except that the carrying value of an asset will not be reduced below its individual fair value less costs to sell, or value in use, if determinable.

— I-14 — APPENDIX I ACCOUNTANTS’ REPORT

— Reversals of impairment losses

An impairment loss is reversed if there has been a favourable change in the estimates used to determine the recoverable amount.

A reversal of impairment loss is limited to the asset’s carrying amount that would have been determined had no impairment loss been recognized in prior years. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognized.

(k) Inventories

Inventories are carried at the lower of cost and net realizable value.

Cost is calculated using the weighted average cost formula and comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

When inventories are sold, the carrying amount of those inventories is recognized as an expense in the period in which the related revenue is recognized. The amount of any write-down of inventories to net realizable value and all losses of inventories are recognized as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories is recognized as a reduction in the amount of inventories recognized as an expense in the period in which the reversal occurs.

(l) Trade and other receivables

Trade and other receivables are initially recognized at fair value and thereafter stated at amortized cost less impairment losses for bad and doubtful debts (see note 1(j)), except where the receivables are interest-free loans made to related parties without any fixed repayment terms or the effect of discounting would be immaterial. In such cases, the receivables are stated at cost less impairment losses for bad and doubtful debts (see note 1(j)).

(m) Interest-bearing borrowings

Interest-bearing borrowings are recognized initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortized cost with any difference between cost and redemption value being recognized in profit or loss over the period of the borrowings, together with any interest and fees payable, using the effective interest method.

(n) Trade and other payables

Trade and other payables are initially recognized at fair value and thereafter stated at amortized cost unless the effect of discounting would be immaterial, in which case they are stated at cost.

(o) Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other financial institutions, and short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value, having been within three months of maturity at acquisition.

(p) Employee benefits

(i) Salaries, annual bonuses, paid annual leave, contributions to defined contribution retirement plans and the cost of non-monetary benefits are accrued in the year in which the associated services are rendered by employees. Where payment or settlement is deferred and the effect would be material, these amounts are stated at their present values.

— I-15 — APPENDIX I ACCOUNTANTS’ REPORT

(ii) Contributions to appropriate local defined contribution retirement schemes pursuant to the relevant labour rules and regulations in the PRC are recognized as an expense in profit or loss as incurred, except to the extent that they are included in the cost of inventories not yet recognized as an expense.

(q) Income tax

(i) Income tax for the year comprises current tax and movements in deferred tax assets and liabilities. Current tax and movements in deferred tax assets and liabilities are recognized in profit or loss except to the extent that they relate to items recognized directly in equity, in which case they are recognized in equity.

(ii) Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous periods.

(iii) Deferred tax assets and liabilities arise from deductible and taxable temporary differences respectively, being the differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred tax assets also arise from unused tax losses and unused tax credits.

Apart from differences which arose on initial recognition of assets and liabilities, all deferred tax liabilities, and all deferred tax assets to the extent that it is probable that future taxable profits will be available against which the asset can be utilized, are recognized. Future taxable profits that may support the recognition of deferred tax assets arising from deductible temporary differences include those that will arise from the reversal of existing taxable temporary differences, provided those differences relate to the same taxation authority and the same taxable entity, and are expected to reverse either in the same period as the expected reversal of the deductible temporary difference or in periods into which a tax loss arising from the deferred tax asset can be carried back or forward. The same criteria are adopted when determining whether existing taxable temporary differences support the recognition of deferred tax assets arising from unused tax losses and credits, that is, those differences are taken into account if they relate to the same taxation authority and the same taxable entity, and are expected to reverse in a period, or periods, in which the tax loss or credit can be utilised.

The amount of deferred tax recognized is measured based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax assets and liabilities are not discounted.

The carrying amount of a deferred tax asset is reviewed at each balance sheet date and is reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the related tax benefit to be utilised. Any such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available.

(iv) Current tax balances and deferred tax balances, and movements therein, are presented separately from each other and are not offset. Current tax assets are offset against current tax liabilities, and deferred tax assets against deferred tax liabilities if the Group has the legally enforceable right to set off current tax assets against current tax liabilities and the following additional conditions are met:

— in the case of current tax assets and liabilities, the Group intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously; or

— in the case of deferred tax assets and liabilities, if they relate to income taxes levied by the same taxation authority on either:

— the same taxable entity; or

— different taxable entities, which, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered, intend to realize the current tax assets and settle the current tax liabilities on a net basis or realize and settle simultaneously.

— I-16 — APPENDIX I ACCOUNTANTS’ REPORT

(r) Provisions and contingent liabilities

Provisions are recognized for liabilities of uncertain timing or amount when the Group has a legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material, provisions are stated at the present value of the expenditure expected to settle the obligation.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

(s) Revenue recognition

Provided it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be measured reliably, revenue is recognized in profit or loss as follows:

(i) Sale of goods

Revenue is recognized when the customer has accepted the related risks and rewards of ownership. Revenue excludes value added tax or other sales taxes and is after deduction of any trade discounts.

(ii) Interest income

Interest income is recognized as it accrues using the effective interest method.

(iii) Government grants

Government grants are recognized in the balance sheet initially when there is reasonable assurance that they will be received and that the Group will comply with the conditions attaching to them. Grants that compensate the Group for expenses incurred are recognized as revenue in profit or loss on a systematic basis in the same periods in which the expenses are incurred. Grants that compensate the Group for the cost of an asset are initially recognized as deferred income and subsequently recognized as revenue in profit or loss upon satisfaction of the conditions attaching to the grants.

(t) Translation of foreign currencies

Foreign currency transactions during the year are translated at the foreign exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rates ruling at the balance sheet date. Exchange gains and losses are recognized in profit or loss.

Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the foreign exchange rates ruling at the transaction dates.

The results of operations outside the PRC are translated into Renminbi at the exchange rates approximating the foreign exchange rates ruling at the dates of the transactions. Balance sheet items are translated into Renminbi at the foreign exchange rates ruling at the balance sheet date. The resulting exchange differences are recognized directly in a separate component of equity.

On disposal of an operation outside the PRC, the cumulative amount of the exchange differences recognized in equity which relate to that foreign operation is included in the calculation of the profit or loss on disposal.

(u) Borrowing costs

Borrowing costs are expensed in profit or loss in the period in which they are incurred.

— I-17 — APPENDIX I ACCOUNTANTS’ REPORT

(v) Research and development

Expenditure on research activities is recognized as an expense in the period in which it is incurred. Expenditure on development activities is capitalized if the product or process is technically and commercially feasible and the Group has sufficient resources and the intention to complete development. The expenditure capitalized includes the cost of materials, direct labour and an appropriate proportion of overheads. Other development expenditure is recognized as an expense in the period in which it is incurred.

(w) Dividends

Dividends are recognized as a liability in the period in which they are declared.

(x) Related parties

For the purposes of the Financial Information, a party is considered to be related to the Group if:

(i) the party has the ability, directly or indirectly through one or more intermediaries, to control the Group or exercise significant influence over the Group in making finance and operating policy decisions, or has joint control over the Group;

(ii) the Group and the party are subject to common control;

(iii) the party is a member of key management personnel of the Group or the Group’s parent, or a close family member of such an individual, or is an entity under the control, joint control or significant influence of such individuals;

(iv) the party is a close family member of a party referred to in (i) or is an entity under the control, joint control or significant influence of such individuals; or

(v) the party is a post-employment benefit plan which is for the benefit of employees of the Group or of any entity that is a related party of the Group.

Close family members of an individual are those family members who may be expected to influence, or be influenced by, that individual in their dealings with the entity.

(y) Segment reporting

A segment is a distinguishable component of the Group that is engaged either in providing products (business segment), or in providing products within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.

The Group operates in a single business segment, manufacturing and sales of sporting goods in the PRC. Accordingly, no segmental analysis is presented.

— I-18 — APPENDIX I ACCOUNTANTS’ REPORT

2. Turnover

The principal activities of the Group are manufacturing and trading of sporting goods, including footwear, apparel and accessories, in the PRC. Turnover represents the sales value of goods sold less returns, discounts, and value added taxes and other sales taxes, which may be analysed as follows:

Years ended 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Footwear...... 265,930 446,021 797,749 Apparel...... 41,170 215,032 409,928 Accessories...... 4,399 9,296 42,465

311,499 670,349 1,250,142

3. Other revenue and net income

Years ended 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Other revenue Interestincome...... 296 492 1,258 Governmentgrants...... 200 1,000 — Others...... 4 17 788

500 1,509 2,046

Other net income Gainondisposalofproperty,plantandequipment...... — — 561 Others...... — — (40)

— — 521

The Group was awarded government grants totalling RMB200,000 and RMB1,000,000 in 2004 and 2005 respectively on the condition that the Group would utilize the grants for the development of innovation and technology advancement in sportswear production. Grants were recognized as deferred income initially and credited as other revenue in profit or loss upon satisfaction of the conditions attaching to the grants.

— I-19 — APPENDIX I ACCOUNTANTS’ REPORT

4. (Loss)/profit before taxation

(Loss)/profit before taxation is arrived at after charging:

Years ended 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

(a) Finance costs: Interest on bank borrowings wholly repayable within five years...... 1,452 922 259

(b) Staff costs: Contributions to defined contribution retirement plans . . . 59 141 30 Salaries,wagesandotherbenefits...... 10,566 34,164 85,068

10,625 34,305 85,098

(c) Other items: Amortization —leaseprepayments...... 243 311 516 —intangibleassets...... 127 189 187 Auditors’remuneration...... 196 191 187 Depreciation...... 4,522 8,373 11,482 Operatingleasechargesinrespectofproperties...... — 8 342 Sub-contractingcharges...... — — 33,867 Researchanddevelopmentcosts*...... — 908 4,914

* The amounts represent staff costs of employees in the Research and Development Department, which are included in the total staff costs as disclosed in note 4(b).

5. Income tax in the combined income statements

(a) Taxation in the combined income statements represents:

Years ended 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Current tax — PRC income tax Provisionfortheyear...... 2,265 1,530 652 Under-provisioninrespectofprioryear...... 130 4 —

2,395 1,534 652

Deferred tax Originationandreversaloftemporarydifferences...... (541) 647 (49)

1,854 2,181 603

(i) Pursuant to the rules and regulations of the Cayman Islands and BVI, the Group is not subject to any income tax in the Cayman Islands and BVI.

(ii) No provision has been made for Hong Kong Profits Tax as the Group does not earn any income subject to Hong Kong Profits Tax during the relevant period.

— I-20 — APPENDIX I ACCOUNTANTS’ REPORT

(iii) Pursuant to the income tax rules and regulations of the PRC, the companies comprising the Group and the Predecessor Entities in the PRC are liable to PRC enterprise income tax as follows:

— ANTA China is a foreign investment enterprise and is entitled to tax concessions whereby the profit for the first two financial years beginning with the first profit-making year is exempted from income tax in the PRC and the profit for each of the subsequent three years is taxed at 50% of the prevailing tax rate set by the local authority. The first profit-making year of ANTA China is 2005. Accordingly, ANTA China is exempted from PRC enterprise income tax from 1 January 2005 to 31 December 2006 and the applicable rate from 1 January 2007 to 31 December 2009 is 12%. With effect from 1 January 2010, the applicable tax rate is 25%.

— Shanghai Fengxian is a limited liability company established under the laws of the PRC and is situated in the Pudong District of Shanghai. The applicable tax rate of Shanghai Fengxian is 15%.

— ANTA Fujian is a sino-foreign equity enterprise. The applicable tax rate of ANTA Fujian is 27%.

— ANTA Jinjiang is a limited liability company established under the laws of the PRC. It is liable to PRC enterprise income tax at a rate of 33%.

— No provision for PRC enterprise income tax has been made for other PRC companies in the Group during the relevant period as they have not yet commenced business operations.

(b) Reconciliation between tax expense/(credit) and accounting (loss)/profit at applicable tax rates:

Years ended 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

(Loss)/profitbeforetaxation...... (6,549) 50,214 148,020

Notional tax on profit before taxation, calculated at the rates applicable in the countries concerned...... 1,715 2,170 673 Tax effect of non-deductible expenses ...... 9 10 — Tax effect of non-taxable income ...... — (3) (70) Under-provisioninprioryear...... 130 4 —

Actualtaxexpenses...... 1,854 2,181 603

6. Directors’ remuneration

Details of directors’ remuneration of the Company are set out below:

Year ended 31 December 2004

Basic salaries, Contributions allowances to retirement and other benefit Fees benefits scheme Bonuses Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Executive directors Mr.DingShizhong...... — 22 — — 22 Mr.DingShijia...... — 21 — — 21 Mr.LaiShixian...... — — — — — Mr.WangWenmo...... — 24 — — 24 Mr. Wu Yonghua ...... — — — — —

Total...... — 67 — — 67

— I-21 — APPENDIX I ACCOUNTANTS’ REPORT

Year ended 31 December 2005

Basic salaries, Contributions allowances to retirement and other benefit Fees benefits scheme Bonuses Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Executive directors Mr.DingShizhong...... — 21 — — 21 Mr.DingShijia...... — 73 — — 73 Mr.LaiShixian...... — 22 — — 22 Mr.WangWenmo...... — 24 — — 24 Mr. Wu Yonghua ...... — — — — —

Total...... — 140 — — 140

Year ended 31 December 2006

Basic salaries, Contributions allowances to retirement and other benefit Fees benefits scheme Bonuses Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Executive directors Mr.DingShizhong...... — 120 — — 120 Mr.DingShijia...... — 131 — — 131 Mr.LaiShixian...... — 118 — — 118 Mr.WangWenmo...... — 118 — — 118 Mr. Wu Yonghua ...... — — — — —

Total...... — 487 — — 487

During the relevant period, no amount was paid or payable by the Company to the directors or any of the five highest paid individuals set out in note 7 below as an inducement to join or upon joining the Group or as compensation for loss of office. There was no arrangement under which a director waived or agreed to waive any remuneration during the relevant period.

7. Individual with highest emoluments

Of the five individuals with the highest emoluments, three are also directors of the Company for 2004 and 2005, and four for 2006 whose remuneration is disclosed in note 6 above. The remuneration in respect of the remaining two individuals in 2004 and 2005 and the one individual in 2006 are as follows:

Years ended 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Salariesandotheremoluments...... 66 129 228 Contributionstoretirementbenefitscheme...... — — —

66 129 228

— I-22 — APPENDIX I ACCOUNTANTS’ REPORT

8. Dividends

Years ended 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Finaldividenddeclaredduringtheyear...... — — 22,854

Dividends presented during the relevant period represent dividends declared by ANTA Fujian and ANTA Jinjiang, Predecessor Entities of the Group, to their shareholders. The rates of dividend and the number of shares ranking for dividends are not prescribed as such information is not meaningful having regard to the purpose of this report.

These dividends are not indicative of the future dividend policy.

9. (Loss)/earnings per share

The calculation of basic (loss)/earnings per share for the relevant period is based on the net (loss)/profit attributable to equity shareholders of the Company for each of the years ended 31 December 2004, 2005 and 2006 and on the number of shares in issue as at the date of the Prospectus as if the shares were outstanding throughout the entire relevant period.

There were no dilutive potential ordinary shares during the relevant period and, therefore, diluted earnings per share are not presented.

— I-23 — APPENDIX I ACCOUNTANTS’ REPORT

10. Property, plant and equipment

Plant and Motor Furniture Buildings machinery vehicles and fixtures Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Cost: At 1 January 2004...... 2,621 18,207 3,943 2,686 27,457 Additions...... — 4,476 714 2,883 8,073 Transfer from construction in progress (note 11) 32,438 2,699 — 311 35,448

At 31 December 2004 ...... 35,059 25,382 4,657 5,880 70,978 ------

At 1 January 2005...... 35,059 25,382 4,657 5,880 70,978 Additions...... 101 21,898 1,999 6,123 30,121 Transfer from construction in progress (note 11) 51,644 974 — 1,492 54,110 Disposals...... — (102) — — (102)

At 31 December 2005 ...... 86,804 48,152 6,656 13,495 155,107 ------

At 1 January 2006...... 86,804 48,152 6,656 13,495 155,107 Additions...... 1,102 17,851 4,919 4,381 28,253 Transfer from construction in progress (note 11) 5,429 1,042 — — 6,471 Disposals...... — (856) (160) (928) (1,944)

At 31 December 2006 ...... 93,335 66,189 11,415 16,948 187,887 ------

Accumulated depreciation: At 1 January 2004...... 586 1,496 1,653 378 4,113 Chargefortheyear...... 1,214 1,927 621 760 4,522

At 31 December 2004 ...... 1,800 3,423 2,274 1,138 8,635 ------

At 1 January 2005...... 1,800 3,423 2,274 1,138 8,635 Chargefortheyear...... 2,662 3,278 778 1,655 8,373 Written back on disposals...... — (28) — — (28)

At 31 December 2005 ...... 4,462 6,673 3,052 2,793 16,980 ------

At 1 January 2006...... 4,462 6,673 3,052 2,793 16,980 Chargefortheyear...... 3,935 4,072 1,488 1,987 11,482 Written back on disposals...... — (468) (157) (756) (1,381)

At 31 December 2006 ...... 8,397 10,277 4,383 4,024 27,081 ------

Net book value: At 31 December 2004 ...... 33,259 21,959 2,383 4,742 62,343

At 31 December 2005 ...... 82,342 41,479 3,604 10,702 138,127

At 31 December 2006 ...... 84,938 55,912 7,032 12,924 160,806

— I-24 — APPENDIX I ACCOUNTANTS’ REPORT

11. Construction in progress

2004 2005 2006 RMB’000 RMB’000 RMB’000

At1January...... 61,858 54,490 29,812 Additions...... 28,080 29,432 53,122 Transfertoproperty,plantandequipment(note10)...... (35,448) (54,110) (6,471)

At31December...... 54,490 29,812 76,463

Construction in progress comprises costs incurred on buildings and plant and equipment not yet completed at the respective balance sheet dates.

12. Lease prepayments

2004 2005 2006 RMB’000 RMB’000 RMB’000

Cost: At1January...... 12,141 12,141 25,775 Addition...... — 13,634 132

At31December...... 12,141 25,775 25,907 ------

Accumulated amortization: At1January...... 506 749 1,060 Chargefortheyear...... 243 311 516

At31December...... 749 1,060 1,576 ------

Net book value: At31December...... 11,392 24,715 24,331

Interests in leasehold land represent prepayments of land use rights premiums to the PRC authorities. The Group’s leasehold land is located in the PRC, on which the manufacturing plants were built. The Group is granted land use rights for a period of 50 years.

— I-25 — APPENDIX I ACCOUNTANTS’ REPORT

13. Intangible assets

Computer Patents and software trademarks Others Total RMB’000 RMB’000 RMB’000 RMB’000

Cost: At 1 January 2004...... 191 77 216 484 Additions...... — 530 — 530

At 31 December 2004 ...... 191 607 216 1,014 ------

At 1 January 2005...... 191 607 216 1,014 Additions...... 859 294 — 1,153

At 31 December 2005 ...... 1,050 901 216 2,167 ------

At 1 January 2006...... 1,050 901 216 2,167 Additions...... 1,576 217 303 2,096

At 31 December 2006 ...... 2,626 1,118 519 4,263 ------

Accumulated amortization: At 1 January 2004...... 91 7 96 194 Chargefortheyear...... 64 19 44 127

At 31 December 2004 ...... 155 26 140 321 ------

At 1 January 2005...... 155 26 140 321 Chargefortheyear...... 79 69 41 189

At 31 December 2005 ...... 234 95 181 510 ------

At 1 January 2006...... 234 95 181 510 Chargefortheyear...... 89 59 39 187

At 31 December 2006 ...... 323 154 220 697 ------

Net book value: At 31 December 2004 ...... 36 581 76 693

At 31 December 2005 ...... 816 806 35 1,657

At 31 December 2006 ...... 2,303 964 299 3,566

The amortization charge for the year is included in cost of sales and administrative expenses in the combined income statements.

14. Other financial assets

As at 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Available-for-sale equity securities: —unlisted,atcost...... — — 1,200

— I-26 — APPENDIX I ACCOUNTANTS’ REPORT

15. Inventories

(a) Inventories in the combined balance sheets comprise:

As at 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Rawmaterials...... 9,836 34,864 102,306 Workinprogress...... — 498 2,390 Finished goods ...... 16,229 23,827 49,770

26,065 59,189 154,466

(b) An analysis of the amount of inventories recognized as an expense is as follows:

Years ended 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Costofinventoriessold...... 267,724 544,478 934,359 Write-downofinventories...... — — 2,555

267,724 544,478 936,914

16. Trade and other receivables

As at 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Tradereceivables...... 44,664 51,434 78,256 Depositsandprepayments...... 43,942 47,433 102,826 Others...... 6,132 7,173 21,031

94,738 106,040 202,113

All of the trade and other receivables are expected to be recovered within one year. An ageing analysis of the trade receivables is as follows:

As at 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Within3months...... 22,618 35,821 73,844 3monthsto6months...... 11,041 10,347 1,508 6monthsto1year...... 8,613 4,010 2,597 Over1year...... 2,392 1,256 307

44,664 51,434 78,256

The Group normally grants an average credit period of 30 to 90 days to its trade customers.

17. Pledged deposits

Bank deposits have been pledged to banks as security for certain banking facilities (see note 20).

— I-27 — APPENDIX I ACCOUNTANTS’ REPORT

18. Cash and cash equivalents

As at 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Depositswithbanks...... — 15,000 56,025 Cashatbankandinhand...... 39,731 54,916 120,310

39,731 69,916 176,335

As at 31 December 2004, 2005 and 2006, cash and bank balances that were placed with banks in the PRC and included in the cash and cash equivalents above amounted to RMB26,528,000, RMB68,978,000 and RMB157,606,000 respectively. Remittance of funds out of the PRC is subject to the exchange restrictions imposed by the PRC government.

Included in cash and cash equivalents in the combined balance sheet are the following amounts denominated in a currency other than the functional currency of the entity to which they relate:

As at 31 December 2004 2005 2006 ’000 ’000 ’000

UnitedStatesdollars...... 1,201 — —

19. Bank loans

As at 31 December 2004, 2005 and 2006, the bank loans were repayable as follows:

As at 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Within1year...... 30,000 — 50,000

The bank loans as at 31 December 2004 and 2006 were unsecured and carried interest at 4.779% and 5.508% per annum respectively.

20. Trade and other payables

As at 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Tradepayables...... 20,462 29,963 210,158 Bills payable ...... — 29,500 42,500 Receiptsinadvance...... 6,603 14,814 27,979 Otherpayablesandaccruals...... 20,462 22,148 44,452

47,527 96,425 325,089

Bills payable as at 31 December 2005 and 2006 were secured by pledged bank deposits as disclosed in note 17.

— I-28 — APPENDIX I ACCOUNTANTS’ REPORT

An ageing analysis of the trade and bills payables is as follows:

As at 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Within3months...... 13,185 20,151 231,782 3monthsto6months...... 2,658 24,498 7,617 6monthsto1year...... 4,065 9,971 7,197 Over1year...... 554 4,843 6,062

20,462 59,463 252,658

21. Amounts due from/(to) related parties/advances from the Controlling Shareholders of the Company

The amounts due from/(to) related parties and the advances from the Controlling Shareholders of the Company are unsecured, interest-free and repayable on demand.

22. Employee retirement benefits

Defined contribution retirement plans

Pursuant to the relevant labour rules and regulations in the PRC, the PRC subsidiaries now comprising the Group participate in a defined contribution retirement benefit scheme (the ‘‘Scheme’’) organized by the PRC municipal government authority in the Fujian province whereby the Group is required to make contributions to the Scheme at the rate of 18% of the eligible employees’ salaries. The local government authority is responsible for the entire pension obligations payable to retired employees.

The Group has no other material obligation for the payment of pension benefits associated with the Scheme beyond the annual contributions described above.

23. Income tax in the combined balance sheets

(a) Current taxation in the combined balance sheets represents:

As at 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

ProvisionforPRCincometax...... 675 300 —

— I-29 — APPENDIX I ACCOUNTANTS’ REPORT

(b) Deferred tax assets and liabilities recognized:

The components of deferred tax assets/(liabilities) recognized in the combined balance sheets and the movements during the year are as follows:

Accrued expenses and others RMB’000

Deferred tax arising from: At 1 January 2004...... 57 Creditedtoprofitorloss...... 541

At 31 December 2004 ...... 598

At 1 January 2005...... 598 Chargedtoprofitorloss...... (647)

At 31 December 2005 ...... (49)

At 1 January 2006...... (49) Creditedtoprofitorloss...... 49

At 31 December 2006 ...... —

As at 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Represented by: Deferredtaxasset...... 598 28 — Deferredtaxliability...... — (77) —

598 (49) —

24. Share capital

The Company was incorporated after 31 December 2006 and the Reorganization was not completed as at 31 December 2006. The share capital as at the respective balance sheet dates represented the aggregate amount of paid-in capital of the companies now comprising the Group, after elimination of investments in subsidiaries.

(a) Capital injection

In 2004, the equity holders of ANTA China and ANTA Jinjiang injected capital totalling RMB17,749,000 to the entities, which was satisfied by cash of RMB15,612,000 and the transfer of certain property, plant and equipment with net carrying value of RMB2,137,000 to the entities.

Anda Hong Kong was incorporated on 1 September 2004 with an authorized and issued share capital of HK$1,000,000 comprising 1,000,000 shares of HK$1 each. The issued capital was fully paid in cash at par.

Keen Power was incorporated on 17 August 2006 with an authorized share capital of HK$10,000 comprising 10,000 shares of HK$1 each. 1 share was issued for cash at par.

Anta Enterprise and Motive Force were incorporated on 22 August 2006 with registered capital of US$50,000 and US$10,000 was issued for cash at par respectively.

— I-30 — APPENDIX I ACCOUNTANTS’ REPORT

(b) Reduction of capital

On 22 November 2005, Anda Hong Kong acquired all the capital of ANTA China previously held by companies owned by the ultimate equity holders, amounting to RMB96,289,000, at a consideration of the same amount. The acquisition was satisfied by way of setting up of unsecured and interest free advances from the ultimate equity holders to Anda Hong Kong. As a result of the acquisition, ANTA China became a wholly-owned subsidiary of Anda Hong Kong. Accordingly, this was reflected as a reduction of capital in the combined statements of changes in equity for the year ended 31 December 2005 and a corresponding increase of the same amount in the advances from the Controlling Shareholders of the Company.

ANTA Jinjiang was deregistered on 15 November 2006 following the transfer of its operations to other subsidiaries of the Group. As a result of the deregistration, the capital in the combined statements of changes in equity for the year ended 31 December 2006 was reduced by ANTA Jinjiang’s registered capital of RMB10,000,000.

25. Reserves

(a) Capital reserve

For the purpose of this report, the capital reserve at 31 December 2004, 2005 and 2006 represented the excess of paid-in capital of the companies comprising the Group.

(b) Statutory reserve

Pursuant to applicable PRC regulations, a PRC subsidiary is required to appropriate 10% of its profit-after-tax (after offsetting prior year losses) to the reserve until such reserve reaches 50% of the registered capital. The transfer to the reserve must be made before distribution of dividends to shareholders. The statutory reserve can be utilized, upon approval by the relevant authorities, to offset accumulated losses or to increase registered capital of the company, provided that the balance after such issue is not less than 25% of its registered capital.

The exchange reserve comprises all foreign exchange differences arising from the translation of the financial statements of operations outside the PRC which are dealt with in accordance with the accounting policies as set out in note 1(t).

(d) Distributable reserve

The Company was incorporated on 8 February 2007 and has not carried out any business since the date of its incorporation. Accordingly, there was no reserve available for distribution to shareholders as at 31 December 2006.

On the basis set out in Section A above, the aggregate amount of distributable reserves at 31 December 2004, 2005 and 2006 of the companies comprising the Group were RMB2,993,000, RMB46,885,000 and RMB156,948,000 respectively.

26. Financial instruments

Exposure to credit, liquidity, interest rate and currency risks arises in the normal course of the Group’s business. These risks are limited by the Group’s financial management policies and practices described below.

(a) Credit risk

The Group’s credit risk is primarily attributable to trade and other receivables. Credit evaluations are performed on all customers requiring credit over a certain amount. These receivables are due within 30 to 90 days from the date of billing. Debtors with balances that are more than three months from the date of billing are requested to settle all outstanding balances before any further credit is granted.

— I-31 — APPENDIX I ACCOUNTANTS’ REPORT

At the balance sheet date, the Group has a certain concentration of credit risk as 13%, 13% and 13% and 50%, 47% and 52% of the total trade receivables were due from the Group’s largest customer and the five largest customers as at 31 December 2004, 2005 and 2006 respectively.

The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the combined balance sheets.

(b) Liquidity risk

Individual operating entities within the Group are responsible for their own cash management, including the short term investment of cash surpluses and the raising of loans to cover expected cash demands, subject to approval by the Company’s board when the borrowings exceed certain predetermined levels of authority. The Group’s policy is to regularly monitor current and expected liquidity requirements and its compliance with lending covenants, to ensure that it maintains sufficient reserves of cash and readily realisable marketable securities and adequate committed lines of funding from major financial institutions to meet its liquidity requirements in the short and longer term.

The interest rates and maturity information of the Group’s bank loans are disclosed in note 19.

(d) Commodity price risk

The major raw materials used in the production of the Group’s products included polymers and plastics. The Group is exposed to fluctuations in the prices of these raw materials which are influenced by global as well as regional supply and demand conditions. Fluctuations in the prices of raw materials could adversely affect the Group’s financial performance. The Group historically has not entered into any commodity derivative instruments to hedge the potential commodity price changes.

(e) Foreign currency risk

As most of the Group’s monetary assets and liabilities are denominated in Renminbi and the Group conducts its business transactions principally in Renminbi, the exchange rate risk of the Group is not significant and the Group does not employ any financial instruments for hedging purposes.

(f) Fair values

All financial assets and liabilities are carried at amounts not materially different from their fair values as at 31 December 2004, 2005 and 2006.

(g) Business risk

The Group’s primary business is the design, manufacturing and sales of branded sports footwear, apparel and related accessories. The Group’s financial results are influenced by the rapidity with which designs are copied by competitors and reproduced at much lower prices, as well as by the Group’s ability to continue to create new designs that find favour in the market place, maintain a larger network of distributors, manufacture a sufficient quantities to meet fashionable sales, and dispose of excess inventories without excessive losses. Based on these factors, the Group may experience significant fluctuations in its future financial results.

— I-32 — APPENDIX I ACCOUNTANTS’ REPORT

27. Commitments

(a) Operating leases

The total future minimum lease payments under non-cancellable operating leases are payable as follows:

As at 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Within1year...... — — 3,471 After1yearbutwithin5years...... — — 5,474

— — 8,945

The Group leases a number of properties under operating leases. The leases typically run for an initial period of one to five years, with an option to renew when all terms are renegotiated. None of the lease includes contingent rentals.

(b) Capital commitments

Capital commitments outstanding at 31 December 2004, 2005 and 2006 not provided for in the Financial Information were as follows:

As at 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Contractedfor...... 15,753 10,256 22,453 Authorizedbutnotcontractedfor...... 43,719 56,123 271,799

59,472 66,379 294,252

28. Material related party transactions

In addition to the related party information disclosed elsewhere in the Financial Information, the Group entered into the following material related party transactions.

During the relevant period, the directors are of the view that the following companies are related parties of the Group:

Name of party Relationship

Effectively 30% owned by Mr. Ding Shizhong, a Controlling Fujian Anda Light Industrial Development Shareholder of the Company, and 40% by Mr. Lai Shixian, Co., Ltd.* (‘‘Fujian Light Industrial’’) . . . executive director of the Company

Effectively 60% owned by Mr. Ding Shizhong, a Controlling Quanzhou Anda Packaging Co., Ltd.* Shareholder of the Company, and 40% by Fujian Light Industrial (‘‘QuanzhouAnda’’)......

Effectively 50% owned by Mr. Ding Shijia and 50% by Mr. Wang Changting Anta Sports Products Co., Ltd.* Wenmo, Controlling Shareholders of the Company (‘‘ChangtingSports’’)......

Effectively 10 % owned by Mr. Ding Shizhong, 10% by Mr. Ding Jinjiang Shifa Light Industrial Co., Ltd.* Shijia and 60% by Mr. Ding Hemu, Controlling Shareholders of the (‘‘JinjiangShifa’’)...... Company, 10% by Ms. Ding Youmian and 10% by Ms. Ding Liming, the family members of Mr. Ding Shizhong and Mr. Ding Shijia, executive directors of the Company

— I-33 — APPENDIX I ACCOUNTANTS’ REPORT

Name of party Relationship

Anta International Group Holdings Limited Effectively 100% owned by Mr. Ding Shizhong, Mr. Ding Shijia, Mr. (‘‘AntaInternational’’)...... Wang Wenmo, Mr. Wu Yonghua and Mr. Ke Yufa, Controlling Shareholders of the Company

Anda Investments Capital Limited Effectively 100% owned by Mr. Ding Hemu, a Controlling Shareholder (‘‘AndaInvestments’’)...... of the Company

Anda Holdings International Limited Effectively 100% owned by Ms. Ding Yali, a Controlling Shareholder (‘‘AndaHoldings’’)...... of the Company

* The English translation of the company names is for reference only. The official names of these companies are in Chinese.

(a) Recurring transactions

Particulars of significant transactions between the Group and the above related parties during the relevant period and expected to continue after the listing of the Company are as follows:

Years ended 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Purchases of raw materials —QuanzhouAnda...... — 4,021 6,539

Lease of land and properties —JinjiangShifa...... — — 292

The directors of the Company are of the opinion that the above related party transactions were conducted on normal commercial terms and in the ordinary course of business. The directors have confirmed that the above transactions will continue in the future after the listing of the Company’s shares on the Stock Exchange.

— I-34 — APPENDIX I ACCOUNTANTS’ REPORT

(b) Non-recurring transactions

Included in the balances as set out in note 28(c) are unsecured and interest free advances made to/from related parties of the Group which are not expected to continue after the listing of the Company, the maximum balances of which during the years ended 31 December 2004, 2005 and 2006 are as follows:

Years ended 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Short term advances to a company controlled by the Directors of the Company — Fujian Light Industrial...... 4,900 13,909 10,279

Short term advances to companies controlled by the Controlling Shareholders of the Company —AntaInternational...... — — 130 —AndaInvestments...... — — 11 —AndaHoldings...... — — 15

— — 156

Short term advances to the Controlling Shareholders of the Company — Mr. Ding Shizhong ...... — — 30 —Mr.WangWenmo...... — — 50 —Mr.DingHemu...... — 66 13,050 —Ms.DingYali...... 2,000 2,000 —

2,000 2,066 13,130

Short term advances to/(from) close family members of Mr. Ding Shizhong, a Controlling Shareholder of the Company —Mr.DingSiren...... 256 — 22,900 —Ms.DingLiming...... (5,000) (5,000) —

(4,744) (5,000) 22,900

Short term advances from a company controlled by the Controlling Shareholders of the the Company —ChangtingSports...... 5,000 5,000 —

Short term advances from the Controlling Shareholders of the Company — Mr. Ding Shizhong ...... 12,142 12,812 82,998 — Mr. Ding Shijia ...... 2,000 181,843 173,440 —Mr.WangWenmo...... — — 22,854 —Mr.KeYufa...... — — 601 — Mr. Wu Yonghua ...... — — 12,029 —Ms.DingYali...... — — 23,456 —Mr.DingHemu...... 31,781 41,498 55,623

45,923 236,153 371,001

The directors of the Company have confirmed that the above transactions will not be continued in the future after the listing of the Company’s shares on the Stock Exchange.

— I-35 — APPENDIX I ACCOUNTANTS’ REPORT

In addition, the Group had the following significant transactions with related parties:

Years ended 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Purchases of apparel —ChangtingSports...... 3,482 15,210 10,892

Sale of raw materials —ChangtingSports...... — — 26,803

As at the balance sheet dates, the Group had the following balances with related parties:

As at 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Trade balances due from related parties —ChangtingSports...... — 1,197 5,710

Trade balances due to related parties —ChangtingSports...... 2,607 — 199 —QuanzhouAnda...... — 141 1,106

2,607 141 1,305

Advances to related parties — Fujian Light Industrial...... 4,900 13,909 10,279

Amount due to related parties —JinjiangShifa...... — — 292

Amounts due from the Controlling Shareholders of the Company — Mr. Ding Shizhong ...... — — 30 —Mr.WangWenmo...... — — 50 —Mr.DingHemu...... — 66 13,050 —Ms.DingYali...... 2,000 — —

2,000 66 13,130

Amounts due from other related parties —Mr.DingSiren...... 256 — 22,900 —AntaInternational...... — — 130 —AndaInvestments...... — — 11 —AndaHoldings...... — — 15

256 — 23,056

Advances from related parties —ChangtingSports...... 5,000 2,000 — —Ms.DingLiming...... 5,000 — —

10,000 2,000 —

— I-36 — APPENDIX I ACCOUNTANTS’ REPORT

As at 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Advances from the Controlling Shareholders of the Company — Mr. Ding Shizhong ...... 12,142 12,812 82,997 — Mr. Ding Shijia ...... 2,000 181,843 61,695 —Mr.WangWenmo...... — — 22,854 —Mr.KeYufa...... — — 601 — Mr. Wu Yonghua ...... — — 12,029 —Ms.DingYali...... — — 23,456 —Mr.DingHemu...... 31,781 41,498 16,840

45,923 236,153 220,472

(i) The amounts due from/(to) related parties are unsecured, interest free and are expected to be recovered/ repaid within one year. There was no provision made against these amounts at 31 December 2004, 2005 and 2006.

(ii) On 26 January 2007, the Group settled HK$75,000,000 in cash to the Controlling Shareholders of the Company. On 4 April 2007, the Controlling Shareholders of the Company entered into an agreement with Anta Enterprise and assigned the remaining amount of HK$144,376,000 of the advances from the Controlling Shareholders of the Company to Anta Enterprise at a nominal consideration of HK$1. This assignment will be reflected as a reduction to the advance from the Controlling Shareholders of the Company and a corresponding increase in the capital reserve.

(iii) All other balances with related parties as at 31 December 2006 have been subsequently settled in 2007.

(d) Key management personnel remuneration

Remuneration for key management personnel of the Group, including amounts paid to the Company’s directors as disclosed in note 6 and certain of the highest paid employees as disclosed in note 7, is as follows:

Years ended 31 December 2004 2005 2006 RMB’000 RMB’000 RMB’000

Short-termemployeebenefits...... 188 505 1,572

Total remuneration is included in ‘‘staff costs’’ (see note 4(b)).

29. Ultimate holding company

The Directors consider the ultimate holding company of the Company as at 31 December 2006 to be Anta International Group Holdings Limited, which is incorporated in the British Virgin Islands. This entity does not produce financial statements available for public use.

30. Significant accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The selection of critical accounting policies, the judgements and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in condition and assumptions are factors to be considered when reviewing the Financial Information. The principal accounting policies are set forth in note 1. The Group believes the following critical accounting policies involve the most significant judgements and estimates used in the preparation of the Financial Information.

— I-37 — APPENDIX I ACCOUNTANTS’ REPORT

(a) Impairments

If circumstances indicate that the carrying value of an asset may not be recoverable, the asset may be considered ‘‘impaired’’, and an impairment loss may be recognized in profit or loss. The carrying amounts of assets are reviewed periodically in order to assess whether the recoverable amounts have declined below the carrying amounts. These assets are tested for impairment whenever events or changes in circumstances indicate that their recorded carrying amounts may not be recoverable. When such a decline has occurred, the carrying amount is reduced to recoverable amount.

The recoverable amount is the greater of the fair value less costs to sell and the value in use. In determining the value in use, expected cash flows generated by the asset are discounted to their present value, which requires significant judgement relating to level of sales volume, sales revenue and amount of operating costs. The Group uses all readily available information in determining an amount that is a reasonable approximation of recoverable amount, including estimates based on reasonable and supportable assumptions and projections of sales volume, sales revenue and amount of operating costs.

(b) Write-down of inventories

The Group determines the write-down for obsolescence of inventories. These estimates are made with reference to aged inventories analysis, projections of expected future salability of goods and management experience and judgement. Based on this review, write-down of inventories will be made when the carrying amounts of inventories decline below their estimated net realisable value. Due to changes in market conditions, actual salability of goods may be different from estimation and profit or loss could be affectedbydifferencesin this estimation.

Property, plant and equipment are depreciated on a straight-line basis over the estimated useful lives, after taking into account the estimated residual value. Intangible assets are amortised on a straight-line basis over the estimated useful lives. The Group reviews the estimated useful lives of the assets regularly in order to determine the amount of depreciation and amortization expenses to be recorded during any reporting period. The useful lives are based on the Group’s historical experience with similar assets and taking into account anticipated technological changes. The depreciation and amortization expenses for future periods are adjusted if there are significant changes from previous estimates.

31. Possible impact of amendments, new standards and interpretations issued but not yet effective for the relevant period

Up to the date of issue of this Accountants’ Report, the IASB has issued a number of amendments, new standards and interpretations which are not yet effective for the relevant period and which have not been adopted in this Accountants’ Report.

Of these developments, the following relate to matters that may be relevant to the Group’s operations and Financial Information:

Effective for accounting periods beginning on or after

IFRS7...... Financialinstruments:disclosure 1January2007 AmendmentstoIAS1...... Presentationoffinancialstatements: 1 January 2007 capital disclosure

The directors have confirmed that the Group is in the process of making an assessment of what the impact of these amendments, new standards and new interpretations is expected to be in the period of initial application. So far it has concluded that the adoption of them is unlikely to have a significant impact on the Group’s results of operations and financial position.

— I-38 — APPENDIX I ACCOUNTANTS’ REPORT

D. BALANCE SHEET OF THE COMPANY

TheCompanywasincorporatedon8February2007with an authorized share capital of HK$50,000. The Company issued a total of 10,000 shares at nominal value of HK$0.1 each to Anta International, Anda Holdings and Anda Investments as part of the Reorganisation as detailed in the section headed ‘‘Statutory and general information’’ in Appendix VI to the Prospectus. The Company has not carried on any business since its date of incorporation.

E. SUBSEQUENT EVENTS

The following significant events took place subsequent to 31 December 2006:

(a) Group reorganization

The companies comprising the Group underwent a reorganization to facilitate the Group’s structure in preparation for the listing of the Company’s shares on the Stock Exchange. Details of the Reorganization are set out in the section headed ‘‘History and Corporate Structure’’ in Appendix VI to the Prospectus. As a result of the Reorganization, the Company became the holding company of the Groupon16June2007.

As part of the restructuring, certain assets and liabilities historically associated with the operation of ANTA Fujian, a Predecessor Entity, for which the results in the Relevant Period have been included in the Financial Information, were not transferred to the Group and were retained by ANTA Fujian.

The following assets and liabilities included in the Financial Information as at 31 December 2006 were retained by ANTA Fujian and will be reflected as a deemed distribution to the Controlling Shareholders during 2007.

RMB’000

Fixedassets...... 1,787 Tradeandotherreceivablesandprepayments...... 69,875 Cashandcashequivalents...... 826 Otherfinancialassets...... 1,200 Other liabilities and accruals...... (38,166)

35,522

(b) Valuation of properties

For the purpose of the listing of the Company’s shares on the Main Board of the Stock Exchange, the Group’s properties were valued as at 30 April 2007 by CB Richard Ellis, an independent firm of surveyors.

On 4 April 2007, the Controlling Shareholders entered into an agreement with Anta Enterprise and assigned HK$144,376,000 of the advances to Anta Enterprise at a nominal consideration of HK$1.

— I-39 — APPENDIX I ACCOUNTANTS’ REPORT

(d) Share option scheme

Pursuant to the written resolution of the shareholders of the Company passed on 11 June 2007, the Company has adopted the Pre-IPO Share Option Scheme and conditionally adopted the Share Option Scheme. The principal terms of the Pre-IPO Share Option Scheme and Share Option Scheme are set out in Appendix VI to the Prospectus.

(e) Enactment of new tax law in the PRC

On 29 December 2006, the Standing Committee of the Tenth National People’s Congress (‘‘NPC’’) passed a resolution to submit the draft Enterprise Income Tax Law (‘‘New Tax Law’’) to the Tenth NPC plenary session for voting. The New Tax Law was adopted on 16 March 2007. Under the New Tax Law, which will come into effect on 1 January 2008, domestic enterprises and foreign- invested enterprises that are currently entitled to preferential tax treatments may continue to enjoy those preferential tax treatments until 1 January 2013. The expected financial effect of the New Tax Law, if any, will be reflected in the Company’s 2007 financial statements. The enactment of the New Tax Law is not expected to have any financial effect on the amounts accrued in the balance sheet in respect of current tax payable.

F. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Company or any of the companies now comprising the Group in respect of any period subsequent to 31 December 2006.

Yours faithfully, KPMG Certified Public Accountants Hong Kong

— I-40 — APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

The information set forth in this appendix does not form part of the Accountants’ Report prepared by KPMG, Certified Public Accountants, Hong Kong, the reporting accountants of the Company, as set forth in Appendix I to this prospectus, and is included herein for illustrative purposes only.

The Unaudited Pro Forma Financial Information should be read in conjunction with the section headed ‘‘Financial Information’’ in this prospectus and the Accountants’ Report set forth in Appendix I to this prospectus.

(A) UNAUDITED PRO FORMA FULLY DILUTED FORECAST EARNINGS PER SHARE

The following unaudited pro forma fully diluted forecast earnings per share for the year ending December 31, 2007 has been prepared on the basis of the notes set out below for the purpose of illustrating the effect of the Global Offering as if it had taken place on December 31, 2006. This unaudited pro forma fully diluted forecast earnings per share has been prepared for illustrative purposes only and, because of its nature, it may not give a true picture of the financial results of the Group following the Global Offering.

Forecast combined profit attributable to the equity holders for the year ending December 31, 2007 (Note1)...... Not less than RMB384.4 million (approximately HK$392.2 million)

Unaudited pro-forma forecast earnings per Share — fully diluted (Note2).... Not less than RMB0.16 (approximately HK$0.16)

Notes:

(1) The unaudited forecast combined profit attributable to the equity holders for the year ending December 31, 2007 is extracted from the section headed ‘‘Financial Information — Profit Forecast.’’ The bases and assumptions on which the profit forecast has been prepared are set out in Appendix III to this prospectus.

(2) The calculation of the unaudited forecast earnings per Share on a pro forma fully dilutedbasisisbasedontheforecast combined profit attributable to the equity holders for the year ending December 31, 2007 assuming that we had been listed since January 1, 2007 and a total of 2,400,000,000 Shares were issued and outstanding during the entire year. This calculation assumes that the 600,000,000 Shares to be issued pursuant to the Global Offering were issued on January 1, 2007 (assuming the over-allotment option is not exercised). The forecast combined profit attributable to the equity holders for the year ending December 31, 2007 is based on the combined results of the Group based on the unaudited management accounts of the Group for the three months ended March 31, 2007, and a forecast of the combined results for the remaining nine months ending December 31, 2007.

— II-1 — APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

(B) UNAUDITED PRO FORMA ADJUSTED NET TANGIBLE ASSETS

The following statement of unaudited pro forma adjusted net tangible assets of the Group is based on the combined net assets derived from the audited financial statements of the Group as at December 31, 2006, as set out in Appendix I to this prospectus and adjusted as follows:

Unaudited Audited combined pro forma net tangible assets Estimated net Net assets not Unaudited pro adjusted net of the Group as at proceeds from the assumed by the forma adjusted tangible assets December 31, 2006 Global Offering Group net tangible assets per Share RMB’000 RMB’000 RMB’000 RMB’000 RMB (Note 1) (Note 2) (Note 3)

BasedontheOffer Price of HK$4.28 perShare..... 234,345 2,406,174 (35,522) 2,604,997 1.09

BasedontheOffer Price of HK$5.28 perShare..... 234,345 2,976,534 (35,522) 3,175,357 1.32

Notes:

(1) The estimated net proceeds from the Global Offering are based on the Offer Price of HK$4.28 and HK$5.28 per Share, after deduction of the underwriting fees and other related expenses payable by the Company. No account has been taken of the Shares which may be allotted and issued upon exercise of the Over-allotment Option.

(2) Pursuant to the Corporate Reorganisation, certain business and assets will be retained by ANTA Fujian, a predecessor entity of our Group, and had been treated as a deemed distribution by our Group upon our Company becoming the holding company of our Group on June 16, 2007. Our unaudited pro forma net tangible assets have been reduced by RMB35.5 million accordingly after taking into account this deemed distribution, which is based on the financial information of ANTA Fujian prepared in accordance with International Financial Reporting Standards as at December 31, 2006.

(3) The unaudited pro forma adjusted net tangible asset value per Share is arrived at after the adjustments referred to in the preceding paragraph and on the assumption of a total of 2,400,000,000 Shares being the number of shares in issue as at December 31, 2006, which takes no account any Shares which may be allotted and issued upon exercise of the Over- allotment Option, or which may be allotted and issued or repurchased by the Company pursuant to the mandates as set out in the paragraph headed ‘‘Written resolutions of our shareholders passed on June 11, 2007’’ in Appendix VI to this prospectus.

(4) Details of valuation of the Group’s properties interest as at April 30, 2007 are set out in Appendix IV to this prospectus. The Group will not incorporate the revaluation surplus or deficit in its financial statements for the year ending December 31, 2007. It is the Group’s accounting policy to state its property, plant and equipment at cost less accumulated depreciation and any impairment loss in accordance with International Accounting Standard 16, rather than at revalued amounts. The impairment reviews performed by the Company as at December 31, 2006 did not indicate the need to recognize any impairment loss for its property, plant and equipment. With reference to the valuation of the Group’s property interests as set out in Appendix IV to this prospectus, there was a revaluation surplus of the Group’s properties of approximately RMB56.6 million. If the revaluation surplus was incorporated in the Group’s financial statements for the year ending 31 December 2007, an additional depreciation of approximately RMB1.7 million would be charged.

— II-2 — APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

(C) COMFORT LETTER ON UNAUDITED PRO FORMA FINANCIAL INFORMATION RELATING TO THE ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS AND FULLY DILUTED FORECAST EARNINGS PER SHARE

The following is the text of a report received from our reporting accountants, KPMG, Certified Public Accountants, Hong Kong, prepared for the purpose of incorporation in this prospectus, in respect of the additional unaudited pro forma financial information of our Group.

8th Floor Prince’s Building 10 Chater Road Central Hong Kong

The Board of Directors ANTA Sports Products Limited Morgan Stanley Asia Limited

26 June 2007

Dear Sirs,

We report on the unaudited pro forma statement of unadjusted net tangible assets and unaudited pro forma fully diluted forecast earnings per share (‘‘the Unaudited Pro Forma Financial Information’’) of the Company and its subsidiaries (‘‘the Group’’) set out in Parts A and B of Appendix II of the prospectus dated 26 June 2007 (‘‘the Prospectus’’), which has been prepared by the directors of the Company solely for illustrative purposes to provide information about how the Global Offering might have affected the financial information presented. The basis of preparation of the Unaudited Pro Forma Financial Information is set out in Parts A and B of Appendix II of the Prospectus.

Responsibilities

It is the responsibility solely of the directors of the Company to prepare the Unaudited Pro Forma Financial Information in accordance with Paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ‘‘Listing Rules’’) and with reference to Accounting Guideline 7 ‘‘Preparation of Pro Forma Financial Information for inclusion in Investment Circulars’’ issued by the Hong Kong Institute of Certified Public Accountants (‘‘HKICPA’’).

It is our responsibility to form an opinion, as required by paragraph 4.29 of the Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

Basis of opinion

We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements (‘‘HKSIR’’) 300 ‘‘Accountants’ Reports on Pro Forma Financial Information in Investment Circulars’’ issued by the HKICPA. Our work consisted primarily of comparing the unadjusted financial

— II-3 — APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION information with source documents, considering the evidence supporting the adjustments and discussing the Unaudited Pro Forma Financial Information with the directors of the Company. The engagement did not involve independent examination of any of the underlying financial information.

Our work did not constitute an audit or review made in accordance with Hong Kong Standards on Auditing or Hong Kong Standards on Review Engagements issued by the HKICPA, and accordingly, we do not express any such audit or review assurance on the Unaudited Pro Forma Financial Information.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated, that such basis is consistent with the accounting policies of the Group and that the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

The Unaudited Pro Forma Financial Information is for illustrative purposes only, based on the judgements and assumptions of the directors of the Company, and because of its hypothetical nature, it does not provide any assurance or indication that any event will take place in the future and may not be indicative of:

. the financial position of the Group as at 31 December 2006 or any future date; or

. the earnings per share of the Group for the year ending 31 December 2007 or any future periods.

We make no comments regarding the reasonableness of the amount of net proceeds from the issuance of the Company’s Shares, the application of those net proceeds, or whether such use will actually take place as described under ‘‘Use of Proceeds’’ in the section headed ‘‘Future Plans and Use of Proceeds’’ set out in the Prospectus.

Opinion

In our opinion:

a) the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated;

b) such basis is consistent with the accounting policies of the Group; and

c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to Paragraph 4.29(1) of the Listing Rules.

Yours faithfully, KPMG Certified Public Accountants Hong Kong

— II-4 — APPENDIX III PROFIT FORECAST

The forecast of the combined profit after taxation and minority interests but before extraordinary items of our Group for the year ending December 31, 2007 is set out in the paragraph headed ‘‘Profit forecast’’ in the section headed ‘‘Financial information’’ in this prospectus.

(A) BASIS AND ASSUMPTIONS

The forecast of the combined profit after taxation and minority interests but before extraordinary items of our Group for the year ending December 31, 2007 prepared by the Directors is based on the unaudited management accounts of our Group for the three months ended March 31, 2007 and a forecast of the combined results of our Group for the remaining nine months ending December 31, 2007. The Directors are not aware of any extraordinary items which have arisen or are likely to arise during the year ending December 31, 2007. The forecast has been prepared on the basis of the accounting policies consistent in all material aspects with those currently adopted by our Group as summarized in the accountants’ report, the text of which is set out in Appendix I to this prospectus and is based on the following principal assumptions:

(a) there will be no material changes in existing government policies or political, legal (including changes in legislation or regulations or rules), fiscal or economic conditions in Hong Kong, the PRC or any other places in which any member of our Group is incorporated, carries on business;

(b) there will be no material changes in the bases or rates of taxation or duties applicable to the activities of our Group in Hong Kong, in the PRC, or any other place in which our Group operates or in which any member of our Group is incorporated; and

(c) there will be no material adverse changes in the foreign currency exchange rates and interest rates from those currently prevailing.

— III-1 — APPENDIX III PROFIT FORECAST

(B) LETTER FROM THE REPORTING ACCOUNTANTS

Set out below is the text of a letter from the reporting accountants, KPMG, Certified Public Accountants, Hong Kong for the purpose of incorporation in this prospectus in connection with the profit forecast for the year ending 31 December 2007.

8th Floor Prince’s Building 10 Chater Road Central Hong Kong

The Board of Directors ANTA Sports Products Limited Morgan Stanley Asia Limited

26 June 2007

Dear Sirs,

We have reviewed the accounting policies and calculations adopted in arriving at the forecast combined profit attributable to the equity holders of ANTA Sports Products Limited (the ‘‘Company’’) and its subsidiaries (hereinafter collectively referred to as the ‘‘Group’’) for the year ending 31 December 2007 (the ‘‘Forecast’’), for which the Directors of the Company (the ‘‘Directors’’) are solely responsible, as set out under ‘‘Profit forecast’’ in the section headed ‘‘Financial Information’’ in the prospectus of the Company dated26June2007(the‘‘Prospectus’’).

The Forecast has been prepared by the Directors based on the unaudited management accounts of the Group for the three months ended 31 March 2007 and a forecast of the combined results of the Group for the remaining nine months ending 31 December 2007.

In our opinion, so far as the accounting policies and calculations are concerned, the Forecast has been properly compiled on the bases and assumptions adopted by the Directors as set out in Appendix III to the Prospectus and is presented on a basis consistent in all material respects with the accounting policies normally adopted by the Group as set out in our Accountants’ Report dated 26 June 2007, the text of which is set out in Appendix I to the Prospectus.

Yours faithfully, KPMG Certified Public Accountants Hong Kong

— III-2 — APPENDIX III PROFIT FORECAST

The following is the text of a letter, prepared for inclusion in this prospectus by Morgan Stanley in connection with the profit forecast for the year ending December 31, 2007.

Morgan Stanley Asia Limited 30th Floor Three Exchange Square Hong Kong

June 26, 2007

The Board of Directors ANTA Sports Products Limited Dongshan Industrial Zone Chidian Town Jinjiang City Fujian Province Postal code: 362212 The People’s Republic of China

Dear Sirs,

We refer to the forecast combined profit attributable to the equity holders of ANTA Sports Products Limited (the ‘‘Company’’) and its subsidiaries (the ‘‘Group’’) for the year ending December 31, 2007 (the ‘‘Forecast’’) as set out in the section headed ‘‘Financial Information — Profit forecast’’ in the prospectus of the Company dated June 26, 2007 (the ‘‘Prospectus’’).

The Forecast, for which the Directors are solely responsible, has been prepared by them based on the unaudited management accounts of the Group for the three months ended March 31, 2007 and a forecast of the combined results of the Group for the remaining nine months ending December 31, 2007.

We have discussed with you the bases and assumptions made by the Directors of the Company upon which the Forecast has been made. We have also considered, and relied upon, the letter dated June 26, 2007 addressed to yourselves and ourselves from KPMG regarding the accounting policies and calculations upon which the Forecast has been made.

On the basis of the information comprising the Forecast and on the basis of the accounting policies and calculationsadoptedbyyouandreviewedbyKPMG,weare of the opinion that the Forecast, for which you as Directors of the Company are solely responsible, has been made after due and careful enquiry.

Yours faithfully,

For and on behalf of Morgan Stanley Asia Limited Terence Keyes Managing Director

— III-3 — APPENDIX IV PROPERTY VALUATION

The following is the text of a letter with the summary of values and valuation certificate received from CB Richard Ellis Limited, prepared for the purpose of incorporation in the prospectus, in connection with their valuation as at April 30, 2007 of all the property interests of the Group.

June 26, 2007

The Board of Directors ANTA Sports Products Limited Dongshan Industrial Zone Chidian Town Jinjiang City Fujian Province Postal code: 362212 The People’s Republic of China

Dear Sirs,

In accordance with your instructions for us to value the property interests held by ANTA Sports Products Limited (the ‘‘Company’’) and its subsidiaries (hereinafter together know as the ‘‘Group’’) in the People’s Republic of China (the ‘‘PRC’’) and Hong Kong. We confirm that we have carried out inspections, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the capital values of such property interests as at April 30, 2007 (the ‘‘date of valuation’’).

Our valuation is our opinion of Market Value which is defined to mean ‘‘the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.’’

Unless otherwise stated, our valuation is prepared in accordance with the ‘‘First Edition of The HKIS Valuation Standards on Properties’’ published by The Hong Kong Institute of Surveyors (the ‘‘HKIS’’). We have also complied with all the requirements contained in Paragraph 34(2), (3) of Schedule 3 of the Companies Ordinance (Cap. 32), Chapter 5, Practice Note 12 and Practice Note 16 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ‘‘Listing Rules’’).

Our valuation has been made on the assumption that the owner sells the properties on the open market without the benefit or burden of a deferred term contract, leaseback, joint venture, management agreement or any similar arrangement, which would serve to affect the values of the property interests.

—IV-1— APPENDIX IV PROPERTY VALUATION

Unless otherwise stated, all the property interests are valued by the comparison method on the assumption that each property can be sold with the benefit of vacant possession. Comparison is based on prices realized on actual transactions or asking prices of comparable properties. Comparable properties with similar sizes, character and locations are analyzed, and carefully weighted against all respective advantages and disadvantages of each property in order to arrive at a fair comparison of value.

In valuing the property interests in Group I, which are held by the Group for occupation in the PRC, we have valued each of these property interests by the direct comparison approach assuming sale of each of these property interests in its existing state with the benefit of vacant possession and by making reference to comparable sale transactions as available in the relevant market.

The property interests in Group II and Group III, which are rented by the Group in the PRC and Hong Kong respectively, are considered to have no commercial value due mainly to the prohibition against assignment or sub-letting or otherwise due to the lack of substantial profit rent.

For the property interests in Group IV, which are property interests to be acquired by the Group in the PRC, are those the Group has entered into agreements with relevant owner of the property or government authority, while the Group has not yet obtained the State-owned Land Use Rights Certificates and/or the payment of the land premium has not yet been fully settled as at the date of valuation, we have ascribed no commercial value to the property interests.

In the course of our valuation for the property interests in the PRC, we have relied on the legal opinion provided by the Group’s PRC legal advisor, Commerce & Finance Law Offices. We have been provided with extracts from title documents relating to such property interests. We have not, however, searched the original documents to verify ownership or existence of any amendment which does not appear on the copies handed to us. All documents have been used for reference only.

We have relied to a considerable extent on information given by the Group, in particular, but not limited to, planning approvals, statutory notices, easements, tenancies and floor areas. No on-site measurement has been taken. Dimensions, measurements and areas included in the valuation certificate are only approximations. We have taken every reasonable care both during inspecting the information provided to us and in making relevant enquiries. We have no reason to doubt the truth and accuracy of the information provided to us by the Company, which is material to the valuation. We were also advised by the Group that no material facts have been omitted from the information provided to us.

We have inspected the properties to such extent as for the purpose of this valuation. In the course of our inspection, we did not notice any serious defects. However, we have not carried out any structural survey nor any tests were made on the building services. Therefore, we are not able to report whether the properties are free of rot, infestation or any other structural defects. No site investigations were carried out to determine the suitability of the subsoil condition and services etc. for the buildings and we have assumed that these aspects are satisfactory. Our valuation does not make any allowance for contamination or pollution of the land, if any, which may have occurred as a result of past usage.

We have not carried out site measurements to verify the correctness of the site areas of the properties and have assumed that the site areas shown on the documents and official site plan handed to us are correct. During our inspection, we have not carried out investigations on the sites to determine the suitability of the ground conditions and the services for any future development. Our valuation is on the basis that these aspects are satisfactory.

—IV-2— APPENDIX IV PROPERTY VALUATION

No allowance has been made in our valuation for any charges, mortgages or amounts owing on the property interests nor for any expenses or taxationwhichmaybeincurredineffectingasale.Unless otherwise stated, it is assumed that the property interests are free from encumbrances, restrictions and outgoing of an onerous nature which could affect their values.

Unless otherwise stated, all monetary amounts are stated in Renminbi (‘‘RMB’’).

We enclose herewith a summary of valuation and our valuation certificate.

Yours faithfully, For and on behalf of CB Richard Ellis Limited Kam Hung YU BSc (Hons) FHKIS FRICS RPS (GP) FHIREA Senior Managing Director Valuation & Advisory Services

Note: Mr. Yu is the Senior Vice President of the Hong Kong Institute of Surveyors. He is a Registered Professional Surveyor (General Practice), a fellow of Royal Institution of Chartered Surveyors, a fellow of the Hong Kong Institute of Surveyors and a fellow of the Hong Kong Institute of Real Estate Administration. He has over 25 years of valuation experience in Hong Kong, the PRC and Asia Pacific Region.

—IV-3— APPENDIX IV PROPERTY VALUATION

SUMMARY OF VALUES

Capital Value Capital Value in Interests attributable to the existing state as at attributable to the Group as at Property Interests April 30, 2007 Group April 30, 2007 (RMB) (RMB)

Group I — Property interests held by the Group for occupation in the PRC

1. An office building, a workshop building, a 173,000,000 100% 173,000,000 warehouse, two guard rooms, four staff quarters buildings and two ancillary buildings located at Dongshan Industrial Zone, Chidian Town, Jinjiang City, Fujian Province, the People’s Republic of China

2. Room 804, 800,000 100% 800,000 Block No. 2 of Huamei Court, Huaqiao Cheng, Xili Road, Shiqiao Street, Panyu District, Guangzhou City, Guangdong Province, the People’s Republic of China

3. An office building, four workshops, 51,500,000 100% 51,500,000 two staff quarters buildings and an ancillary building located at Phase 1 of Tengfei Economic Development Zone, Changting County, Fujian Province, the People’s Republic of China

Group I Sub-total: 225,300,000

—IV-4— APPENDIX IV PROPERTY VALUATION

Capital Value attributable to the Group as at Property Interests April 30, 2007 (RMB)

GroupII—PropertyinterestsrentedbytheGroupinthePRC

4. Levels1and2ofNo.8ZengCuoAn, No commercial value Siming District, Xiamen City, Fujian Province, the People’s Republic of China

5. Blocks A, B, C and D on Level 25 of No commercial value Shentong Information Plaza located at No. 55 Huaihai West Road, Xuhui District, Shanghai City, the People’s Republic of China

6. Room 222 on Level 2 of North Business Building No commercial value located at No. 551 Gaoke West Road, Shanghai City, the People’s Republic of China

7. An industrial building, a staff quarters building, No commercial value an office building and a guard house located at Andou Industrial Zone, Chendai Town, Jinjiang City, Fujian Province, the People’s Republic of China

8. Two factories and other ancillary buildings No commercial value located at Wuli Industrial Zone, Anhai Town, Jinjiang City, Fujian Province, the People’s Republic of China

9. Room 401, No commercial value Block11ofFangliLane, Liuyun Er Street, Tianhe District, Guangzhou City, Guangdong Province, the People’s Republic of China

—IV-5— APPENDIX IV PROPERTY VALUATION

Capital Value attributable to the Group as at Property Interests April 30, 2007 (RMB)

10. Room 603, No commercial value Block2ofNorthChengYongYaCourt, No. 238 Guangming North Road, Shiqiao Town, Panyu District, Guangzhou City, Guangdong Province, the People’s Republic of China

11. Room 604, No commercial value Block3ofNorthChengYongYaCourt, No. 238 Guangming North Road, Shiqiao Town, Panyu District, Guangzhou City, Guangdong Province, the People’s Republic of China

12. A residential unit located at No commercial value No. 9 Yunxing Baisha Bao Village Avenue, Shiqiao Town, Panyu District, Guangzhou City, Guangdong Province, the People’s Republic of China

13. Three retail shops located on Level 1 of No commercial value District F of Anxin Commercial Plaza, No. 1255 Mudanjiang Road, Baoshan District, Shanghai City, the People’s Republic of China

14. Room B601, No commercial value No. 122 Huanghe Road, Nangang District, Harbin City, Heilongjiang Province, the People’s Republic of China

—IV-6— APPENDIX IV PROPERTY VALUATION

Capital Value attributable to the Group as at Property Interests April 30, 2007 (RMB)

15. Room 1206, No commercial value No. 105 Tiyu West Road, Tianhe District, Guangzhou City, Guangdong Province, the People’s Republic of China

16. A residential unit on fifth floor of No commercial value No. 242 Guangming North Road, Shiqiao Town, Panyu District, Guangzhou City, Guangdong Province, the People’s Republic of China

17. An office building located at No commercial value No. 7620 Sanlu Road, Pudong New District, Shanghai City, the People’s Republic of China

18. A retail shop located at second floor of No commercial value Commodity Street, No. 1618 Huangxing Road, Yangpu District, Shanghai City, the People’s Republic of China

19. An unit located at No. 25 Yongfu Street, No commercial value Shi Road, Suzhou City, Jiangsu Province, the People’s Republic of China

20. Room 1708, No commercial value No. 555 Renmin Zhong Road, Liwan District, Guangzhou City, Guangdong Province, the People’s Republic of China

—IV-7— APPENDIX IV PROPERTY VALUATION

Capital Value attributable to the Group as at Property Interests April 30, 2007 (RMB)

21. Room 0301 of Block L, No commercial value No. 88 Jianguo Road, Chaoyang District, Beijing City, the People’s Republic of China

22. Room A03 on the fourth floor of No commercial value Taishang Hui Guan Building, No. 860 Xianyue Road, Xiamen City, Fujian Province, the People’s Republic of China

Group II Sub-total: No commercial value

Group III — Property interests rented by the Group in Hong Kong

23. Unit No. 4408 on the 44th floor of High Block, No commercial value Grand Millennium Plaza, 183 Queen’s Road, Central, Hong Kong

Group III Sub-total: No commercial value

Group IV — Property interests to be acquired by the Group in the PRC

24. A factory building located at No. 55 No commercial value Tongan Industrial Centralized Zone, (Note 1) Phase 1 of Siming Yuan, Xiamen City, Fujian Province, the People’s Republic of China

Group IV Sub-total: No commercial value

Grand total: 225,300,000

Note 1: In the course of our valuation, we have ascribed no commercial value to the property. Pursuant to the State-Owned Land Use Rights Grant Contract dated April 30, 2006 entered into between the Xiamen City State-owned Land Resources Bureau Tong An Sub-bureau and ANTA Xiamen and Xiamen City Quanhe Development Co., Ltd. ( ) and pursuant to the Xiamen City Tong An Industrial Ji Zhong District (Si Ming Yuan) General Factory Construction Commission Contract ( ) dated April 30, 2006, entered into between ANTA Xiamen and Xiamen City Quanhe Development Co., Ltd. ( ), a proposed factory with a gross floor area of approximately 14,145.44 square meters erected on the site area of 6,791.43 square meters will be transferred to the Group. As advised by the Group, the consideration of the land premium and the construction cost has been paid in full.

—IV-8— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Group I — Property interests held by the Group for occupation in the PRC

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

1. An office building, a workshop The property comprises a 12-storey An office with a gross floor 173,000,000 building, a warehouse, two guard office building, a 4-storey area of 194 square meters and (100% interests rooms, four staff quarters workshop building, a single-storey 3 staff quarters with a total attributable to the buildings and two ancillary warehouse, two single-storey guard gross floor area of 100 square Group: buildings located at Dongshan rooms, four 7-storey staff quarters meters were tenanted to RMB173,000,000) Industrial Zone, buildings and two ancillary Industrial and Commercial Chidian Town, buildings with a total gross floor Bank of China Holding Jinjiang City, area of approximately 127,937.17 Company Limited, Jinjiang Fujian Province, square meters. Sub-branch at a total annual the People’s Republic of China rent of RMB199,900 for a The property was completed in term from May 12, 2006 to about March 2007. May 11, 2011.

The property occupies a site with An office with a gross floor an area of approximately 108,880.5 area of 2,394 square meters square meters. was tenanted to Jinjiang City Ruidong Trading The property is held under various Company Limited State-owned Land Use Rights ( ) Certificates with the terms expiring at an annual rent of between November 5, 2051 and RMB90,000 for a term from April 19, 2055 for industrial use. December 1, 2006 to November 30, 2011.

The remaining portion of the property is currently occupied by the Group.

Notes:

(i) Pursuant to the following State-owned Land Use Rights Certificates, the land use rights of the property, which have various land use terms with the latest expiry on April 19, 2055 for industrial use, have been granted to the Group.

State-owned Land Use Rights Certificate No. Date of Issuance Subject Site Area User Grantor (sq.m.)

(2003) Zi No. 00958 July 24, 2003 16,800 Industrial People’s Government of Jinjiang City (2003) Zi No. 00959 July 24, 2003 21,906 Industrial People’s Government of Jinjiang City (2006) Zi No. 01046 July 20, 2006 2,864 Industrial People’s Government of Jinjiang City (2005) Zi No. 01132 August 1, 2005 67,310.5 Industrial People’s Government of Jinjiang City

Total Site Area: 108,880.5

—IV-9— APPENDIX IV PROPERTY VALUATION

(ii) Pursuant to the Building Ownership Certificate No. Jin Fang Quan Zheng Chi Dian Zi 08-200102-001 ( ) dated February 13, 2007 issued by Jinjiang City Planning Construction and Property Management Bureau ( ), the building ownership of the property with a total gross floor area of approximately 88,531.81 square meters have been granted to the Group.

(iii) Pursuant to the Building Ownership Certificate No. Jin Fang Quan Zheng Chi Dian Zi 08-200178 ( ) dated March 31, 2007 issued by Jinjiang City Planning Construction and Property Management Bureau ( ), the building ownership of the property with a total gross floor area of approximately 39,405.36 square meters have been granted to the Group.

(iv) We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). The Group has obtained the land use rights and building ownership of the property and has rights to occupy, use, transfer, lease and mortgage the property.

(b). ANTA China, the owner of the property, is a limited liability company established in accordance with the laws of the PRC, in which the Group has a 100% equity interests.

—IV-10— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

2. Room 804, The property comprises a The property is currently 800,000 Block No. 2 of Huamei Court, residential unit in a 9-storey occupied by the Group as a (100% interests Huaqiao Cheng, residential building with a gross staff quarters. attributable to the Xili Road, floor area of approximately 368.8 Group: Shiqiao Street, square meters. RMB800,000) Panyu District, Guangzhou City, The property was completed in Guangdong Province, about 2000. the People’s Republic of China The property is held under a Realty Title Certificate with a land use term expiring on June 8, 2063 for commercial/residential use.

Notes:

(i) Pursuant to the Realty Title Certificate No. Yue Fang Di Zheng Zi C4193808 ( ) dated April 13, 2006 issued by People’s Government of Guangdong Province ( ), the ownership rights of the property with a gross floor area of 368.8 square meters have been granted to the Group for a term expiring on June 8, 2063 for commercial/residential use.

(ii) We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). The Group has obtained the land use rights and building ownership of the property and has the rights to occupy, use, transfer, lease and mortgage the property.

(b). ANTA China, the owner of the property, in which the Group has a 100% equity interests is a limited liability company established in accordance with the laws of the PRC.

—IV-11— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

3. An office building, four The property comprise a 2-storey The property is currently 51,500,000 workshops, two staff quarters office building, four 3-storey occupied by the Group as (100% interests buildings and an ancillary building workshop buildings, two 6-storey factory, office and staff attributable to the located at Phase 1 of Tengfei staff quarters buildings and a 2- quarters. Group: Economic Development Zone, storey ancillary building with a RMB51,500,000) Changting County, total gross floor area of Fujian Province, approximately 44,516.28 square the People’s Republic of China meters.

The property was completed in about April 2007.

The property occupying a site with an area of approximately 43,290 square meters.

The property is held under a State- owned Land Use Rights Certificate for a term expiring on April 30, 2056 for industrial use.

Notes:

(i) Pursuant to the State-owned Land Use Rights Certificate No. Ting Guo Yong (2006) No. 0403 ( ) dated June 5, 2006 issued by Fujian Province Changting County State-owned Land Resources Bureau ( ), the land use rights of the site, in which the property is located therein, with a site area of 43,290 square meters for a term expiring on April 30, 2056 for industrial use have been granted to the Group.

(ii) Pursuant to two Building Ownership Certificates No. Ting Jian Fang Quan Zheng Cheng Zi 200700323 ( ) and No. Ting Jian Fang Quan Zheng Cheng Zi 200700324 ( ) dated 13 April 2007 issued by Fujian Province Changting County Town Planning and Construction Bureau ( ), the building ownership of the property with a total gross floor area of approximately 44,516.28 square meters have been granted to the Group.

(iii) We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). The Group has obtained the land use rights and building ownership of the property and has rights to occupy, use, transfer, lease and mortgage the property.

(b). ANTA Changting, the owner of the property, is a limited liability company established in accordance with the laws of the PRC, in which the Group has a 100% equity interests.

—IV-12— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

GroupII—PropertyinterestsrentedbytheGroupinthePRC

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

4. Levels1and2ofNo.8ZengCuo The property comprises two office The property is currently No commercial value An, units on Levels 1 and 2 of a 3- occupied by the Group as Siming District, storey building with a total gross offices. Xiamen City, floor area of approximately 145 Fujian Province, square meters. the People’s Republic of China The property was completed in about 1986.

ThepropertyisleasedtoXiamen Investment and Xiamen Trading for a term of 2.5 years and 2 years from April 28, 2006 and February 10, 2007 respectively, at nil consideration.

Notes:

(i) Pursuant to the Building Ownership Certificate No. 03-005-01-90069 dated May 20, 2001 issued by Xiamen Municipal Land & Housing Administration Bureau ( ), the building ownership of the property with a gross floor area of approximately 145 square meters have been granted to Xiamen City Siming District People’s Government, Bin Hai Jie Dao Office ( ) (the ‘‘Owner’’).

(ii) Pursuant to two Operating Property Use Agreements for No Consideration ( ) (the ‘‘Agreements’’) dated April 28, 2006 and February 24, 2007 entered into between Xiamen Investment, Xiamen Trading and the Owner, the property with a total gross floor area of approximately 145 square meters has been contracted to be used by Xiamen Investment and Xiamen Trading.

(iii) We were advised that the Owner is an independent third party from the Group.

(iv) We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to the Building Ownership Certificate No. 03-005-01-90069, the building ownership of the property with a gross floor area of approximately 145 square meters has been granted to the Owner.

(b). Pursuant to two Operating Property Use Agreements for No Consideration ( )(the ‘‘Agreements’’) entered into between the Owner, Xiamen Investment and Xiamen Trading, the Owner agreed Xiamen Investment and Xiamen Trading to use the property for a term of 2.5 years and 2 years from April 28, 2006 and February 10, 2007 respectively, at nil consideration.

(c). The Agreements are legal, valid and legally binding on both parties.

(d). The Owner has the right to lease the property.

(e). The Group can legally use the property.

—IV-13— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

5. Blocks A, B, C and D on Level 25 The property comprises an office The property is currently No commercial value of Shentong Information Plaza with a gross floor area of occupied by the Group as an located at No. 55 Huaihai West approximately 555.07 square office. Road, meters on Level 25 of a 28-storey Xuhui District, building. Shanghai City, the People’s Republic of China The property was completed in about 1998.

The property is leased to Shanghai Fengxian for a term of 1 year and 16 days from December 16, 2006 at a monthly rental of RMB70,910 excluding management fee.

Notes:

(i) Pursuant to the Realty Title Certificate No. Hu Fang Di Shi Zi (2000) 100159 ( ) dated October 12, 2000 issued by Shanghai Municipal Housing and Land Administration Bureau ( ), the ownership rights of a building, where the property is located therein, with a gross floor area of approximately 29,989.32 square meters have been granted to Shanghai Shentong Property Development Company Limited ( ) (the ‘‘Owner’’).

(ii) Pursuant to a Shanghai City Property Tenancy Agreement dated September 30, 2006 entered into between Shanghai Fengxian ( ) and the Owner, the property with a gross floor area of approximately 555.07 square meters has been leased to Shanghai Fengxian.

(iii) We were advised that the Owner is an independent third party from the Group.

(iv) We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to the Realty Title Certificate No. Hu Fang Di Shi Zi (2000) 100159 ( ), the ownership rights of a building, where the property is located therein, with a gross floor area of approximately 29,989.32 square meters have been granted to the Owner.

(b). Pursuant to a Shanghai City Property Tenancy Agreement (the ‘‘Tenancy Agreement’’) dated September 30, 2006 entered into between the Owner and Shanghai Fengxian, the Owner leased the property with a gross floor area of approximately 555.07 square meters to Shanghai Fengxian for a term of 1 year and 16 days commencing on December 16, 2006 at a monthly rental of RMB70,910 excluding management fee.

(c). The Tenancy Agreement is legal, valid and legally binding on the both parties.

(d). The Tenancy Agreement was registered on January 22, 2007 in the Shanghai Municipal Real Estate Registration Office ( ).

(e). The Owner has the right to lease the property.

—IV-14— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

6. Room 222 on Level 2 of North The property comprises an office The property is currently No commercial value Business Building located at No. unit with a gross floor area of occupied by the Group as an 551 Gaoke West Road, approximately 21 square meters. office. Shanghai City, the People’s Republic of China The property was completed in about 1995.

The property is leased to Shanghai Fengxian for a term of 2 years from September 27, 2006 to September 26, 2008 with an annual rental of RMB19,692 excluding management fee.

Notes:

(i) Pursuant to the Realty Title Certificate No. Hu Fang Di Shi Zi 29202 ( ) dated August 31, 1995 issued by Shanghai City Land and Building Management Bureau, the ownership rights of a building, where the property is located therein, with a gross floor area of approximately 16,930.9 square meters have been granted to Shanghai Electricity Real Estate Company Limited (the ‘‘Owner’’).

(ii) Pursuant to the Certificate dated August 22, 2006, Shanghai Pu Zhou Investment Management Center (the ‘‘Tenant’’) has rented the property from the Owner.

(iii) Pursuant to a tenancy agreement dated September 27, 2006 entered into between Shanghai Fangxian ( ) and the Tenant, the property with a gross floor area of approximately 21 square meters has been sub-leased to Shanghai Fengxian.

(iv) We were advised that the Owner and the tenant are independent third parties from the Group.

(v) We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to the Realty Title Certificate No. Hu Fang Di Shi Zi 29202 ( ), the ownership rights of a building, where the property is located therein, with a gross floor area of approximately 16,930.9 square meters have been granted to the Owner.

(b). Pursuant to a tenancy agreement dated September 27, 2006 (the ‘‘Tenancy Agreement’’) between the Tenant and Shanghai Fengxian (the ‘‘Sub-tenant’’), the Tenant leased the property with a gross floor area of 21 square meters to the Sub-tenant for a term of 2 years from September 27, 2006 to September 26, 2008 at an annual rental of RMB19,692 excluding management fee.

(c). The Tenancy Agreement is legal, valid and legally binding on the both parties.

(d). The Tenancy Agreement was registered on March 16, 2007 in the Shanghai Municipal Real Estate Registration Office ( ).

(e). The Owner has the right to lease the property.

(f). The Group can legally use the property.

—IV-15— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

7. An industrial building, a staff The property comprises a 5-storey The property is currently No commercial value quarters building, an office industrial building, a 6-storey staff occupied by the Group as building and a guard house located quarters building, a 6-storey office factory, office, and staff at Andou Industrial Zone, building and a single storey guard quarters. Chendai Town, house with a total gross floor area Jinjiang City, of approximately 11,695.42 square Fujian Province, meters erected on a site with an the People’s Republic of China area of approximately 3,012 square meters (the ‘‘Site’’).

The property was completed in about 1999.

ThepropertyisleasedtoANTA China for a term of 3 years from May 3, 2007 at an annual rental of RMB701,725.2 excluding management fee.

Notes:

(i) Pursuant to the State-owned Land Use Rights Certificate No. Jin Guo Yong (2007) 00639 ( )dated April 18, 2007 issued by the Jinjiang City People’s Government, the land use rights of a site, which forms part of the Site, with a site area of 1,515 square meters for a land use term expiring on April 10, 2057 for industrial use have been granted to Jinjiang Shifa.

(ii) Pursuant to the State-owned Land Use Rights Certificate No. Jin Guo Yong (2007) 00662 ( )dated April 27, 2007 issued by the Jinjiang City People’s Government, the land use rights of a site, which forms part of the Site, with a site area of 1,497 square meters for a land use term expiring on March 31, 2057 for industrial use have been granted to Jinjiang Shifa.

(iii) Pursuant to the Building Ownership Certificate No. Jin Fang Quan Zheng Cheng Dai Zi 06-200520-001 ( ) dated April 30, 2007 issued by Jinjiang City Planning Construction and Building Bureau ( ), the building ownership of the property with a gross floor area of approximately 11,695.42 square meters have been granted to Jinjiang Shifa (the ‘‘Owner’’).

(iv) Pursuant to a factory tenancy agreement dated May 3, 2007 entered into between Jinjiang Shifa and ANTA China, the property with a total gross floor area of 11,695.42 square meters have been leased to the Group.

(v) We were advised that Jinjiang Shifa is a connected person of the Group.

(vi) We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to two State-owned Land Use Rights Certificates Nos. Jin Guo Yong (2007) 00639 ( ) and Jin Guo Yong (2007) 00662 ( ) and a Building Ownership Certificate No. Jin Fang Quan Zheng Cheng Dai Zi 06-200520-001 ( ), the land use rights and building ownership of the property with a gross floor area of approximately 11,695.42 square meters have been granted to the Owner.

—IV-16— APPENDIX IV PROPERTY VALUATION

(b). Pursuant to a factory tenancy agreement (the ‘‘Tenancy Agreement’’) dated May 3, 2007 entered into between ANTA China and the Owner, the Owner leased the property with a total gross floor area of approximately 11,695.42 square meters to ANTA China for a term of 3 years from May 3, 2007 at an annual rental of RMB701,725.2 excluding management fee.

(c). The Tenancy Agreement is legal, valid and legally binding on both parties.

(d). The Tenancy Agreement has not been registered. However, it is no legal impediment for the Group to rent the property.

(e). The Owner has the right to lease the property.

(f). The Group can legally use the property.

—IV-17— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

8. Two factories and other ancillary The property comprises two single- The property is currently No commercial value buildings located at Wuli Industrial storey factory buildings and other occupied by the Group as Zone, Anhai Town, ancillary buildings with a gross production plants. Jinjiang City, floor area of approximately 11,405 Fujian Province, square meters and 310 square the People’s Republic of China meters respectively, the said buildings are erected on a site with an area of approximately 52,396 square meters.

The property was completed in about 2006.

ThepropertyisleasedtoANTA China for a term of 3 years from February 2, 2007 to February 1, 2010 at an annual rental of RMB843,480 excluding management fee.

Notes:

(i) Pursuant to the State-owned Land Use Rights Certificate No. Jin Guo Yong (2007) 00547 ( )dated March 21, 2007 issued by People’s Government of Jinjiang City ( ), the land use rights of a site, in which the property is located therein, with a site area of 52,396 square meters for a land use term expiring on November 28, 2055 for industrial use have been granted to Fujian Light Industrial.

(ii) Pursuant to the Building Ownership Certificate No. Jin Fang Quan Zheng Ling Yuan Zi 18 – 20064 ( ) dated March 31, 2007, the building ownership of several buildings, where the property is located therein, with a gross floor area of approximately 37,071.2 square meters have been granted to Fujian Light Industrial (the ‘‘Owner’’).

(iii) Pursuant to a tenancy agreement dated February 2, 2007 entered into between ANTA China and Fujian Light Industrial (the ‘‘Owner’’), the property with a total gross floor area of approximately 11,715 square meters hasbeenleasedto ANTA China.

(iv) We were advised that the Owner is a connected party of the Group.

(v) We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to the State-owned Land Use Rights Certificate No. Jin Guo Yong (2007) 00547 ( ) and the Building Ownership Certificate No. Jin Fang Quan Zheng Ling Yuan Zi 18-20064 ( ), the land use rights and building ownership of several buildings, where the property is located therein, with a gross floor area of approximately 37,071.2 square meters have been granted to the Owner.

(b). Pursuant to a tenancy agreement (the ‘‘Tenancy Agreement’’) dated February 2, 2007 entered into between ANTA China and the Owner, the Owner leased the property with a gross floor area of approximately 11,715 square meters to ANTA China for a term of 3 years from February 2, 2007 to February 1, 2010 at an annual rental of RMB843,480 excluding arrangement fee.

(c). The Tenancy Agreement is legal, valid and legally binding on both parties.

—IV-18— APPENDIX IV PROPERTY VALUATION

(d). The Tenancy Agreement has not been registered. However, it is no legal impediment for the Group to rent the property.

(e). The Owner has the right to lease the property.

(f). The Group can legally use the property.

—IV-19— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

9. Room 401, The property comprises a The property is currently No commercial value Block 11 of Fangli Lane, residential unit in a 8-storey occupied by the Group as Liuyun Er Street, building with a gross floor area of staff quarters. Tianhe District, approximately 96.82 square meters. Guangzhou City, Guangdong Province, The property was completed in the People’s Republic of China about 1989.

ThepropertyisleasedtoANTA China for a term of 1 year from December 22, 2006 at a monthly rental of RMB3,000 excluding management fee.

Notes:

(i) Pursuant to the Realty Title Certificate No. Sui Fang Di Zheng Zi 258616 ( ) dated January 29, 1996 issued by People’s Government of Guangdong Province ( ), the ownership rights of the property with a gross floor area of approximately 96.82 square meters have been granted to Zhang Shu Guang (the ‘‘Owner’’).

(ii) Pursuant to a property tenancy agreement dated December 21, 2006 entered into between ANTA China and the Owner, a residential unit with a gross floor area of approximately 96.82 square meters has been leased to ANTA China.

(iii) We were advised that the Owner is an independent third party from the Group.

(iv) We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to the Realty Title Certificate No. Sui Fang Di Zheng Zi 258616 ( ), the ownership rights of the property with a gross floor area of approximately 96.82 square meters have been granted to the Owner.

(b). Pursuant to a property tenancy agreement (the ‘‘Tenancy Agreement’’) dated December 21, 2006 entered into between the Owner and ANTA China, the Owner leased the property with a gross floor area of approximately 96.82 square meters to ANTA China for a term of 1 year from December 22, 2006 at a monthly rental of RMB3,000 excluding management fee.

(c). The Tenancy Agreement is legal, valid and legally binding on both parties.

(d). The Tenancy Agreement was registered on December 21, 2006 in the relevant government authority.

(e). The Owner has the right to lease the property.

(f). The Group can legally use the property.

—IV-20— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

10. Room 603, The property comprises a The property is currently No commercial value Block 2 of North Cheng Yong Ya residential unit in a 8-storey occupied by the Group as Court, building with a gross floor area of staff quarters. No. 238 Guangming North Road, approximately 109.7 square meters. Shiqiao Town, Panyu District, The property was completed in Guangzhou City, about 2003. Guangdong Province, the People’s Republic of China ThepropertyisleasedtoANTA China for a term from December 4, 2006 to June 4, 2007 at a monthly rental of RMB1,700 excluding management fee.

Notes:

(i) Pursuant to the Realty Title Certificate No. Yue Fang Di Zheng Zi C1311407 ( ) issued by People’s Government of Guangdong Province ( ), the ownership rights of the property with a gross floor area of approximately 109.7 square meters have been granted toWangChen(the‘‘Owner’’).

(ii) Pursuant to a property tenancy agreement dated December 8, 2006 between ANTA China and the Owner, a residential unit with a gross floor area of approximately 109.7 square meters has beenleasedtoANTAChina.

(iii) We were advised that the Owner is an independent third party from the Group.

(iv) We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to a Realty Title Certificate Yue Fang Di Zheng Zi No. C1311407 ( ), the ownership rights of the property with a gross floor area of 109.7 square meters have been granted to the Owner.

(b). Pursuant to a property tenancy agreement (the ‘‘Tenancy Agreement’’) dated December 8, 2006 entered into between the Owner and ANTA China, the Owner leased the property with a gross floor area of approximately 109.7 square meters to ANTA China for a term from December 4, 2006 to June 4, 2007 at a monthly rental of RMB1,700 excluding management fee.

(c). The Tenancy Agreement is legal, valid and legally binding on both parties.

(d). The Tenancy Agreement was registered on December 26, 2006 in the relevant government authority.

(e). The Owner has the right to lease the property.

(f). The Group can legally use the property.

—IV-21— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

11. Room 604, The property comprises a The property is currently No commercial value Block 3 of North Cheng Yong Ya residential unit in a 8-storey occupied by the Group as Court, building with a gross floor area of staff quarters. No. 238 Guangming North Road, approximately 97.1 square meters. Shiqiao Town, Panyu District, The property was completed in Guangzhou City, about 2003. Guangdong Province, the People’s Republic of China ThepropertyisleasedtoANTA China for a term from December 11, 2006 to May 10, 2007 at a monthly rental of RMB1,600 excluding management fee.

Notes:

(i) Pursuant to the Realty Title Certificate No. Yue Fang Di Zheng Zi C3035114 ( ) issued by People’s Government of Guangdong Province ( ), the ownership rights of the property with a gross floor area of approximately 97.1 square meters have been granted to Guan Zi Guang (the ‘‘Owner’’).

(ii) Pursuant to a property tenancy agreement dated November 28, 2006 entered into between ANTA China and the Owner, a residential unit with a gross floor area of approximately 97.1 square meters has been leased to ANTA China.

(iii) We were advised that the Owner is an independent third party from the Group.

(iv) We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to the Realty Title Certificate No. Yue Fang Di Zheng Zi C3035114 ( ), the ownership rights of the property with a gross floor area of approximately 97.1 square meters have been granted to the Owner.

(b). Pursuant to a property tenancy agreement (the ‘‘Tenancy Agreement’’) dated November 28, 2006 entered into between the Owner and ANTA China, the Owner leased the property with a gross floor area of approximately 97.1 square meters to ANTA China for a term from December 11, 2006 to May 10, 2007 at a monthly rental of RMB1,600 excluding management fee.

(c). The Tenancy Agreement is legal, valid and legally binding on both parties.

(d). The Tenancy Agreement was registered on January 15, 2007 in the relevant government authority.

(e). The Owner has the right to lease the property.

(f). The Group can legally use the property.

—IV-22— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

12. A residential unit located at The property comprises a The property is currently No commercial value No. 9 Yunxing Baisha Bao residential unit in a 6-storey occupied by the Group as Village Avenue, building with a gross floor area of staff quarters. Shiqiao Town, approximately 283.9 square meters. Panyu District, Guangzhou City, The property was completed in Guangdong Province, about 2005. the People’s Republic of China ThepropertyisleasedtoANTA China for a term from January 1, 2007 to January 30, 2009 at a monthly rental of RMB4,000 excluding management fee.

Notes:

(i) Pursuant to the Realty Title Certificate No. Yue Fang Di Zheng Zi C0996157 ( )issuedby People’s Government of Guangdong Province ( ), the ownership rights of the property with a gross floor area of approximately 283.9 square meters have been granted to Zeng Zhao Tong (the ‘‘Owner’’).

(ii) Pursuant to a property tenancy agreement dated December 26, 2006 entered into between ANTA China and the Owner, a residential unit with a gross floor area of approximately 283.9 square meters has been leased to ANTA China.

(iii) We were advised that the Owner is an independent third party from the Group.

(iv) We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to the Realty Title Certificate No. Yue Fang Di Zheng Zi C0996157 ( ), the ownership rights of the property with a gross floor area of approximately 283.9 square meters have been granted to the Owner.

(b). Pursuant to a property tenancy agreement (the ‘‘Tenancy Agreement’’) dated December 26, 2006 entered into between the Owner and ANTA China, the Owner leased the property with a gross floor area of approximately 283.9 square meters to ANTA China for a term from January 1, 2007 to January 30, 2009 at a monthly rental of RMB4,000 excluding management fee.

(c). The Tenancy Agreement is legal, valid and legally binding on both parties.

(d). The Tenancy Agreement was registered on January 11, 2007 in the relevant government authority.

(e). The Owner has the right to lease the property.

(f). The Group can legally use the property.

—IV-23— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

13. Three retail shops located on Level The property comprises three retail The property is currently No commercial value 1 of District F of shopsinaretailcomplexwitha occupied by the Group as Anxin Commercial Plaza, total gross floor area of retail shops. No. 1255 Mudanjiang Road, approximately 739.97 square Baoshan District, meters. Shanghai City, the People’s Republic of China The property was completed in about 2006.

The property is leased to Shanghai Fengxian for a term of 2 years commencing between December 22, 2006 and March 9, 2007 at a total monthly rental of RMB77,555 excluding management fee.

Notes:

(i) Pursuant to the Realty Title Certificate No. Hu Fang Di Bao Zi (2006) 038016 ( ) issued by Shanghai Municipal Housing and Land Resource Administration Bureau ( ), the ownership rights of a building, where the property is located therein, with a gross floor area of approximately 12,889.03 square meters have been granted to Shanghai Anxin Mudanjiang Zhidi Company Limited (the ‘‘Owner’’).

(ii) Pursuant to three property tenancy agreements entered into between Shanghai Fengxian and the Owner, three retail shops with a total gross floor area of approximately 739.97 square meters has been leased to Shanghai Fengxian.

(iii) We were advised that the Owner is an independent third party from the Group.

(iv) We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to the Realty Title Certificate No. Hu Fang Di Bao Zi (2006) 038016 ( ), the ownership rights of the property with a gross floor area of approximately 12,889.03 square meters have been grantedtotheOwner.

(b). Pursuant to three property tenancy agreements (the ‘‘Tenancy Agreements’’) dated December 18, 2006, January 10, 2007 and February 1, 2007 entered into between the Owner and Shanghai Fengxian, the Owner leased the property with a total gross floor area of approximately 739.97 square meters to Shanghai Fengxian for a term of 2 years commencing between December 22, 2006 and March 9, 2007 at a total monthly rental of RMB77,555 excluding management fee.

(c). The Tenancy Agreements are legal, valid and legally binding on both parties.

(d). The Owner has not submitted the Tenancy Agreements to the relevant PRC government administrative department for registration but this will not affect Shanghai Fengxian to use the property.

(e). The Owner has the right to lease the property.

(f). The Group can legally use the property.

—IV-24— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

14. Room B601, The property comprises an office The property is currently No commercial value No. 122 Huanghe Road, unit with a gross floor area of occupied by the Group as an Nangang District, approximately 55 square meters. office. Harbin City, Heilongjiang Province, The property was completed in the People’s Republic of China about 1994.

ThepropertyisleasedtoHarbin Fengxian for a term from December 1, 2006 to August 31, 2007 at a monthly rental of RMB15,056 excluding management fee.

Notes:

(i) Pursuant to the Building Ownership Certificate No. Ha Fang Quan Zheng Kai Guo Zi 00076796 ( ) issued by Harbin Real Estate Dwelling House Bureau, the building ownership of a building, where the property is located therein, with a gross floor area of approximately 5,780.86 square meters have been granted to Heilongjiang Province Industrial and Commercial Administration Bureau (the ‘‘Owner’’).

(ii) Pursuant to a property tenancy agreement dated December 1, 2006 entered into between Harbin Fengxian and the Owner, an office unit with a gross floor area of approximately 55 square meters has been leased to Harbin Fengxian.

(iii) We were advised that the Owner is an independent third party from the Group.

(iv) We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to the Building Ownership Certificate No. Ha Fang Quan Zheng Kai Guo Zi 00076796 ( ), the building ownership of the property with a gross floor area of approximately 5,780.86 square meters have been granted to the Owner.

(b). Pursuant to a property tenancy agreement (the ‘‘Tenancy Agreement’’) dated December 1, 2006 entered into between the Owner and Harbin Fengxian, the Owner leased the property with a gross floor area of approximately 55 square meters to Harbin Fengxian for a term from December 1, 2006 to August 31, 2007 at a monthly rental of RMB15,056 excluding management fee.

(c). The Tenancy Agreement is legal, valid and legally binding on both parties.

(d). The Tenancy Agreement was registered in the relevant government authority.

(e). The Owner has the right to lease the property.

(f). The Group can legally use the property.

—IV-25— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

15. Room 1206, The property comprises a The property is currently No commercial value No. 105 Tiyu West Road, residential unit in a 29-storey occupied by the Group as Tianhe District, building with a gross floor area of staff quarters. Guangzhou City, approximately 65 square meters. Guangdong Province, the People’s Republic of China The property was completed in about 2002.

ThepropertyisleasedtoANTA China for a term from January 10, 2007 to July 9, 2008 at a monthly rental of RMB3,500 excluding management fee.

Notes:

(i). Pursuant to the Realty Title Certificate No. Yue Fang Di Zheng Zi C4568205 ( ) issued by People’s Government of Guangdong Province ( ), the ownership rights of the property with a gross floor area of approximately 65 square meters have been granted to Pan Ting (the ‘‘Owner’’).

(ii). Pursuant to a property tenancy agreement dated January 7, 2007 entered into between ANTA China and the Owner, a residential unit with a gross floor area of approximately 65 square meters has been leased to ANTA China.

(iii). We were advised that the Owner is an independent third party from the Group.

(iv). We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to the Realty Title Certificate No. Yue Fang Di Zheng Zi C4568205 ( ), the ownership rights of the property with a gross floor area of approximately 65 square meters have been granted to the Owner.

(b). Pursuant to a property tenancy agreement (the ‘‘Tenancy Agreement’’) dated January 7, 2007 entered into between the Owner and ANTA China, the Owner leased the property with a gross floor area of approximately 65 square meters to ANTA China for a term from January 10, 2007 to July 9, 2008 at a monthly rental of RMB3,500 excluding management fee.

(c). The Tenancy Agreement is legal, valid and legally binding on the both parties.

(d). The Tenancy Agreement was registered on February 5, 2007 in the relevant government authority.

(e). The Owner has the right to lease the property.

(f). The Group can legally use the property.

—IV-26— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

16. A residential unit on fifth floor of The property comprises a The property is currently No commercial value No. 242 Guangming North Road, residential unit on a 12-storey occupied by the Group as Shiqiao Town, building with a gross floor area of staff quarters. Panyu District, approximately 392.3 square meters. Guangzhou City, Guangdong Province, The property was completed in the People’s Republic of China about 2003.

ThepropertyisleasedtoANTA China for a term of 3 years from December 30, 2006 at a monthly rental of RMB13,000 excluding management fee.

Notes:

(i). Pursuant to the Realty Title Certificate No. Yue Fang Di Zheng Zi C2685995 ( ) issued by People’s Government of Guangdong Province ( ), the ownership rights of the property with a gross floor area of approximately 392.3 square metershavebeengrantedtoWangJianYuan( ) (the ‘‘Owner’’).

(ii). Pursuant to a property tenancy agreement dated January 8, 2007 entered into between ANTA China and the Owner, a residential unit with a gross floor area of approximately 392.3 square meters has been leased to ANTA China .

(iii). We were advised that the Owner is an independent third party from the Group.

(iv). We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to the Realty Title Certificate No. Yue Fang Di Zheng Zi C2685995 ( ), the ownership rights of the property with a gross floor area of approximately 392.3 square meters have been granted to the Owner.

(b). Pursuant to a property tenancy agreement (the ‘‘Tenany Agreement’’) dated January 8, 2007 entered into between the Owner and ANTA China, the Owner leased the property with a gross floor area of 392.3 square meters to ANTA China for a term of 3 years from December 30, 2006 at a monthly rental of RMB13,000 excluding management fee.

(c). The Tenancy Agreement is legal, valid and legally binding on the both parties.

(d). The Tenancy Agreement was registered in the relevant government authority.

(e). The Owner has the right to lease the property.

(f). The Group can legally use the property.

—IV-27— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

17. An office building located at The property comprises a 2-storey The property is currently No commercial value No. 7620 Sanlu Road, office building with a total gross occupied by the Group as Pudong New District, floor area of approximately offices. Shanghai City, 1,763.11 square meters. the People’s Republic of China The property was completed in about 2005.

Thepropertyisleasedtothe Shanghai Fengxian for a term of 5 years from January 15, 2007 at an annual rental of RMB243,880 excluding management fee.

Notes:

(i). Pursuant to a property tenancy agreement dated January 15, 2007 entered into between Shanghai Fengxian and Shanghai San Lin Yi De Water and Electricity Engineering Company Limited ( ) (the ‘‘Owner’’), the property with a total gross floor area of approximately 1,763.11 square meters has been leased to the Shanghai Fengxian.

(ii). We were advised by the Group, the Owner cannot provide the Building Ownership Certificate of the property.

(iii). We were advised that the Owner is an independent third party from the Group.

(iv). We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to a property tenancy agreement (the ‘‘Tenany Agreement’’) dated January 15, 2007 entered into between the Owner and Shanghai Fengxian (the ‘‘Tenant’’), the Owner leased the property with a gross floor area of approximately 1,763.11 square meters to the Tenant for a term of 5 years from January 15, 2007 at an annual rental of RMB243,880 excluding the management fee.

(b). According to the PRC relevant laws and regulations, the Owner does not obtain the building ownership of the property and is not entitled to lease the property. Before the Owner obtained the Building Ownership Certificate of the property, it cannot be confirmed that the Tenancy Agreement is legal and valid. Thus, Shanghai Fengxian may not have the right to use the property.

—IV-28— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

18. A retail shop located at second The property comprises a retail The property is currently No commercial value floorofCommodityStreet, shop on a second floor of a retail occupied by the Group as No. 1618 Huangxing Road, complex with a gross floor area of retail shop. Yangpu District, approximately 72 square meters. Shanghai City, the People’s Republic of China The property was completed in about 1999.

The property is leased to Shanghai Fengxian for a term from January 15, 2007 to December 31, 2008 at a monthly rental of RMB23,000 excluding management fee.

Notes:

(i). Pursuant to the Realty Title Certificate No. Hu Fang Di Shi Zi (2000) 002043 ( ) issued by Shanghai Municipal Housing And Land Resource Administration Bureau ( ), the ownership rights of a building, where the property is located therein, with a gross floor area of approximately 41,846.39 square meters have been granted to Shanghai Darunfa Company Limited ( ) (the ‘‘Owner’’).

(ii). Pursuant to a property tenancy agreement dated February 1, 2007 entered into between Shanghai Fengxian and the Owner, a retail shop of a gross floor area with approximately 72 square meters has been leased to Shanghai Fengxian.

(iii). We were advised that the Owner is an independent third party from the Group.

(iv). We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to the Realty Title Certificate No. Hu Fang Di Shi Zi (2000) 002043 ( ), the ownership rights of a building, where the property is located therein, with a gross floor area of approximately 41,846.39 square meters have been granted to the Owner.

(b). Pursuant to a property tenancy agreement (the ‘‘Tenany Agreement’’) dated February 1, 2007 entered into between the Owner and Shanghai Fengxian, the Owner leased the property with a gross floor area of approximately 72 square meters to Shanghai Fengxian for a term from January 15, 2007 to December 31, 2008 at a monthly rental of RMB23,000 excluding management fee.

(c). The Tenancy Agreement is legal, valid and legally binding on the both parties.

(d). The Tenancy Agreement was registered on March 8, 2007 in the relevant government authority.

(e). The Owner has the right to lease the property.

(f). The Group can legally use the property.

—IV-29— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

19. An unit located at No. 25 Yongfu The property comprises an unit in a The property is currently No commercial value Street, 25-storey building with a gross occupied by the Group as Shi Road, floor area of approximately 80 office and retail use. Suzhou City, square meters. Jiangsu Province, the People’s Republic of China The property was completed in about 2002.

The property is leased to Suzhou Fengxian for a term of 2 years from November 5, 2006 at a monthly rental of RMB6,666.66 excluding management fee.

Notes:

(i). Pursuant to the Building Ownership Certificate No. 00140528 issued by Suzhou City Building Bureau ( ), the building ownership of the property with a gross floor area of approximately 80 square meters have been granted to Zhou Jian Hua ( ) (the ‘‘Owner’’).

(ii). Pursuant to a property tenancy agreement dated March 28, 2007 entered into between Suzhou Fengxian and the Owner, the property with a gross floor area of approximately 80 square meters has been leased to Suzhou Fengxian.

(iii). We were advised that the Owner is an independent third party from the Group.

(iv). We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to the Building Ownership Certificate No. 00140528, the building ownership of the property with a gross floor area of approximately 80 square meters has been granted to the Owner.

(b). Pursuant to a property tenancy agreement (the ‘‘Tenany Agreement’’) dated March 28, 2007 entered into between the Owner and Suzhou Fengxian, the Owner leased the property with a gross floor area of approximately 80 square meters to Suzhou Fengxian for a term of 2 years from November 5, 2006 at a monthly rental of RMB6,666.66 excluding management fee.

(c). The Tenancy Agreement is legal, valid and legally binding on the both parties.

(d). The Tenancy Agreement was registered on March 28, 2007 in the relevant government authority.

(e). The Owner has the right to lease the property.

(f). The Group can legally use the property.

—IV-30— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

20. Room 1708, The property comprises an office in The property is currently No commercial value No. 555 Renmin Zhong Road, a 27-storey building with a gross occupied by the Group as an Liwan District, floor area of approximately 162.39 office. Guangzhou City, square meters. Guangdong Province, the People’s Republic of China The property was completed in about 1995.

Thepropertyisleasedto Guangzhou Fengxian for a term from December 16, 2006 to January 15, 2009 at a monthly rental of RMB8,274 excluding management fee.

Notes:

(i). Pursuant to the Realty Title Certificate No. Yue Fang Di Zheng Zi C3480197 ( )issuedby People’s Government of Guangdong Province ( ), the building ownership of the property with a gross floor area of approximately 162.39 square meters have been granted to Sheng Feng Business Company Limited ( ) (the ‘‘Owner’’).

(ii). Pursuant to a property tenancy agreement dated January 12, 2007 entered into between Guangzhou Fengxian and the Owner and pursuant to an Application Form No. Sui Zu Bei 406700036 ( ), an office with a gross floor area of approximately 162.39 square meters has been leased to Guangzhou Fengxian.

(iii). We were advised that the Owner is an independent third party from the Group.

(iv). We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to the Realty Title Certificate No. Yue Fang Di Zhang Zi C3480197 ( ), the building ownership of the property with a gross floor area of approximately 162.39 square meters has been granted to the Owner.

(b). Pursuant to a property tenancy agreement (the ‘‘Tenany Agreement’’) dated January 12, 2007 entered into between the Owner and Guangzhou Fengxian and an Application Form No. Sui Zu Bei 406700036 ( ), the Owner leased the property with a gross floor area of approximately 162.39 square meters to Guangzhou Fengxian for a term from December 16, 2006 to January 15, 2009 at a monthly rental of RMB8,274 excluding management fee.

(c). The Tenancy Agreement is legal, valid and legally binding on the both parties.

(d). The Tenancy Agreement had been registered in the relevant government authority.

(e). The Owner has the right to lease the property.

(f). The Group can legally use the property.

—IV-31— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

21. Room 0301 of Block L, The property comprises an office in The property is currently No commercial value No. 88 Jianguo Road, a 16-storey building with a gross occupied by the Group as an Chaoyang District, floor area of approximately 115.2 office. Beijing City, square meters. the People’s Republic of China The property was completed in about 2004.

ThepropertyisleasedtoBeijing Fengxian for a term from April 29, 2007 to April 28, 2010 at an annual rental of RMB65,000 excluding management fee.

Notes:

(i). Pursuant to the Building Ownership Certificate No. Jing Fang Quan Zheng Shi Chao Si 2770199 ( ) issued by Beijing Municipal Construction Committee ( ), the ownership rights of the property with a gross floor area of approximately 589.4 square meters have been granted to Ding Shi Zhong ( )(the‘‘Owner’’).

(ii). Pursuant to a property tenancy agreement dated April 29, 2007 and a supplemental agreement dated May 8, 2007 entered into between Beijing Fengxian and Ding Shi Zhong ( ) (the ‘‘Owner’’), an office with a gross floor area of approximately 115.2 square meters hasbeenleasedtoBeijingFengxian.

(iii). We were advised that the Owner is a connected person of the Group.

(iv). We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to the Building Ownership Certificate No. Jing Fang Quan Zheng Shi Chao Si 2770199 ( ), the building ownership of a building, where the property is located therein, with a gross floor area of approximately 589.4 square meters have been granted to the Owner.

(b). Pursuant to a property tenancy agreement and a supplemental agreement (the ‘‘Tenany Agreement’’) dated April 29, 2007 and May 8, 2007 respectively entered into between the Owner and Beijing Fengxian, the Owner leased the property with a gross floor area of approximately 115.2 square meters to Beijing Fengxian for a term from April 29, 2007 to April 28, 2010 at an annual rental of RMB65,000 excluding management fee.

(c). The Tenancy Agreement is legal, valid and legally binding on the both parties.

(d). The Tenancy Agreement was registered in the relevant government authority.

(e). The Owner has the right to lease the property.

(f). The Group can legally use the property.

—IV-32— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

22. Room A03 on the fourth floor of The property comprises an office The property is currently No commercial value Taishang Hui Guan Building, on a 12-storey building with a gross occupied by the Group as an No. 860 Xianyue Road, floor area of approximately 138.94 office. Xiamen City, square meters. Fujian Province, the People’s Republic of China The property was completed in about 2001.

ThepropertyisleasedtoXiamen Fengxian for a term from April 1, 2007 to March 31, 2009 at a monthly rental of RMB5,349.19 excluding management fee.

Notes:

(i). Pursuant to the Land and Building Ownership Certificate No. Xia Di Fang Zheng 00511668 ( ) issued by Xiamen Municipal Land, Resources & Housing Administration Bureau ( ), the building ownership of a building, where the property is located therein, with a gross floor area of approximately 17,224.05 square meters have been granted to Chen Xiu Xiong ( ) and Xiamen City Tai Shang Hui Guan Management Company Limited ( ) and other 69 companies or individuals (the ‘‘Owner’’) and the land use rights of that building with an area of approximately 3,311.31 square meters have been allocated to the Owner.

(ii). Pursuant to a property tenancy agreement dated March 23, 2007 entered into between Xiamen Fengxian and the Owner, an office with a gross floor area of approximately 138.94 square meters has been leased to Xiamen Fengxian.

(iii). We were advised that the Owner is an independent third party from the Group.

(iv). We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). Pursuant to the Land and Building Ownership Certificate No. Xia Di Fang Zheng 00511668 ( ) issued by Xiamen Municipal Land, Resources & Housing Administration Bureau ( ), the building ownership of a building, where the property is located therein, with a gross floor area of approximately 17,224.05 square meters have been granted to the Owner and the land use rights of that building with an area of approximately 3,311.39 square meters have been allocated to the Owner.

(b). Pursuant to a property tenancy agreement (the ‘‘Tenancy Agreement’’) dated March 23, 2007 entered into between Xiamen Fengxian and the Owner, the Owner leased the property with a gross floor area of approximately 138.94 square meters to Xiamen Fengxian for a term from April 1, 2007 to March 31, 2009 at a monthly rental of RMB5,349.19 excluding management fee.

(c). The Tenancy Agreement had been registered on April 19, 2007 in the relevant government authority.

(d) The Owner leased the property erected on the allocated land to Xiamen Fengxian. There is a legal defect on the Tenancy Agreement. Xiamen Fengxian may not legally use the property accordingly.

—IV-33— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Group III — Property interests rented by the Group in Hong Kong

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

23. Unit No. 4408 on the 44th floor of The property comprises an office The property is occupied by No commercial value High Block, unit on the 44th floor of a 55-storey the Group as an office. Grand Millennium Plaza, composite building. 183 Queen’s Road, Central, The saleable area of the property is Hong Kong approximately 218.1 square meters.

ThepropertyisleasedtoAnda Hong Kong for a term of 3 years from March 16, 2007 at a monthly rental of HK$89,224 exclusive of management charges, government rent and rates and all other outgoings.

Notes:

(i) The registered owner of the property is Ruby Property Ltd..

(ii) We were advised that the registered owner is an independent third party from the Group.

(iii) The property lies within an area zoned for ‘‘Commercial (1)’’ under the Statutory Plan No. S/H3/21.

—IV-34— APPENDIX IV PROPERTY VALUATION

VALUATION CERTIFICATE

Group IV — Property interests to be acquired by the Group in the PRC

Capital value in existing state as at Property Description and tenure Details of occupancy April 30, 2007 (RMB)

24. A factory building located at No. The property comprises a factory The property is vacant. No commercial value 55 Tongan Industrial Centralized building with a gross floor area of Zone, Phase 1 of Siming Yuan, approximately 14,145.44 square Xiamen City, meters erected on a site with an Fujian Province, area of approximately 6,791.43 the People’s Republic of China square meters.

The property was completed in 2006.

Notes:

(i) Pursuant to the Xiamen City Tongan Industrial Centralized Zone (Si Ming Yuan) State-owned Land Use Rights Grant Contracts No. (2006) Xia Di He (Si Ming Tong) Zi 036 ( ), the land use rights of the property, in which the property is located therein, with a site area of approximately 6,791.43 square meters have been contracted to be granted to the Group at a consideration of RMB2,107,670.56.

(ii) Pursuant to the Xiamen City Tong An Industrial Ji Zhong District (Si Ming Yuan) General Factory Construction Commission Contract dated April 30, 2006 entered into between ANTA Xiamen and Xiamen City Quanhe Development Co., Ltd., a proposed factory with a gross floor area of approximately 14,145.44 square meters will be transferred to the Group after the completion.

(iii) We were advised that the Group has paid the land premium in respect of the site in full in January 2007. The State-owned Land Use Rights Certificate and the Building Ownership Certificate of the property are under application and are expected to be obtained in 2007.

(iv) We have been provided with a legal opinion on the property prepared by the Group’s legal advisor, which contains, inter alia, the following information:

(a). ANTA Xiamen has paid the land premium in full in respect of the site, in according to the Xiamen City Tongan Industrial Centralized Zone (Si Ming Yuan) State-owned Land Use Rights Grant Contract. There is no legal impediment for the Group to obtain the State-owned Land Use Rights Certificate.

(b). Upon obtaining the Completed Construction Works Certified Report, there is no impediment for the Group to obtain the Building Ownership Certificate of the property.

(v) Based on the above legal opinion, the Group has entered into the State-owned Land Use Rights Grant Contract and the land premium has been fully settled. Had the Group obtained a valid State-owned Land Use Rights Certificate and the Building Ownership Certificate of the property, the capital value in existing state of the property as at April 30, 2007, would be RMB15,600,000 (100% interests attributable to the Group).

—IV-35— APPENDIX V SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANIES LAW

Set out below is a summary of certain provisions of the Memorandum and Articles of our Company and of certain aspects of the Companies Law.

Our Company was incorporated in the Cayman Islands as an exempted company with limited liability on February 8, 2007 under the Companies Law. The Memorandum and the Articles comprise its constitution.

1. MEMORANDUM OF ASSOCIATION

(i) The Memorandum states, inter alia, that the liability of members of our Company is limited to the amount, if any, for the time being unpaid on the Shares respectively held by them and that the objects for which our Company is established are unrestricted (including acting as an investment company), and that our Company shall have and be capable of exercising any and all of the powers at any time or from time to time exercisable by a natural person of full capacity irrespective of any question of corporate benefit, as provided in section 27(2) of the Companies Law and in view of the fact that our Company is an exempted company that our Company will not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of our Company carried on outside the Cayman Islands.

(ii) Our Company may by special resolution alter its Memorandum with respect to any objects, powers or other matters specified therein.

2. ARTICLES OF ASSOCIATION

The Articles were adopted on June 11, 2007. The following is a summary of certain provisions of the Articles:

(i) Directors

(a) Power to allot and issue shares and warrants

Subject to the provisions of the Companies Law and the Memorandum and Articles and to any special rights conferred on the holders of any shares or class of shares, any share may be issued with or have attached thereto such rights, or such restrictions, whether with regard to dividend, voting, return of capital, or otherwise, as our Company may by ordinary resolution determine (or, in the absence of any such determination or so far as the same may not make specific provision, as the board may determine). Subject to the Companies Law, the rules of any Designated Stock Exchange (as defined in the Articles) and the Memorandum and Articles, any share may be issued on terms that, at the option of our Company or the holder thereof, they are liable to be redeemed.

The board may issue warrants conferring the right upon the holders thereof to subscribe for any class of shares or securities in the capital of our Company on such terms as it may from time to time determine.

Subject to the provisions of the Companies Law and the Articles and, where applicable, the rules of any Designated Stock Exchange (as defined in the Articles) and without prejudice to any special rights or restrictions for the time being attached to any shares or any class of shares, all unissued shares in our Company shall be at the disposal of the board, which may offer, allot,

—V-1— APPENDIX V SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANIES LAW

grant options over or otherwise dispose of them to such persons, at such times, for such consideration and on such terms and conditions as it in its absolute discretion thinks fit, but so that no shares shall be issued at a discount.

Neither our Company nor the board shall be obliged, when making or granting any allotment of, offer of, option over or disposal of shares, to make, or make available, any such allotment, offer, option or shares to members or others with registered addresses in any particular territory or territories being a territory or territories where, in the absence of a registration statement or other special formalities, this would or might, in the opinion of the board, be unlawful or impracticable. Members affected as a result of the foregoing sentence shall not be, or be deemed to be, a separate class of members for any purpose whatsoever.

(b) Power to dispose of the assets of our Company or any subsidiary

There are no specific provisions in the Articles relating to the disposal of the assets of our Company or any of its subsidiaries. The Directors may, however, exercise all powers and do all acts and things which may be exercised or done or approved by our Company and which are not required by the Articles or the Companies Law to be exercised or done by our Company in general meeting.

Pursuant to the Articles, payments to any Director or past Director of any sum by way of compensation for loss of office or as consideration for or in connection with his retirement from office (not being a payment to which the Director is contractually entitled) must be approved by our Company in general meeting.

(d) Loans and provision of security for loans to Directors

There are provisions in the Articles prohibiting the making of loans to Directors.

(e) Disclosure of interests in contracts with our Company or any of its subsidiaries

A Director may hold any other office or place of profit with our Company (except that of the auditor of our Company) in conjunction with his office of Director for such period and, subject to the Articles, upon such terms as the board may determine, and may be paid such extra remuneration therefor (whether by way of salary, commission, participation in profits or otherwise) in addition to any remuneration provided for by or pursuant to any other Articles. A Director may be or become a director or other officer of, or otherwise interested in, any company promoted by our Company or any other company in which our Company may be interested, and shall not be liable to account to our Company or the members for any remuneration, profits or other benefits received by him as a director, officer or member of, or from his interest in, such other company. Subject as otherwise provided by the Articles, the board may also cause the voting power conferred by the shares in any other company held or owned by our Company to be exercised in such manner in all respects as it thinks fit, including the exercise thereof in favor of any resolution appointing the Directors or any of them to be directors or officers of such other company, or voting or providing for the payment of remuneration to the directors or officers of such other company.

—V-2— APPENDIX V SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANIES LAW

Subject to the Companies Law and the Articles, no Director or proposed or intended Director shall be disqualified by his office from contracting with our Company, either with regard to his tenure of any office or place of profit or as vendor, purchaser or in any other manner whatsoever, nor shall any such contract or any other contract or arrangement in which any Director is in any way interested be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to our Company or the members for any remuneration, profit or other benefits realized by any such contract or arrangement by reason of such Director holding that office or the fiduciary relationship thereby established. A Director who to his knowledge is in any way, whether directly or indirectly, interested in a contract or arrangement or proposed contract or arrangement with our Company shall declare the nature of his interest at the meeting of the board at which the question of entering into the contract or arrangement is first taken into consideration, if he knows his interest then exists, or in any other case, at the first meeting of the board after he knows that he is or has become so interested.

A Director shall not vote (nor be counted in the quorum) on any resolution of the board approving any contract or arrangement or other proposal in which he or any of his associates is materially interested, but this prohibition shall not apply to any of the following matters, namely:

(1) any contract or arrangement for giving to such Director or his associate(s) any security or indemnity in respect of money lent by him or any of his associates or obligations incurred or undertaken by him or any of his associates at the request of or for the benefit of our Company or any of its subsidiaries;

(2) any contract or arrangement for the giving of any security or indemnity to a third party in respect of a debt or obligation of our Company or any of its subsidiaries for which the Director or his associate(s) has himself/themselves guaranteed or secured or otherwise assumed responsibility in whole or in part whether alone or jointly under a guarantee or indemnity or by the giving of security;

(3) any contract or arrangement concerning an offer of shares or debentures or other securities of or by our Company or any other company which our Company may promote or be interested in for subscription or purchase, where the Director or his associate(s) is/are or is/are to be interested as a participant in the underwriting or sub- underwriting of the offer;

(4) any contract or arrangement in which the Director or his associate(s) is/are interested in the same manner as other holders of shares or debentures or other securities of our Company by virtue only of his/their interest in shares or debentures or other securities of our Company;

(5) any contract or arrangement concerning any other company in which the Director or his associate(s) is/are interested only, whether directly or indirectly, as an officer or executive or a shareholder or in which the Director and any of his associates are not in aggregate beneficially interested in 5% or more of the issued shares or of the voting rights of any class of shares of such company (or of any third company through which his interest or that of any of his associates is derived); or

—V-3— APPENDIX V SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANIES LAW

(6) any proposal or arrangement concerning the adoption, modification or operation of a share option scheme, a pension fund or retirement, death, or disability benefits scheme or other arrangement which relates both to Directors, his associates and employees of our Company or of any of its subsidiaries and does not provide in respect of any Director, or his associate(s), as such any privilege or advantage not accorded generally to the class of persons to which such scheme or fund relates.

(f) Remuneration

The ordinary remuneration of the Directors shall from time to time be determined by our Company in general meeting, such sum (unless otherwise directed by the resolution by which it is voted) to be divided amongst the Directors in such proportions and in such manner as the board may agree or, failing agreement, equally, except that any Director holding office for part only of the period in respect of which the remuneration is payable shall only rank in such division in proportion to the time during such period for which he held office. The Directors shall also be entitled to be prepaid or repaid all traveling, hotel and incidental expenses reasonably expected to be incurred or incurred by them in attending any board meetings, committee meetings or general meetings or separate meetings of any class of shares or of debentures of our Company or otherwise in connection with the discharge of their duties as Directors.

Any Director who, by request, goes or resides abroad for any purpose of our Company or who performs services which in the opinion of the board go beyond the ordinary duties of a Director may be paid such extra remuneration (whether by way of salary, commission, participation in profits or otherwise) as the board may determine and such extra remuneration shall be in addition to or in substitution for any ordinary remuneration as a Director. An executive Director appointed to be a managing director, joint managing director, deputy managing director or other executive officer shall receive such remuneration (whether by way of salary, commission or participation in profits or otherwise or byalloranyofthosemodes)and such other benefits (including pension and/or gratuity and/or other benefits on retirement) and allowances as the board may from time to time decide. Such remuneration may be either in addition to or in lieu of his remuneration as a Director.

The board may establish or concur or join with other companies (being subsidiary companies of our Company or companies with which it is associated in business) in establishing and making contributions out of our Company’s monies to any schemes or funds for providing pensions, sickness or compassionate allowances, life assurance or other benefits for employees (which expression as used in this and the following paragraph shall include any Director or ex- Director who may hold or have held any executive office or any office of profit with our Company or any of its subsidiaries) and ex-employees of our Company and their dependents or any class or classes of such persons.

The board may pay, enter into agreements to pay or make grants of revocable or irrevocable, and either subject or not subject to any terms or conditions, pensions or other benefits to employees and ex-employees and their dependents, or to any of such persons, including pensions or benefits additional to those, if any, to which such employees or ex- employees or their dependents are or may become entitled under any such scheme or fund as is mentioned in the previous paragraph. Any such pension or benefit may, as the board considers desirable, be granted to an employee either before and in anticipation of, or upon or at any time after, his actual retirement.

—V-4— APPENDIX V SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANIES LAW

(g) Retirement, appointment and removal

At each annual general meeting, one third of the Directors for the time being (or if their number is not a multiple of three, then the number nearest to but not less than one third) will retire from office provided that every Director shall be subject to retirement at least once every three years. The Directors to retire in every year will be those who have been longest in office since their last re-election or appointment but as between persons who became or were last re- elected Directors on the same day those to retire will (unless they otherwise agree among themselves) be determined by lot. There are no provisions relating to retirement of Directors upon reaching any age limit.

The Directors shall have the power from time to time and at any time to appoint any person as a Director either to fill a casual vacancy on the board or as an addition to the existing board. AnyDirectorsoappointedshallholdofficeonlyuntil the next following annual general meeting of our Company and shall then be eligible for re-election. Neither a Director nor an alternate Director is required to hold any shares in our Company by way of qualification.

A Director may be removed by an ordinary resolution of our Company before the expiration of his period of office (but without prejudice to any claim which such Director may have for damages for any breach of any contract between him and our Company) and may by ordinary resolution appoint another in his place. Unless otherwise determined by our Company in general meeting, the number of Directors shall not be less than two. There is no maximum number of Directors.

The office or director shall be vacated:

(1) if he resigns his office by notice in writing delivered to our Company at the registered office of our Company for the time being or tendered at a meeting of the Board;

(2) becomes of unsound mind or dies;

(3) if, without special leave, he is absent from meetings of the board (unless an alternate director appointed by him attends) for six (6) consecutive months, and the board resolves that his office is vacated;

(4) if he becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors;

(5) if he is prohibited from being a director by law;

(6) if he ceases to be a director by virtue of any provision of law or is removed from office pursuant to the Articles.

The board may from time to time appoint one or more of its body to be managing director, joint managing director, or deputy managing director or to hold any other employment or executive office with our Company for such period and upon such terms as the board may determine and the board may revoke or terminate any of such appointments. The board may delegate any of its powers, authorities and discretions to committees consisting of such Director or Directors and other persons as the board thinks fit, and it may from time to time revoke such

—V-5— APPENDIX V SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANIES LAW

delegation or revoke the appointment of and discharge any such committees either wholly or in part, and either as to persons or purposes, but every committee so formed shall, in the exercise of the powers, authorities and discretions so delegated, conform to any regulations that may from time to time be imposed upon it by the board.

(h) Borrowing powers

The board may exercise all the powers of our Company to raise or borrow money, to mortgage or charge all or any part of the undertaking, property and assets (present and future) and uncalled capital of our Company and, subject to the Companies Law, to issue debentures, bonds and other securities of our Company, whether outright or as collateral security for any debt, liability or obligation of our Company or of any third party.

Note: These provisions, in common with the Articles in general, can be varied with the sanction of a special resolution of our Company.

(i) Proceedings of the Board

The board may meet for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit. Questions arising at any meeting shall be determined by a majority of votes. In the case of an equality of votes, the chairman of the meeting shall have an additional or casting vote.

(j) Register of Directors and Officers

The Companies Law and the Articles provide that our Company is required to maintain at its registered office a register of directors and officers which is not available for inspection by the public. A copy of such register must be filed with the Registrar of Companies in the Cayman Islands and any change must be notified to the Registrar within thirty (30) days of any change in such directors or officers.

(ii) Alterations to constitutional documents

The Articles may be rescinded, altered or amended by our Company in general meeting by special resolution. The Articles state that a special resolution shall be required to alter the provisions of the Memorandum, to amend the Articles or to change the name of our Company.

(iii) Alteration of capital

Our Company may from time to time by ordinary resolution in accordance with the relevant provisions of the Companies Law:

(a) increase its capital by such sum, to be divided into shares of such amounts as the resolution shall prescribe;

(b) consolidate and divide all or any of its capital into shares of larger amount than its existing shares;

—V-6— APPENDIX V SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANIES LAW

(c) divide its shares into several classes and without prejudice to any special rights previously conferred on the holders of existing shares attach thereto respectively any preferential, deferred, qualified or special rights, privileges, conditions or restrictions as our Company in general meeting or as the directors may determine;

(d) sub-divide its shares or any of them into shares of smaller amount than is fixed by the Memorandum, subject nevertheless to the provisions of the Companies Law, and so that the resolution whereby any share is sub-divided may determine that, as between the holders of the shares resulting from such sub-division, one or more of the shares may have any such preferred or other special rights, over, or may have such deferred rights or be subject to any such restrictions as compared with the others as our Company has power to attach to unissued or new shares; or

(e) cancel any shares which, at the date of passing of the resolution, have not been taken, or agreed to be taken, by any person, and diminish the amount of its capital by the amount of the shares so cancelled.

Our Company may subject to the provisions of the Companies Law reduce its share capital or any capital redemption reserve or other undistributablereserveinanywaybyspecialresolution.

(iv) Variation of rights of existing shares or classes of shares

Subject to the Companies Law, all or any of the special rights attached to the shares or any class of shares may (unless otherwise provided for by the terms of issue of that class) be varied, modified or abrogated either with the consent in writing of the holders of not less than three-fourths in nominal value of the issued shares of that class or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class. To every such separate general meeting the provisions of the Articles relating to general meetings will mutatis mutandis apply, but so that the necessary quorum (other than at an adjourned meeting) shall be two persons holding or representing by proxy not less than one-third in nominal value of the issued shares of that class and at any adjourned meeting two holders present in person or by proxy whatever the number of shares held by them shall be a quorum. Every holder of shares of the class shall be entitled on a poll to one vote for every such share held by him, and any holder of shares of the class present in person or by proxy may demand a poll.

The special rights conferred upon the holders of any shares or class of shares shall not, unless otherwise expressly provided in the rights attaching to the terms of issue of such shares, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

(v) Special resolution-majority required

Pursuant to the Articles, a special resolution of our Company must be passed by a majority of not less than three-fourths of the votes cast by such members as, being entitled so to do, vote in person or, in the case of such members as are corporations, by their duly authorized representatives or, where proxies are allowed, by proxy at a general meeting of which not less than twenty-one (21) clear days’ notice, specifying the intention to propose the resolution as a special resolution, has been duly given. Provided that, except in the case of an annual general meeting, if it is so agreed by a majority in number of the members having a right to attend and vote at such meeting, being a majority together holding not less than ninety-five (95)% in nominal value of the shares giving that right and, in the case

—V-7— APPENDIX V SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANIES LAW

of an annual general meeting, if so agreed by all Members entitled to attend and vote thereat, a resolution may be proposed and passed as a special resolution at a meeting of which less than twenty- one (21) clear days’ notice has been given.

A copy of any special resolution must be forwarded to the Registrar of Companies in the Cayman Islands within fifteen (15) days of being passed.

An ordinary resolution is defined in the Articles to mean a resolution passed by a simple majority of the votes of such members of our Company as, being entitled to do so, vote in person or, in the case of corporations, by their duly authorized representatives or, where proxies are allowed, by proxy at a general meeting held in accordance with the Articles.

(vi) Voting rights (generally and on a poll) and right to demand a poll

Subject to any special rights or restrictions as to voting for the time being attached to any shares by or in accordance with the Articles, at any general meeting on a show of hands, every member who ispresentinpersonorbyproxyorbeingacorporation, is present by its duly authorized representative shall have one vote and on a poll every member present in person or by proxy or, in the case of a member being a corporation, by its duly authorized representative shall have one vote for every fully paid share of which he is the holder but so that no amount paid up or credited as paid up on a share in advance of calls or installments is treated for the foregoing purposes as paid up on the share. Notwithstanding anything contained in the Articles, where more than one proxy is appointed by a member which is a clearing house (or its nominee(s)), each such proxy shall have one vote on a show of hands. On a poll, a member entitled to more than one vote need not use all his votes or cast all the votesheusesinthesameway.

At any general meeting a resolution put to the vote of the meeting is to be decided on a show of hands unless voting by way of a poll is required by the rules of the Designated Stock Exchange (as defined in the Articles) or (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded by (a) the chairman of the meeting or (b) at least three members present in person or, in the case of a member being a corporation, by its duly authorized representative or by proxy for the time being entitled to vote at the meeting or (c) any member or members present in person or, in the case of a member being a corporation, by its duly authorized representative or by proxy and representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting or (d) a member or members present in person or, in the case of a member being a corporation, by its duly authorized representative or by proxy and holding shares in our Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid equal to not less than one-tenth of the total sum paid up on all the shares conferring that right or if required by the rules of the Designated Stock Exchange, by any Director or Directors who, individually or collectively, hold proxies in respect of shares representing five per cent. (5%) or more of the total voting rights at such meeting.

If a recognized clearing house (or its nominee(s)) is a member of our Company it may authorize such person or persons as it thinks fit to act as its representative(s) at any meeting of our Company or at any meeting of any class of members of our Company provided that, if more than one person is so authorized, the authorization shall specify the number and class of shares in respect of which each such person is so authorized. A person authorized pursuant to this provision shall be deemed to have been duly authorized without further evidence of the facts and be entitled to exercise the same powers

—V-8— APPENDIX V SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANIES LAW

on behalf of the recognized clearing house (or its nominee(s)) as if such person was the registered holder of the shares of our Company held by that clearing house (or its nominee(s)) including the right to vote individually on a show of hands.

Where our Company has any knowledge that any shareholder is, under the rules of the Designated Stock Exchange (as defined in the Articles), required to abstain from voting on any particular resolution of our Company or restricted to voting only for or only against any particular resolution of our Company, any votes cast by or on behalf of such shareholder in contravention of such requirement or restriction shall not be counted.

(vii) Requirements for annual general meetings

An annual general meeting of our Company must be held in each year, other than the year of adoption of the Articles (within a period of not more than 15 months after the holding of the last preceding annual general meeting or a period of 18 months from the date of adoption of the Articles, unless a longer period would not infringe the rules of any Designated Stock Exchange (as defined in the Articles)) at such time and place as may be determined by the board.

(viii) Accounts and audit

The board shall cause true accounts to be kept of the sums of money received and expended by our Company, and the matters in respect of which such receipt and expenditure take place, and of the property, assets, credits and liabilities of our Company and of all other matters required by the Companies Law or necessary to give a true and fair view of our Company’s affairs and to explain its transactions.

The accounting records shall be kept at the registered office or at such other place or places as the board decides and shall always be open to inspection by any Director. No member (other than a Director) shall have any right to inspect any accounting record or book or document of our Company except as conferred by law or authorized by the board or our Company in general meeting.

A copy of every balance sheet and profit and loss account (including every document required by law to be annexed thereto) which is to be laid before our Company at its general meeting, together with a printed copy of the Directors’ report and a copy of the auditors’ report, shall not less than twenty-one (21) days before the date of the meeting and at the same time as the notice of annual general meeting be sent to every person entitled to receive notices of general meetings of our Company under the provisions the Articles; however, subject to compliance with all applicable laws, including the rules of the Designated Stock Exchange (as defined in the Articles), our Company may send to such persons a summary financial statement derived from our Company’s annual accounts and the directors’ report instead provided that any such person may by notice in writing served on our Company, demand that our Company sends to him, in addition to a summary financial statement, a complete printed copy of the Company’s annual financial statement and the directors’ report thereon.

Auditors shall be appointed and the terms and tenure of such appointment and their duties at all times regulated in accordance with the provisions of the Articles. The remuneration of the auditors shall be fixed by our Company in general meeting or in such manner as the members may determine.

The financial statements of our Company shall be audited by the auditor in accordance with generally accepted auditing standards. The auditor shall make a written report thereon in accordance with generally accepted auditing standards and the report of the auditor shall be submitted to the

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members in general meeting. The generally accepted auditing standards referred to herein may be those of a country or jurisdiction other than the Cayman Islands. If so, the financial statements and the report of the auditor should disclose this fact and name such country or jurisdiction.

(ix) Notices of meetings and business to be conducted thereat

An annual general meeting and any extraordinary general meeting at which it is proposed to pass a special resolution shall (save as set out in sub-paragraph (v) above) be called by at least twenty-one (21) clear days’ notice in writing, and any other extraordinary general meeting shall be called by at least fourteen (14) clear days’ notice (in each case exclusive of the day on which the notice is served or deemed to be served and of the day for which it is given). The notice must specify the time and place of the meeting and, in the case of special business, the general nature of that business. In addition notice of every general meeting shall be given to all members of our Company other than such as, under the provisions of the Articles or the terms of issue of the shares they hold, are not entitled to receive such notices from our Company, and also to the auditors for the time being of our Company.

Notwithstanding that a meeting of our Company is called by shorter notice than that mentioned above, it shall be deemed to have been duly called if it is so agreed:

(a) in the case of a meeting called as an annual general meeting, by all members of our Company entitled to attend and vote thereat; and

(b) in the case of any other meeting, by a majority in number of the members having a right to attend and vote at the meeting, being a majority together holding not less than ninety-five (95)% in nominal value of the issued shares giving that right.

All business shall be deemed special that is transacted at an extraordinary general meeting and also all business shall be deemed special that is transacted at an annual general meeting with the exception of the following, which shall be deemed ordinary business:

(a) the declaration and sanctioning of dividends;

(b) the consideration and adoption of the accounts and balance sheet and the reports of the directors and the auditors;

(d) the appointment of auditors and other officers;

(e) the fixing of the remuneration of the directors and of the auditors;

(f) the granting of any mandate or authority to the directors to offer, allot, grant options over or otherwise dispose of the unissued shares of our Company representing not more than twenty per cent (20)% in nominal value of its existing issued share capital; and

(g) the granting of any mandate or authority to the directors to repurchase securities of our Company.

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(x) Transfer of shares

All transfers of shares may be effected by an instrument of transfer in the usual or common form or in a form prescribed by the Designated Stock Exchange (as defined in the Articles) or in such other form as the board may approve and which may be under hand or, if the transferor or transferee is a clearing house or its nominee(s), by hand or by machine imprinted signature or by such other manner of execution as the board may approve from time to time. The instrument of transfer shall be executed by or on behalf of the transferor and the transferee provided that the board may dispense with the execution of the instrument of transfer by the transferee in any case in which it thinks fit, in its discretion, to do so and the transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the register of members in respect thereof. The board may also resolve either generally or in any particular case, upon request by either the transferor or the transferee, to accept mechanically executed transfers.

The board in so far as permitted by any applicable law may, in its absolute discretion, at any time and from time to time transfer any share upon the principal register to any branch register or any share on any branch register to the principal register or any other branch register.

Unless the board otherwise agrees, no shares on the principal register shall be transferred to any branch register nor may shares on any branch register be transferred to the principal register or any other branch register. All transfers and other documents of title shall be lodged for registration and registered, in the case of shares on a branch register, at the relevant registration office and, in the case of shares on the principal register, at the registered office in the Cayman Islands or such other place at which the principal register is kept in accordance with the Companies Law.

The board may, in its absolute discretion, and without assigning any reason, refuse to register a transfer of any share (not being a fully paid up share) to a person of whom it does not approve or any share issued under any share incentive scheme for employees upon which a restriction on transfer imposed thereby still subsists, and it may also refuse to register any transfer of any share to more than four joint holders or any transfer of any share (not being a fully paid up share) on which our Company has a lien.

The board may decline to recognize any instrument of transfer unless a fee of such maximum sum as any Designated Stock Exchange (as defined in the Articles) may determine to be payable or such lesser sum as the Directors may from time to time require is paid to our Company in respect thereof, the instrument of transfer, if applicable, is properly stamped, is in respect of only one class of share and is lodged at the relevant registration office or registered office or such other place at which the principal register is kept accompanied by the relevant share certificate(s) and such other evidence as the board may reasonably require to show the right of the transferor to make the transfer (and if the instrument of transfer is executed by some other person on his behalf, the authority of that person so to do).

The registration of transfers may be suspended and the register closed on giving notice by advertisement in a relevant newspaper and, where applicable, any other newspapers in accordance with the requirements of any Designated Stock Exchange (as defined in the Articles), at such times and for such periods as the board may determine and either generally or in respect of any class of shares. The register of members shall not be closed for periods exceeding in the whole thirty (30) days in any year.

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(xi) Power for our Company to purchase its own shares

Our Company is empowered by the Companies Law and the Articles to purchase its own Shares subject to certain restrictions and the Board may only exercise this power on behalf of our Company subject to any applicable requirements imposed from time to time by any Designated Stock Exchange (as defined in the Articles).

(xii) Power for any subsidiary of our Company to own shares in the Company

There are no provisions in the Articles relating to ownership of shares in our Company by a subsidiary.

(xiii) Dividends and other methods of distribution

Subject to the Companies Law, our Company in general meeting may declare dividends in any currency to be paid to the members but no dividend shall be declared in excess of the amount recommended by the board.

The Articles provide dividends may be declared and paid out of the profits of our Company, realized or unrealized, or from any reserve set aside from profits which the directors determine is no longer needed. With the sanction of an ordinary resolution dividends may also be declared and paid out of share premium account or any other fund or account which can be authorized for this purpose in accordance with the Companies Law.

Except in so far as the rights attaching to, or the terms of issue of, any share may otherwise provide, (a) all dividends shall be declared and paid according to the amounts paid up on the shares in respect whereof the dividend is paid but no amount paid up on a share in advance of calls shall for this purpose be treated as paid up on the share and (b) all dividends shall be apportioned and paid pro rata according to the amount paid up on the shares during any portion or portions of the period in respect of which the dividend is paid. The Directors may deduct from any dividend or other monies payable to any member or in respect of any shares all sums of money (if any) presently payable by him to our Company on account of calls or otherwise.

Whenever the board or our Company in general meeting has resolved that a dividend be paid or declared on the share capital of our Company, the board may further resolve either (a) that such dividend be satisfied wholly or in part in the form of an allotment of shares credited as fully paid up, provided that the shareholders entitled thereto will be entitled to elect to receive such dividend (or part thereof) in cash in lieu of such allotment, or (b) that shareholders entitled to such dividend will be entitled to elect to receive an allotment of shares credited as fully paid up in lieu of the whole or such part of the dividend as the board may think fit. Our Company may also upon the recommendation of the board by an ordinary resolution resolve in respect of any one particular dividend of our Company that it may be satisfied wholly in the form of an allotment of shares credited as fully paid up without offering any right to shareholders to elect to receive such dividend in cash in lieu of such allotment.

Any dividend, interest or other sum payable in cash to the holder of shares may be paid by cheque or warrant sent through the post addressed to the holder at his registered address, or in the case of joint holders, addressed to the holder whose name stands first in the register of our Company in respect of the shares at his address as appearing in the register or addressed to such person and at such addresses as the holder or joint holders may in writing direct. Every such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the

—V-12— APPENDIX V SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANIES LAW

case of joint holders, to the order of the holder whose name stands first on the register in respect of such shares, and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to our Company. Any one of two or more joint holders may give effectual receipts for any dividends or other moneys payable or property distributable in respect of the shares held by such joint holders.

Whenever the board or our Company in general meeting has resolved that a dividend be paid or declared the board may further resolve that such dividend be satisfied wholly or in part by the distribution of specific assets of any kind.

All dividends or bonuses unclaimed for one year after having been declared may be invested or otherwise made use of by the board for the benefit of our Company until claimed and our Company shall not be constituted a trustee in respect thereof. All dividends or bonuses unclaimed for six years after having been declared maybeforfeitedbytheboardandshallreverttoourCompany.

No dividend or other monies payable by our Company on or in respect of any share shall bear interest against our Company.

(xiv) Proxies

Any member of our Company entitled to attend and vote at a meeting of our Company is entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of our Company or at a class meeting. A proxy need not be a member of our Company and shall be entitled to exercise the same powers on behalf of a member who is an individual and for whom he acts as proxy as such member could exercise. In addition, a proxy shall be entitled to exercise the same powers on behalf of a member which is a corporation and for which he acts as proxy as such member could exercise if it were an individual member. On a poll or on a show of hands, votes may be given either personally (or, in the case of a member being a corporation, by its duly authorized representative) or by proxy.

(xv) Call on shares and forfeiture of shares

Subject to the Articles and to the terms of allotment, the board may from time to time make such calls upon the members in respect of any monies unpaid on the shares held by them respectively (whether on account of the nominal value of the shares or by way of premium). A call may be made payable either in one lump sum or by installments. If the sum payable in respect of any call or installment is not paid on or before the day appointed for payment thereof, the person or persons from whom the sum is due shall pay interest on the same at such rate not exceeding twenty (20)% per annum as the board may agree to accept from the day appointed for the payment thereof to the time of actual payment, but the board may waive payment of such interest wholly or in part. The board may, if it thinks fit, receive from any member willing to advance the same, either in money or money’s worth, all or any part of the monies uncalled and unpaid or installments payable upon any shares held by him, and upon all or any of the monies so advanced our Company may pay interest at such rate (if any) as the board may decide.

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If a member fails to pay any call on the day appointed for payment thereof, the board may serve not less than fourteen (14) clear days’ notice on him requiring payment of so much of the call as is unpaid, together with any interest which may have accrued and which may still accrue up to the date of actual payment and stating that, in the event of non-payment at or before the time appointed, the shares in respect of which the call was made will be liable to be forfeited.

If the requirements of any such notice are not complied with, any share in respect of which the notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the board to that effect. Such forfeiture will include all dividends and bonuses declared in respect of the forfeited share and not actually paid before the forfeiture.

A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares but shall, notwithstanding, remain liable to pay to our Company all monies which, at the date of forfeiture, were payable by him to our Company in respect of the shares, together with (if the board shall in its discretion so require) interest thereon from the date of forfeiture until the date of actual payment at such rate not exceeding twenty (20)% per annum as the board determines.

(xvi) Inspection of register of members

Pursuant to the Articles the register and branch register of members shall be open to inspection for at least two (2) hours on every business day by members without charge, or by any other person upon a maximum payment of HK$2.50 or such lesser sum specified by the board, at the registered office or such other place at which the register is kept in accordance with the Companies Law or, upon a maximum payment of HK$1.00 or such lesser sum specified by the board, at the Registration Office (as defined in the Articles), unless the register is closed in accordance with the Articles.

(xvii) Quorum for meetings and separate class meetings

No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business, but the absence of a quorum shall not preclude the appointment of a chairman.

Save as otherwise provided by the Articles the quorum for a general meeting shall be two members present in person (or, in the case of a member being a corporation, by its duly authorized representative) or by proxy and entitled to vote. In respect of a separate class meeting (other than an adjourned meeting) convened to sanction the modification of class rights the necessary quorum shall be two persons holding or representing by proxy not less than one-third in nominal value of the issued shares of that class.

A corporation being a member shall be deemed for the purpose of the Articles to be present in person if represented by its duly authorized representative being the person appointed by resolution of the directors or other governing body of such corporation to act as its representative at the relevant general meeting of our Company or at any relevant general meeting of any class of members of our Company.

(xviii) Rights of the minorities in relation to fraud or oppression

There are no provisions in the Articles relating to rights of minority shareholders in relation to fraud or oppression. However, certain remedies are available to shareholders of our Company under Cayman law, as summarized in paragraph 3(vi) of this Appendix.

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(xix) Procedures on liquidation

A resolution that our Company be wound up by the court or be wound up voluntarily shall be a special resolution.

Subject to any special rights, privileges or restrictions as to the distribution of available surplus assets on liquidation for the time being attached to any class or classes of shares (i) if our Company shall be wound up and the assets available for distribution amongst the members of our Company shall be more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the excess shall be distributed pari passu amongst such members in proportion to the amount paid up on the shares held by them respectively and (ii) if our Company shall be wound up and the assets available for distribution amongst the members as such shall be insufficient to repay the whole of the paid-up capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the members in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up on the shares held by them respectively.

If our Company shall be wound up (whether the liquidation is voluntary or by the court) the liquidator may, with the authority of a special resolution and any other sanction required by the Companies Law divide among the members in specie or kind the whole or any part of the assets of our Company whether the assets shall consist of property of one kind or shall consist of properties of different kinds and the liquidator may, for such purpose, set such value as he deems fair upon any one or more class or classes of property to be divided as aforesaid and may determine how such division shall be carried out as between the members or different classes of members. The liquidator may, with the like authority, vest any part of the assets in trustees upon such trusts for the benefit of members as the liquidator, with the like authority, shall think fit, but so that no contributory shall be compelled to accept any shares or other property in respect of which there is a liability.

(xx) Untraceable members

Pursuant to the Articles, our Company may sell any of the shares of a member who is untraceable if (i) all cheques or warrants in respect of dividends of the shares in question (being not less than three in total number) for any sum payable in cash to the holder of such shares have remained uncashed for a period of 12 years; (ii) upon the expiry of the 12 year period, our Company has not during that time received any indication of the existence of the member; and (iii) our Company has caused an advertisement to be published in accordance with the rules of the Designated Stock Exchange (as defined in the Articles) giving notice of its intention to sell such shares and a period of three months, or such shorter period as may be permitted by the Designated Stock Exchange (as defined in the Articles), has elapsed since the date of such advertisement and the Designated Stock Exchange (as defined in the Articles) has been notified of such intention. The net proceeds of any such sale shall belong to our Company and upon receipt by our Company of such net proceeds, it shall become indebted to the former member of our Company for an amount equal to such net proceeds.

(xxi) Subscription rights reserve

The Articles provide that to the extent that it is not prohibited by and is in compliance with the Companies Law, if warrants to subscribe for shares have been issued by our Company and our Company does any act or engages in any transaction which would result in the subscription price of such warrants being reduced below the par value of a share, a subscription rights reserve shall be establishedandappliedinpayingupthedifferencebetweenthesubscriptionpriceandtheparvalueof a share on any exercise of the warrants.

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3. CAYMAN ISLANDS COMPANY LAW

Our Company is incorporated in the Cayman Islands subject to the Companies Law and, therefore, operates subject to Cayman law. Set out below is a summary of certain provisions of Cayman company law, although this does not purport to contain all applicable qualifications and exceptions or to be a complete review of all matters of Cayman company law and taxation, which may differ from equivalent provisions in jurisdictions with which interested parties may be more familiar:

(i) Operations

As an exempted company, our Company’s operations must be conducted mainly outside the Cayman Islands. Our Company is required to file an annual return each year with the Registrar of Companies of the Cayman Islands and pay a fee which is based on the amount of its authorized share capital.

(ii) Share capital

The Companies Law provides that where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the value of the premiums on those shares shall be transferred to an account, to be called the ‘‘share premium account’’. At the option of a company, these provisions may not apply to premiums on shares of that company allotted pursuant to any arrangement in consideration of the acquisition or cancellation of shares in any other company and issued at a premium. The Companies Law provides that the share premium account may be applied by the company subject to the provisions, if any, of its memorandum and articles of association in (a) paying distributions or dividends to members; (b) paying up unissued shares of the company to be issued to members as fully paid bonus shares; (c) the redemption and repurchase of shares (subject to the provisions of section 37 of the Companies Law); (d) writing-off the preliminary expenses of the company; (e) writing-off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company; and (f) providing for the premium payable on redemption or purchase of any shares or debentures of the company.

No distribution or dividend may be paid to members out of the share premium account unless immediately following the date on which the distribution or dividend is proposed to be paid, the company will be able to pay its debts as they fall due in the ordinary course business.

The Companies Law provides that, subject to confirmation by the Grand Court of the Cayman Islands (the ‘‘Court’’), a company limited by sharesoracompanylimitedbyguaranteeandhavinga share capital may, if so authorized by its articles of association, by special resolution reduce its share capital in any way.

The Articles includes certain protections for holders of special classes of shares, requiring their consent to be obtained before their rights may be varied. The consent of the specified proportions of the holders of the issued shares of that class or the sanction of a resolution passed at a separate meeting of the holders of those shares is required.

(iii) Financial assistance to purchase shares of a company or its holding company

Subject to all applicable laws, our Company may give financial assistance to Directors and employees of our Company, its subsidiaries, its holding company or any subsidiary of such holding company in order that they may buy Shares in our Company or shares in any subsidiary or holding

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company. Further, subject to all applicable laws, our Company may give financial assistance to a trustee for the acquisition of Shares in our Company or shares in any such subsidiary or holding company to be held for the benefit of employees of our Company, its subsidiaries, any holding company of our Company or any subsidiary of any such holding company (including salaried Directors).

There is no statutory restriction in the Cayman Islands on the provision of financial assistance by a company to another person for the purchase of, or subscription for, its own or its holding company’s shares. Accordingly, a company may provide financial assistance if the directors of the company consider, in discharging their duties of care and acting in good faith, for a proper purpose and in the interests of the company, that such assistance can properly be given. Such assistance should be on an arm’s-length basis.

(iv) Purchase of shares and warrants by a company and its subsidiaries

Subject to the provisions of the Companies Law, a company limited by shares or a company limited by guarantee and having a share capital may, if so authorized by its articles of association, issue shares which are to be redeemed or are liable to be redeemed at the option of the company or a shareholder. In addition, such a company may, if authorized to do so by its articles of association, purchase its own shares, including any redeemable shares. However, if the articles of association do not authorize the manner or purchase, a company cannot purchase any of its own shares unless the manner of purchase has first been authorized by an ordinary resolution of the company. At no time may a company redeem or purchase its shares unless they are fully paid. A company may not redeem or purchase any of its shares if, as a result of the redemption or purchase, there would no longer be any member of the company holding shares. A payment out of capital by a company for the redemption or purchase of its own shares is not lawful unless immediately following the date on which the payment is proposed to be made, the company shall be able to pay its debts as they fall due in the ordinary course of business.

A company is not prohibited from purchasing and may purchase its own warrants subject to and in accordance with the terms and conditions of the relevant warrant instrument or certificate. There is no requirement under Cayman Islands law that a company’s memorandum or articles of association contain a specific provision enabling such purchases and the directors of a company may rely upon the general power contained in its memorandum of association to buy and sell and deal in personal property of all kinds.

Under Cayman Islands law, a subsidiary may hold shares in its holding company and, in certain circumstances, may acquire such shares.

(v) Dividends and distributions

With the exception of section 34 of the Companies Law, there is no statutory provisions relating to the payment of dividends. Based upon English case law, which is regarded as persuasive in the Cayman Islands, dividends may be paid only out of profits. In addition, section 34 of the Companies Law permits, subject to a solvency test and the provisions, if any, of the company’s memorandum and articles of association, the payment of dividends and distributions out of the share premium account (see paragraph 2(m) above for further details).

—V-17— APPENDIX V SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANIES LAW

(vi) Protection of minorities

The Cayman Islands courts ordinarily would be expected to follow English case law precedents which permit a minority shareholder to commence a representative action against or derivative actions in the name of the company to challenge (a) an act which is ultra vires the company or illegal, (b) an act which constitutes a fraud against the minority and the wrongdoers are themselves in control of the company, and (c) an irregularity in the passing of a resolution which requires a qualified (or special) majority.

In the case of a company (not being a bank) having a share capital divided into shares, the Court may, on the application of members holding not less than one fifth of the shares of the company in issue, appoint an inspector to examine into the affairs of the company and to report thereon in such manner as the Court shall direct.

Any shareholder of a company may petition the Court which may make a winding up order if the Court is of the opinion that it is just and equitable that the company should be wound up.

Generally claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the Cayman Islands or their individual rightsasshareholdersas established by the company’s memorandum and articles of association.

(vii) Management

The Companies Law contains no specific restrictions on the power of directors to dispose of assets of a company. However, as a matter of general law, every officer of a company, which includes a director, managing director and secretary, in exercising his powers and discharging his duties must do so honestly and in good faith with a view to the best interests of the company and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

(viii) Accounting and auditing requirements

A company shall cause proper books of account to be kept with respect to (i) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place; (ii) all sales and purchases of goods by the company; and (iii) the assets and liabilities of the company.

Proper books of account shall not be deemed to be kept if there are not kept such books as are necessary to give a true and fair view of the state of the company’s affairs and to explain its transactions.

(ix) Exchange control

There are no exchange control regulations or currency restrictions in the Cayman Islands.

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(x) Taxation

Pursuant to section 6 of the Tax Concessions Law (1999 Revision) of the Cayman Islands, the Company has obtained an undertaking from the Governor-in-Cabinet:

(a) that no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciation shall apply to our Company or its operations; and

(b) that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not be payable on or in respect of the shares, debentures or other obligations of our Company.

The undertaking for our Company is for a period of twenty years from February 27, 2007.

The Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to our Company levied by the Government of the Cayman Islands save certain stamp duties which may be applicable, from time to time, on certain instruments executed in or brought within the jurisdiction of the Cayman Islands. The Cayman Islands are not party to any double tax treaties.

(xi) Stamp duty on transfers

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands companies except those which hold interests in land in the Cayman Islands.

(xii) Loans to directors

There is no express provision in the Companies Law prohibiting the making of loans by a company to any of its directors.

(xiii) Inspection of corporate records

Members of our Company will have no general right under the Companies Law to inspect or obtain copies of the register of members or corporate records of our Company. They will, however, have such rights as may be set out in our Company’s Articles.

An exempted company may, subject to the provisions of its articles of association, maintain its principal register of members and any branch registers at such locations, whether within or without the Cayman Islands, as the directors may, from time to time, think fit. There is no requirement under the Companies Law for an exempted company to make any returns of members to the Registrar of Companies of the Cayman Islands. The names and addresses of the members are, accordingly, not a matter of public record and are not available for public inspection.

(xiv) Winding up

A company may be wound up by either an order of the Court or by a special resolution of its members. The Court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the Court, just and equitable to do so.

—V-19— APPENDIX V SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANIES LAW

A company may be wound up voluntarily when the members so resolve in general meeting by special resolution, or, in the case of a limited duration company, when the period fixed for the duration of the company by its memorandum expires, or the event occurs on the occurrence of which the memorandum provides that the company is to be dissolved. In the case of a voluntary winding up, such company is obliged to cease to carry on its business from the time of passing the resolution for voluntary winding up or upon the expiry of the period or the occurrence of the event referred to above.

For the purpose of conducting the proceedings in winding up a company and assisting the Court, there may be appointed one or more than one person to be called an official liquidator or official liquidator; and the Court may appoint to such office such person or persons, either provisionally or otherwise, as it thinks fit, and if more persons than one are appointed to such office, the Court shall declare whether any act hereby required or authorized to be done by the official liquidator is to be done by all or any one or more of such persons. The Court may also determine whether any and what security is to be given by an official liquidator on his appointment; if no official liquidator is appointed, or during any vacancy in such office, all the property of the company shall be in the custody of the Court. In the case of a members’ voluntary winding up of a company, the company in general meeting must appoint one or more liquidators for the purpose of winding up the affairs of the company and distributing its assets.

Upon the appointment of a liquidator, the responsibility for the company’s affairs rests entirely in his hands and no future executive action may be carried out without his approval. A liquidator’s duties are to collect the assets of the company (including the amount (if any) due from the contributories), settle the list of creditors and, subject to the rights of preferred and secured creditors and to any subordination agreements or rights of set-off or netting of claims, discharge the company’s liability to them (pari passu if insufficient assets exist to discharge the liabilities in full) and to settle the list of contributories (shareholders) and divide the surplus assets (if any) amongst them in accordance with the rights attaching to the shares.

As soon as the affairs of the company are fully wound up, the liquidator must make up an account of the winding up, showing how the winding up has been conducted and the property of the company has been disposed of, and thereupon call a general meeting of the company for the purposes of laying before it the account and giving an explanation thereof. This final general meeting shall be called by Public Notice (as definedintheCompaniesLaw)orotherwise as the Registrar of Companies of the Cayman Islands may direct.

(xv) Reconstructions

There are statutory provisions which facilitate reconstructions and amalgamations approved by a majority in number representing seventy-five (75)% in value of shareholders or class of shareholders or creditors, as the case may be, as are present at a meeting called for such purpose and thereafter sanctioned by the Court. Whilst a dissenting shareholder would have the right to express to the Court his view that the transaction for which approval is sought would not provide the shareholders with a fair value for their shares, the Court is unlikely to disapprove the transaction on that ground alone in the absence of evidence of fraud or bad faith on behalf of management.

(xvi) Compulsory acquisition

Where an offer is made by a company for the shares of another company and, within four months of the offer, the holders of not less than ninety (90)% of the shares which are the subject of the offer accept, the offeror may at any time within two months after the expiration of the said four months, by

—V-20— APPENDIX V SUMMARY OF THE CONSTITUTION OF OUR COMPANY AND CAYMAN ISLANDS COMPANIES LAW

notice in the prescribed manner require the dissenting shareholders to transfer their shares on the terms of the offer. A dissenting shareholder may apply to the Court within one month of the notice objecting to the transfer. The burden is on the dissenting shareholder to show that the Court should exercise its discretion, which it will be unlikely to do unless there is evidence of fraud or bad faith or collusion as between the offeror and the holders of the shares who have accepted the offer as a means of unfairly forcing out minority shareholders.

(xvii)Indemnification

Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the court to be contrary to public policy (e.g. for purporting to provide indemnification against the consequences of committing a crime).

4. GENERAL

Conyers Dill & Pearman, our Company’s special legal adviser on Cayman Islands law, has sent to our Company a letter of advice summarizing certain aspects of Cayman Islands company law. This letter, together with a copy of the Companies Law, is availableforinspectionasreferredtointheparagraph headed ‘‘Documents available for inspection’’ in Appendix VII to this prospectus. Any person wishing to have a detailed summary of Cayman Islands company law or advice on the differences between it and the laws of any jurisdiction with which he is more familiar is recommended to seek independent legal advice.

—V-21— APPENDIX VI STATUTORY AND GENERAL INFORMATION

A. FURTHER INFORMATION ABOUT OUR GROUP

1. Incorporation

Our Company is incorporated in the Cayman Islands under the Companies Law as an exempted company with limited liability on February 8, 2007. We have been registered as an oversea company under Part XI of the Companies Ordinance and our principal place of business in Hong Kong is at Unit 4408, 44/F, COSCO Tower, 183 Queen’s Road Central, Hong Kong. Mr. Ling Shing Ping of Room F, 29/F, Block 1, San Po Kong Plaza, 33 Shung Ling Street, Kowloon, Hong Kong, a Hong Kong resident, has been appointed as the authorized representative of our Company for the acceptance of service of process and notices in Hong Kong.

As our Company is incorporated in the Cayman Islands, it operates subject to the relevant law of the Cayman Islands and its constitution which comprises a memorandum of association and an articles of association. A summary of the relevant aspects of the Companies Law and certain provisions of Articles of Association is set out in Appendix V to this prospectus.

2. Changes in share capital of our Company

(a) As at the date of incorporation of our Company, its authorized share capital was HK$50,000 divided into 500,000 shares of HK$0.10 each. On February 8, 2007, one Share of HK$0.10 of our Company was allotted and issued nil paid to Codan Trust Company (Cayman) Limited, which was subsequently transferred to Anta International. On the same date, 8,324, 700 and 975 nil paid shares were respectively allotted and issued to Anta International, Anda Investments and Anda Holdings.

(b) As consideration for the acquisition by us of the entire issued share capital of each of Anta Enterprise and Motive Force from Anta International, Anda Investments and Anda Holdings, (i) 1,298,700, 109,200, and 152,100 Shares were allotted and issued, to Anta International, Anda Investments and Anda Holdings respectively credited as fully paid and (ii) a total of 10,000 nil paid Shares held by Anta International, Anda Investments and Anda Holdings were credited as fully paid on June 16, 2007.

Immediately following completion of the Global Offering and the Capitalization Issue and assuming that the Over-allotment Option is not exercised, the authorized share capital of our Company will be HK$500,000,000 divided into 5,000,000,000 Shares, of which 2,400,000,000 Shares will be issued fully paid or credited as fully paid, and 2,600,000,000 Shares will remain unissued. Other than pursuant to the general mandate to issue Shares referred to in the paragraph headed ‘‘Written resolution of our shareholders passed on June 11, 2007’’ in this Appendix and pursuant to the Pre-IPO Share Option Scheme and the Share Option Scheme, we do not have any present intention to issue any of the authorized but unissued share capital of our Company and, without prior approval of our shareholders in general meeting, no issue of Shares will be made which would effectively alter the control of our Company.

Save as disclosed in this prospectus, there has been no alteration in our Company’s share capital since its incorporation.

— VI-1 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

3. Changes in share capital of the subsidiaries

The following alterations in the share capital or registered capital of the subsidiaries took place within the two years immediately preceding the date of this prospectus:

(a) Pursuant to a share transfer agreement dated July 19, 2005, Anda Hong Kong acquired from Mr. Ding Siren and Mr. Ding Shizhong 24.1% and 41.4% equity interests in ANTA China for an aggregate consideration of HK$95 million;

(b) On August 16, 2005, the registered capital of ANTA China was increased from HK$145 million to HK$245 million;

(c) Pursuant to a share transfer agreement dated February 20, 2007, Xiamen Investment acquired from Mr. Jin Wei, Mr. Pei Yongle and Ms. Ma Bingjie 20%, 5% and 5% equity interests in Shanghai Fengxian for the considerations of RMB4 million, RMB1 million and RMB1 million, respectively;

(d) Pursuant to a share transfer agreement dated February 21, 2007, Shanghai Fengxian acquired from (Guangzhou Anda Trading Development Co., Ltd.*) a 49% equity interest in Guangzhou Fengxian for a consideration of RMB2.45 million;

(e) Pursuant to a share transfer agreement dated February 21, 2007, Shanghai Fengxian acquired from (Jiangsu Zhonghe Trading Co., Ltd.*) a 49% equity interest in Jiangsu Fengxian for a consideration of RMB0.49 million;

(f) Pursuant to a share transfer agreement dated February 21, 2007, Shanghai Fengxian acquired from (Beijing Jiyuan Shengbao International Trading Co., Ltd.*) a 49% equity interest in Beijing Fengxian for a consideration of RMB2.45 million;

(g) Pursuant to a share transfer agreement dated February 25, 2007, Shanghai Fengxian acquired from Mr. Zhuang Zhiyong a 45% equity interest in Xiamen Fengxian for a consideration of RMB0.45 million; and

(h) Pursuant to a share transfer agreement dated February 27, 2007, Shanghai Fengxian acquired from (Harbin Jin Jian Sports Goods Trading Co., Ltd.*) a 40% equity interest in Harbin Fengxian for a consideration of RMB0.4 million.

Save as set out above and in the paragraph headed ‘‘Corporate Reorganization’’ under this section in this appendix, there has been no alteration in the share capital of any of the subsidiaries of our Company within the two years immediately preceding the date of this prospectus.

— VI-2 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

4. Written resolutions of our Shareholders passed on June 11, 2007

Pursuant to the written resolutions of all shareholders entitled to vote at general meetings of our Company,whichwerepassedonJune11,2007:

(a) the authorized share capital of our Company be increased from HK$50,000 to HK$500,000,000 by the creation of 4,999,500,000 Shares of HK$0.10 each which rank pari passu in all respects with the Shares in issue as at the date of passing of this written resolution;

(b) our Directors were authorized to credit as fully paid at par the aggregate 10,000 nil paid Shares held by Anta International, Anda Holdings and Anda Investments and allot and issue 1,298,700, 152,100 and 109,200 Shares, credited as fully paid, to Anta International, Anda Holdings and Anda Investments, respectively, as consideration for the acquisition of the entire issued share capitals of Anta Enterprise and Motive Force;

(c) conditional on the share premium account of our Company being credited as a result of the Global Offering, the sum of HK$179,843,000 be capitalized and be applied in paying up in full at par 1,798,430,000 Shares for allotment and issue to the Shareholders whose names were on the register of members of our Company as at the close of business on June 11, 2007 and the Shares to be allotted and issued pursuant to this resolution shall rank pari passu in all respects with the existing issued Shares;

(d) conditional on (i) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Shares in issue and to be issued (pursuant to the Global Offering, the Capitalization Issue, the Over-allotment Option, the Pre-IPO Share Option Scheme and the Share Option Scheme) as mentioned in the Prospectus; and (ii) the obligations of the Underwriters under the Underwriting Agreements becoming unconditional (including, if relevant, as a result of the waiver of any condition(s) by the Global Coordinator (on behalf of the Underwriters)) and the Underwriting Agreements not being terminated in accordance with their terms or otherwise:

(i) the Global Offering and the Over-allotment Option were approved and our Directors were authorized to allot and issue the OfferSharesandtheSharesasmayberequired to be allotted and issued upon the exercise of the Over-allotment Option on and subject to the terms and conditions stated in this prospectus and in the relevant application forms;

(ii) the rules of the Pre-IPO Share Option Scheme, the principal terms of which are set out in the paragraph headed ‘‘Pre-IPO Share Option Scheme’’ in this Appendix were approved and adopted and the Directors were authorized to grant options to subscribe for Shares thereunder and to allot and issue Shares pursuant to the exercise of options granted under the Pre-IPO Share Option Scheme and to take all such actions as they consider necessary and/or desirable to implement and give effect to the Pre-IPO Share Option Scheme;

(iii) the rules of the Share Option Scheme were approved and adopted, and the Directors or any committee thereof established by the Board were authorized, at their sole discretion, to: (i) administer the Share Option Scheme; (ii) modify/amend the Share Option Scheme from time to time as requested by the Stock Exchange; (iii) grant options to subscribe for Shares under the Share Option Scheme up to the limits

— VI-3 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

referred to in the Share Option Scheme; (iv) allot, issue and deal with Shares pursuant to the exercise of any option which may be granted under the Share Option Scheme; (v) make application at the appropriate time or times to the Stock Exchange forthelistingof,andpermissiontodealin,anySharesoranypartthereofthatmay hereafter from time to time be issued and allotted pursuant to the exercise of the options granted under the Share Option Scheme; and (vi) take all such actions as they consider necessary, desirable or expedient to implement or give effect to the Share Option Scheme;

(e) a general unconditional mandate be and is hereby given to our Directors to exercise all the powers of our Company to allot, issue and deal with (including the power to make an offer or agreement, or grant securities which would or might require Shares to be allotted and issued), otherwise than by way of Rights Issue, or pursuant to any scrip dividend schemes or similar arrangements providing for the allotment and issue of Shares in lieu of the whole or part of a dividend on Shares in accordance with the Articles or pursuant to the issue of Shares upon the exercise of any subscription rights attached to any warrants of our Company or pursuant to the exercise of options which have been granted under the Pre-IPO ShareOptionSchemeandmaybegrantedundertheShareOptionSchemeoranyother option scheme(s) or similar arrangement for the time being adopted for the grant or issue to directors and/or officers and/or employees of our Group or rights to acquire Shares or pursuant to a specific authority granted by the Shareholders in general meeting, the Shares with an aggregate nominal amount not exceeding 20% of the aggregate nominal amount of the share capital of our Company in issue immediately following completion of the Global Offering and the Capitalization Issue before any exercise of the Over-allotment Option;

For the purpose of this paragraph, ‘‘Rights Issue’’ means an offer of shares in our Company, or offer or issue of warrants, options or other securities giving rights to subscribe for shares open for a period fixed by our Directors to holders of shares in our Company on the register on a fixed record date in proportion to their holdings of shares (subject to such exclusion or other arrangements as our Directors may deem necessary or expedient in relation to fractional entitlements, or having regard to any restrictions or obligations under the laws of, or the requirements of, or the expense or delay which may be involved in determining the existence or extent of any restrictions or obligations under the laws of, or the requirements of, any jurisdiction applicable to our Company, or any recognized regulatory body or any stock exchange applicable to our Company);

(f) a general unconditional mandate be and is hereby given to our Directors to exercise all powers of our Company to repurchase on the Stock Exchange, or on any other stock exchange on which the securities of our Company may be listed and which is recognized by the SFC and the Stock Exchange for this purpose, such number of Shares with an aggregate nominal value not exceeding 10% of the aggregate nominal amount of the share capital of our Company in issue immediately following completion of the Global Offering and the Capitalization Issue but before the exercise of the Over-allotment Option;

(g) the extension of the general mandate to allot, issue and deal with Shares as mentioned in paragraph (e) above by the addition to the aggregate nominal value of the share capital of our Company which may be allotted or agreed conditionally or unconditionally to be allotted by our Directors pursuant to such general mandate of an amount representing the aggregate nominal value of the share capital of our Company repurchased by our Company pursuant to paragraph (f) above, provided that such extended amount shall not exceed 10%

— VI-4 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

of the aggregate of the total nominal value of the share capital of our Company in issue immediately following the Global Offering and the Capitalization Issue but before the exercise of the Over-allotment Option be and is approved; and

(h) the adoption of the Articles of Association.

Each of the general mandates referred to in paragraphs (e), (f) and (g) above will remain in effect until whichever is the earliest of:

(1) the conclusion of our next annual general meeting, unless renewed by an ordinary resolution of our shareholders in a general meeting, either unconditionally or subject to conditions;

(2) the expiration of the period within which we are required by any applicable law or the Articles of Association to hold our next annual general meeting; or

(3) the time when such mandate is varied or revoked by an ordinary resolution of our shareholders in a general meeting.

5. Repurchase of our Shares

This section includes information relating to the repurchases of securities, including information required by the Stock Exchange to be included in this prospectus concerning such repurchase.

(a) Provisions of the Listing Rules

The Listing Rules permit companies whose primary listing is on the Stock Exchange to repurchase their securities on the Stock Exchange subject to certain restrictions, the most important restrictions are summarized below:

(i) Shareholders’ approval

All proposed repurchases of Shares must be approved in advance by an ordinary resolution of the Shareholders in a general meeting, either by way of general mandate or by specific approval in relation to a particular transaction.

Pursuant to the written resolutions passed on June 11, 2007 by all our shareholders, a general unconditional mandate (the ‘‘Repurchase Mandate’’) was given to our Directors to exercise all powers of our Company to repurchase Shares (Shares which may be listed on the Stock Exchange) with a total nominal value of not more than 10% of the aggregate nominal value of our share capital in issue or to be issued immediately following the completion of the Global Offering, details of which have been described above in the paragraph headed ‘‘Written resolutions of our shareholders passed on June 11, 2007’’.

(ii) Source of funds

Any repurchases of Shares by us must be paid out of funds legally available for the purpose in accordance with our Articles of Association, the Listing Rules and the Companies Law. We are not permitted to repurchase our Shares on the Stock Exchange for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange from time to time.

— VI-5 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

(iii) Shares to be repurchased

The Listing Rules provide that the Shares which are proposed to be repurchased by us must be fully-paid up.

(2) Reasons for repurchases

Our Directors believe that it is in the best interests of our Company and our shareholders for our Directors to have general authority from the shareholders to enable them to repurchase Shares in the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value per Share and/or earnings per Share and will only be made where the Directors believe that such repurchases will benefit our Company and our shareholders.

(3) Funding of repurchases

In repurchasing Shares, we may only apply funds legally available for such purpose in accordance with the Articles of Association, the Listing Rules and the applicable laws and regulations of the Cayman Islands.

On the basis of Company’s current financial position as disclosed in this prospectus and taking into account its current working capital position, our Directors consider that, if the Repurchase Mandate is exercised in full, it might have a material adverse effect on our working capital and/or gearing position as compared with the position disclosed in this prospectus. However, our Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on our working capital requirements or the gearing levels which in the opinion of our Directors are from time to time appropriate for us.

(4) General

None of our Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates (as defined in the Listing Rules) currently intends to sell any Shares to us.

Our Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Repurchase Mandate in accordance with the Listing Rules and the applicable laws and regulations of the Cayman Islands.

If, as a result of any repurchase of Shares, a shareholder’s proportionate interest in the voting rights is increased, such increase will be treated as an acquisition for the purposes of the Hong Kong Code on Takeovers and Mergers (the ‘‘Takeovers Code’’). Accordingly, a shareholder or a group of shareholders acting in concert could obtain or consolidate control of us and become obliged to make a mandatory offer in accordance with rule 26 of the Takeovers Code. Save as aforesaid, our Directors are not aware of any consequences which would arise under the Takeovers Code as a consequence of any repurchases pursuant to the Repurchase Mandate.

We have not made any repurchases of our own securities in the past six months.

— VI-6 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

No Connected Person has notified us that he/she has a present intention to sell Shares to us, or has undertaken not to do so, if the Repurchase Mandate is exercised.

B. CORPORATE REORGANIZATION

The Corporate Reorganization which was effected in preparation for the Listing, whereby our Company became the holding company of our Group, included the following major steps:

(a) With a view to consolidate all footwear production facilities into ANTA China, ANTA China and ANTA Fujian entered into an asset purchase agreement on July 30, 2006 pursuant to which ANTA China acquired from ANTA Fujian the production facilities for sports footwear for a consideration of RMB3,523,535 determined based on an asset valuation conducted by a PRC independent valuer.

(b) Since ANTA Fujian will not be part of our Group after the Corporate Reorganization it entered into a trademark transfer agreement dated August 5, 2006 with ANTA China to transfer trademarks and trademark applications registered under its name in the PRC and other overseas jurisdictions related to our business to ANTA China. As a transitional arrangement, ANTA Fujian granted an irrevocable license to us to use such trademarks before the completion of the administrative procedures for such transfers.

(c) The Controlling Shareholders incorporated Anta International, Anda Investments, Anda Holdings, Anta Enterprise and Motive Force as investment holding vehicles on August 22, 2006.

(d) On September 19, 2006, Mr. Ding Shizhong transferred to the other Controlling Shareholders the number of shares in Anda Hong Kong as indicated below:

Number of Shares in Member of Controlling Shareholders Anda Hong Kong

Mr. Ding Shijia...... 340,000 Ms.DingYali...... 97,500 Mr.WangWenmo...... 95,000 Mr.DingHemu...... 70,000 Mr.WuYonghua...... 50,000 Mr.KeYufa...... 2,500

(e) ANTA Jinjiang was responsible for our accessories business before ANTA China became a major operating subsidiary of our Group and took over the accessories business. As a result of the above mentioned change, ANTA Jinjiang ceased its business operation towards the end of the Track Record Period and it was dissolved on November 15, 2006 when its business license was cancelled.

(f) The following companies were incorporated:

. ANTA Changting is wholly owned by Anda Hong Kong and was incorporated as a wholly foreign-owned enterprise in the PRC on February 20, 2006 with a registered capital of HK$30 million. ANTA Changting was set up for the purpose of establishing our internal apparel production facilities;

— VI-7 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

. Xiamen Investment is wholly owned by ANTA China and was incorporated as a limited liability company on June 1, 2006 with a registered capital of RMB50 million. Xiamen Investment was set up as an investment holding company;

. ANTAXiameniswhollyownedbyAndaHongKongandwasincorporatedasawholly foreign-owned enterprise in the PRC on August 14, 2006 with a registered capital of HK$20 million. ANTA Xiamen was set up for the purpose of establishing our internal apparel production facilities;

. Keen Power is wholly owned by Anta Enterprise and was incorporated as a limited liability companyinHongKongonAugust17,2006withanauthorizedsharecapitalofHK$10,000 divided into 10,000 shares of HK$1.00 each. Keen Power was set up as an overseas subsidiary responsible for co-ordination of our Group’s overseas operations and administrative functions;

. Shanghai Fengxian is wholly owned by Xiamen Investment and was established as a limited liability company in the PRC on October 20, 2006 with a registered capital of RMB20 million. Shanghai Fengxian was established to engage in the sportswear retail business selling adidas, Reebok and Kappa branded products;

. Suzhou Fengxian is wholly owned by Shanghai Fengxian and was established as a limited liability company on December 26, 2006 with a registered capital of RMB1 million. It was established to operate and manage our retail outlets in different cities;

. Harbin Fengxian is wholly owned by Shanghai Fengxian and was established as a limited liability company on January 8, 2007 with a registered capital of RMB1 million. It was established to operate and manage our retail outlets in different cities;

. ANTA Quanzhou is wholly owned by Anda Hong Kong and was established as a wholly foreign-owned enterprise on January 16, 2007 with a registered capital of HK$5 million. It was established for the purpose of expansion of our production capacity of sports footwear;

. Xiamen Trading is wholly owned by Motive Force and was established as a wholly foreign-owned enterprise on January 18, 2007 with a registered capital of HK$5 million. It was established to act as the sales and trading center of our products;

. Xiamen Fengxian is wholly owned by Shanghai Fengxian and was established as a limited liability company on January 22, 2007 with a registered capital of RMB1 million. It was established to operate and manage our retail outlets in different cities;

. Beijing Fengxian is wholly owned by Shanghai Fengxian and was established as a limited liability company on January 25, 2007 with a registered capital of RMB5 million. It was established to operate and manage our retail outlets in different cities; and

. Guangzhou Fengxian is wholly owned by Shanghai Fengxian and was established as a limited liability company on February 7, 2007, with a registered capital of RMB5 million. It was established to operate and manage our retail outlets in different cities.

(g) As part of the Corporate Reorganization, Mr. Ding Shizong entered into a patent and patent application transfer agreement dated December 18, 2006 with ANTA China to transfer patents and patent applications registered and applied under his name in the PRC to ANTA China. As a

— VI-8 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

transitional arrangement, Mr. Ding Shizhong granted an irrevocable license to us to use such patents before the completion of administrative procedures for such transfers. The transfer of the relevant patents and patent applications were completed in May 2007.

(h) On February 8, 2007, our Company was incorporated under the laws of the Cayman Islands as an exempted company and it allotted and issued one nil paid Share to Codan Trust Company (Cayman) Limited. The Share was transferred to Anta International on the same date and the following Shares of our Company were issued nil paid to the relevant investment vehicles of the Controlling Shareholders:

Name of Shareholders Number of Shares Issued

AntaInternational...... 8,324 AndaHoldings...... 975 AndaInvestments...... 700

(i) On April 4, 2007, the Controlling Shareholders and Anta Enterprise entered into agreements for the sale and purchase of the entire issued share capital of Anda Hong Kong and shareholders’ loans of an aggregate amount of approximately HK$144.4 million provided by our Controlling Shareholders in proportion to their shareholdings in Anda Hong Kong for an aggregate nominal consideration of HK$2.0.

(j) On June 16, 2007, Anta International, Anda Holdings and Anda Investments entered into a sale and purchase agreement with our Company to sell the entire issued share capital in each of Anta Enterprise and Motive Force to us in consideration of our Company (i) allotting and issuing 1,298,700, 152,100 and 109,200 Shares, credited as fully paid, to Anta International, Anda Holdings and Anda Investments, respectively; and (ii) crediting as fully paid at par 8,325, 975 and 700 nil paid Shares held by Anta International, Anda Holdings and Anda Investments respectively.

(k) Conditional on the share premium account of our Company being credited as a result of the Global Offering, the sum of HK$179,843,000 will be capitalized and applied in paying up in full at par 1,497,192,975, 175,346,925 and 125,890,100 Shares for allotment and issue to Anta International, Anda Holdings and Anda Investments and such Shares to be allotted and issued shall rank pari passu in all respects with the then existing issued Shares of our Company.

C. FURTHER INFORMATION ABOUT OUR BUSINESS

1. Summary of the Material Contracts

The following contracts (not being contracts entered into in the ordinary course of business) were entered into by our Group within the two years preceding the date of this prospectus and are or may be material:

(a) A share transfer agreement in Chinese dated July 19, 2005 entered into between (On Tap Enterprise Co.*) (the trading name of Mr. Ding Siren), (Anda International Trade Investment Co.*) (the trading name of Mr. Ding Shizhong) and Anda Hong Kong for the transfer of 24.1% and 41.4% equity interests in ANTA China to Anda Hong Kong for an aggregate consideration of HK$95 million;

— VI-9 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

(b) An asset acquisition agreement in Chinese dated July 30, 2006 and entered into between ANTA China and ANTA Fujian for the acquisition of the principal manufacturing equipment and facilities from ANTA Fujian for a consideration of RMB3,523,535;

(c) A trademark transfer agreement in Chinese dated August 5, 2006 between ANTA China and ANTA Fujian pursuant to which ANTA Fujian transferred its registered trademarks and its rights in trademark applications related to our business operation in the PRC and other overseas jurisdictions to ANTA China at nil consideration;

(d) A patent and patent application transfer agreement in Chinese dated December 18, 2006 between ANTA China and Mr. Ding Shizhong pursuant to which Mr. Ding Shizhong transferred to ANTA China patents and patent applications registered and applied related to our business under his name at nil consideration;

(e) A trademark license agreement dated January 17, 2007 and its supplemental agreement both in Chinese and between ANTA China and ANTA Fujian pursuant to which ANTA Fujian granted an irrevocable license to ANTA China to use the relevant trademarks at nil consideration;

(f) A patent license agreement dated January 17, 2007 and its supplemental agreement both in Chinese and between ANTA China and Mr. Ding Shizhong pursuant to which Mr. Ding Shizhong granted an irrevocable license to ANTA China to use the relevant patents at nil consideration;

(g) A share transfer agreement in Chinese dated February 20, 2007 entered into between Xiamen Investment, Mr. Jin Wei, Mr. Pei Yongle and Ms. Ma Bingjie, pursuant to which Mr. Jin Wei, Mr. Pei Yongle and Ms. Ma Bingjie transferred 20%, 5% and 5% of equity interest respectively in Shanghai Fengxian to Xiamen Investment for the considerations of RMB4 million, RMB1 million and RMB1 million respectively;

(h) A share transfer agreement in Chinese dated February 21, 2007 entered into between Shanghai Fengxian and (Guangzhou Anda Trading Development Co., Ltd.*), pursuant to which Guangzhou Anda Trading Development Co., Ltd. transferred its 49% of equity interest in Guangzhou Fengxian to Shanghai Fengxian for a consideration of RMB2.45 million;

(i) A share transfer agreement in Chinese dated February 21, 2007 entered into between Shanghai Fengxian and (Jiangsu Zhonghe Trading Co., Ltd.*) pursuant to which Jiangsu Zhonghe Trading Co., Ltd. transferred its 49% equity interest in Jiangsu Fengxian to Shanghai Fengxian for a consideration of RMB0.49 million;

(j) A share transfer agreement in Chinese dated February 21, 2007 entered into between Shanghai Fengxian and (Beijing Jiyuan Shengbao International Trading Co., Ltd.*) pursuant to which Beijing Jiyuan Shengbao International Trading Co., Ltd. transferred its 49% equity interest in Beijing Fengxian to Shanghai Fengxian for a consideration of RMB2.45 million;

(k) A share transfer agreement in Chinese dated February 25, 2007 entered into between Shanghai Fengxian and Mr. Zhuang Zhiyong pursuant to which Mr. Zhang Zhiyong transferred his 45% of equity interest in Xiamen Fengxian to Shanghai Fengxian for a consideration of RMB0.45 million;

— VI-10 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

(l) A share transfer agreement in Chinese dated February 27, 2007 entered into between Shanghai Fengxian and (Harbin Jinjian Sports Products Trading Co., Ltd.*), pursuant to which Harbin Jinjian Sports Products Trading Co., Ltd. transferred its 40% of equity interest in Harbin Fengxian to Shanghai Fengxian for a consideration of RMB0.40 million;

(m) A share transfer agreement dated April 4, 2007 entered into between Anta Enterprise, Mr. Ding Shizhong, Mr. Ding Shijia, Ms. Ding Yali,Mr.WangWenmo,Mr.DingHemu,Mr. Wu Yonghua and Mr. Ke Yufa pursuant to which Anta Enterprise acquired the entire issued share capital of Anda Hong Kong for a consideration of HK$1.00;

(n) A deed of assignment of shareholders’ loans dated April 4, 2007 entered into between Anta Enterprise, Mr. Ding Shizhong, Mr. Ding Shijia, Ms. Ding Yali, Mr. Wang Wenmo, Mr. Ding Hemu, Mr. Wu Yonghua and Mr. Ke Yufa pursuant to which Anta Enterprise acquired the shareholders’ loans of HK$144,375,769.26 for a consideration of HK$1.00;

(o) A corporate placing agreement dated June 15, 2007, entered into between Grahamstowe Investments Limited, Mr. Leslie Lee Alexander (as guarantor), our Company and the Global Coordinator, pursuant to which Grahamstowe Investments Limited agreed to subscribe for such number of Shares as is equal to HK$234.51 million divided by the Offer Price (rounded down to the nearest board lot of 1,000 Shares) in the International Placing (without taking into account any Shares that may be issued pursuant to the Over-allotment Option);

(p) An sale and purchase agreement dated June 16, 2007 entered into between our Company, Anta International, Anda Holdings, Anda Investments, Mr. Ding Shizhong and Mr. Ding Shijia pursuant to which our Company acquired the entire issued share capital of each of Anta Enterprise and Motive Force in consideration and in exchange for which our Company allotted and issued 1,298,700, 152,100 and 109,200 Shares, credited as fully paid;

(q) A deed of indemnity dated June 16, 2007 entered into between Anta International, Mr. Ding Shizhong and Mr. Ding Shijia and our Company for itself and as trustee for its subsidiaries, under which Anta International, Mr. Ding Shizhong and Mr. Ding Shijia have given certain indemnities in favor of our Group containing, among others, the indemnities referred to the sub-paragraph headed ‘‘Estate Duty and Tax Indemnity’’ under the paragraph headed ‘‘Other Information’’ in this Appendix; and

(r) The Hong Kong Underwriting Agreement dated June 25, 2007 entered into between our Company, the Covenantors, the Global Coordinator and the Hong Kong Underwriters.

— VI-11 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

2. Intellectual Property Rights of our Group

Trademarks

As at the Latest Practicable Date, we have the right to use the following trademarks:

Registration Trademark Place of Registration Class Number Expiry Date

(1) ...... PRC 25 1009204 May 20, 2007

...... PRC 25 1333427 November 13, 2009

...... PRC 18 1375588 March 20, 2010

...... PRC 28 1378177 March 27, 2010

...... PRC 25 1384238 April 13, 2010

...... PRC 25 1387240 April 20, 2010

...... PRC 25 1387241 April 20, 2010

...... PRC 25 1387242 April 20, 2010

...... PRC 25 1387243 April 20, 2010

...... PRC 28 1688595 December 27, 2011

...... PRC 28 1724794 March 6, 2012

...... PRC 18 1765971 May 13, 2012

...... PRC 25 2007375 January 13, 2013

...... PRC 25 2007377 January 13, 2013

...... PRC 25 3543908 July 20, 2015

...... PRC 25 547903March29,2011

...... PRC 25 839669May13,2016

...... PRC 25 839670May13,2016

...... PRC 25 1333426 November 13, 2009

(2)...... Taiwan 18 01115844 August 15, 2014

(2)...... Taiwan 25 01116080 August 15, 2014

(2)...... Taiwan 28 01214440 June 15, 2016

(2)...... HongKong 18,25 300292383 September 25, 2014

— VI-12 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

Registration Trademark Place of Registration Class Number Expiry Date

(2)...... Macau 18 N/014780December7,2011

(2)...... Macau 25 N/014781December7,2011

(2) ...... NewZealand 25 616380June8,2017

(2)...... USA 25 2,750,817 August 11, 2013

(2)...... Canada 25 TMA675,433 October 23, 2021

(2)...... Israel 25 177683January17,2015

(2) ...... Kuwait 25 56599February12,2015

...... MadridInternationalRegistration(3) 18, 25, 26 755076 March 6, 2011

...... MadridInternationalRegistration(4) 25 764381 August 28, 2011

...... MadridInternationalRegistration(5) 18, 25, 28 858656 October 9, 2014

...... Thailand 25 Kor229432February16,2015

...... Cambodia 25 21188/05 January 25, 2015

...... UAE 25 56559February26,2015

...... SaudiArabia 25 803/45 October 20, 2014

...... Panama 18 13729001September6,2014

...... Panama 25 13728901September6,2014

...... Mexico 25 878375February16,2015

...... Peru 18 00105929 May 27, 2015

...... Bolivia 18 107282-C February 7, 2017

...... Bolivia 25 107281-C February 7, 2017

...... Columbia 25 322563October24,2016

— VI-13 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

Notes:

(1) We are applying for the extension of registration period of this trademark.

(2) We have entered into a trademark transfer agreement to acquire the above trademarks from ANTA Fujian and were granted an irrevocable license to use the above trademarks by ANTA Fujian, at nil consideration until the date of completion of the transfer of these trademarks to our Group. As at the latest Practicable Date, the transfers of those trademarks have been completed.

(3) Places of registration include Algeria, Austria, Belarus, Bulgaria, Croatia, Egypt (class 18), France, Hungary (class 18), Italy, Kazakhstan, Kyrgyzstan, Mongolia, Uzbekistan, Poland (class 25 and 26), Portugal, Democratic People’s Republic of Korea (class 25 and 26), Czech, Romania, Slovakia, Switzerland, Ukraine and Vietnam.

(4) Places of registration include Germany, Austria, Bulgaria, Cuba, Spain, Russia, France, Hungary, Italy, Mongolia, Poland, Portugal, Czech, Romania and Switzerland.

(5) Places of registration include Benelux, Democratic People’s Republic of Korea, Morocco, Mozambique, Republic of Moldora, San Marino, Australia, Denmark, Georgia, Ireland, Norway, Republic of Korea, Singapore, Turkey and United Kingdom.

As at the Latest Practicable Date, applications have been made for the registration of the following trademarks:

Place of Trademark Application Class Application Number Application Date

...... PRC 18 4879774 September 5, 2005

...... PRC 18 4879775 September 5, 2005

...... PRC 18 4879776 September 5, 2005

...... PRC 18 4879777 September 5, 2005

...... PRC 25 4879753 September 5, 2005

...... PRC 25 4879786 September 5, 2005

...... PRC 25 4879787 September 5, 2005

...... PRC 25 4879788 September 5, 2005

...... PRC 25 4879789 September 5, 2005

...... PRC 18 4879759 September 5, 2005

...... PRC 28 4879771 September 5, 2005

...... PRC 28 4879898 September 5, 2005

...... PRC 28 4879899 September 5, 2005

— VI-14 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

Place of Trademark Application Class Application Number Application Date

...... PRC 28 4879900 September 5, 2005

...... PRC 28 4879902 September 5, 2005

...... PRC 28 5604926 September 14, 2006

...... PRC 25 5604927 September 14, 2006

...... PRC 18 5604928 September 14, 2006

...... PRC 25 5604929 September 14, 2006

...... PRC 25 5604930 September 14, 2006

...... PRC 25 5790745 December 18, 2006

. PRC 25 5790739 December 18, 2006

...... PRC 25 5790740 December 18, 2006

...... PRC 25 5790741 December 18, 2006

...... PRC 25 5790742 December 18, 2006

...... PRC 25 5790743 December 18, 2006

.... PRC 25 5790744 December 18, 2006

...... PRC 25 5790745 December 18, 2006

...... PRC 25 5790746 December 18, 2006

...... PRC 25 5790747 December 18, 2006

.... PRC 25 5790748 December 18, 2006

...... PRC 25 5790749 December 18, 2006

...... PRC 25 5790750 December 18, 2006

...... PRC 25 5790751 December 18, 2006

...... Peru 25 310611 April 3, 2007

...... Chile 25 759538 January 22, 2007

(Note) ...... PRC 25 3623739 July 8, 2003

(Note) ...... Philippines 25 04-2006-008929 August 14, 2006

— VI-15 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

Place of Trademark Application Class Application Number Application Date

(Note) ...... Philippines 18 4-2004-009482 October 11, 2004

(Note) ...... Indonesia 25 D00-2005-01762-01772 January 20, 2005

(Note) ...... Brazil 25 826969925 January 20, 2005

(Note) ...... Argentina 25 2569833 February 3, 2005

(Note) ...... Ecuador 18 148449 September 6, 2004

(Note) ...... Ecuador 25 148448 September 6, 2004

Note: These applications have been made by ANTA Fujian with the relevant authorities. We have entered into a trademark transfer agreement to acquire the rights in the above trademark applications from ANTA Fujian, and were granted an irrevocable license by ANTA Fujian to use the trademarks at nil consideration until the date of completion of the transfer of the trademark applications to our Group.

Domain Names

As at the Latest Practicable Date, we have registered the following domain names:

Registrant Domain Name Date of Registration

ANTAChina...... anta.com October15,1998 ANTAChina...... anta.mobi September22,2006 ANTAChina...... anta.com.cn June3,2003 ANTAChina...... anta.cn March17,2003 ANTAChina...... November 30, 2004 ANTAChina...... cn November 30, 2004 AndaHongKong...... anta.com.hk July24,2006 ShanghaiFengxian...... sh-frontline.com.cn November 22, 2006 ShanghaiFengxian...... sh-frontline.cn November 22, 2006

— VI-16 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

Patents

As at the Latest Practicable Date, we are the registered owner of the following patents:

Place of Type Registration Patent Number Effective Period

Utility Model ...... PRC 02256877.8 September30,2002to September 29, 2012 Utility Model ...... PRC 200420012964.X December18,2004to December 18, 2014 Utility Model ...... PRC 200520117714.7 September9,2005to September 8, 2015 Design...... PRC 200530119656.7 August17,2005to August 16, 2015 Design...... PRC 200530119672.6 August17,2005to August 16, 2015 Design...... PRC 200530119673.0 August17,2005to August 16, 2015 Design...... PRC 200530119668.X August16,2005to August 15, 2015 Design...... PRC 200530119667.5 August16,2005to August 15, 2015 Design...... PRC 200530003846.2 January28,2005to January 27, 2015 Design...... PRC 200530001955.0 January27,2005to January 26, 2015 Design...... PRC 200530119666.0 August16,2005to August 15, 2015 Design...... PRC 200530124279.6 August22,2005to August 21, 2015

As at the Latest Practicable Date, we have made applications for the registration of the following patents:

Place of Type Application Application Number Application Date

Utility Model ...... PRC 200620124246.0 June29,2006 Utility Model ...... PRC 200620124245.6 June29,2006 Utility Model ...... PRC 200620147034.4 October20,2006 Utility Model ...... PRC 200620147776.7 October17,2006 Design...... PRC 200630147943.3 September26,2006 Design...... PRC 200630147940.X September26,2006 Design...... PRC 200630147941.4 September26,2006 Design...... PRC 200630147939.7 September26,2006 Design...... PRC 200630147942.9 September26,2006 Design...... PRC 200630144900.X September26,2006 Design...... PRC 200630147944.8 September26,2006 Invention...... PRC 200610146093.4 November16,2006

— VI-17 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

3. Further information about our PRC establishments

(a) ANTA China

(i) nature of the company: wholly foreign-owned enterprise (ii) term of business operation: 50 years commencing on August 16, 2000 and expiring on August 16, 2050 (iii) total investment: HK$255,000,000 (iv) registered capital: HK$245,000,000 (v) attributable interest of the company: 100% (vi) scope of business: Manufacturing sports, plastics and rubber footwear, knitting wears, apparel, hats, leather cases, bags, sports goods, footwear materials and the businesses related to the design services of footwear and apparel

(b) ANTA Changting

(i) nature of the company: wholly foreign-owned enterprise (ii) term of business operation: 30 years commencing on February 20, 2006 and expiring on February 19, 2036 (iii) total investment: HK$50,000,000 (iv) registered capital: HK$30,000,000 (v) attributable interest of the company: 100% (vi) scope of business: Manufacturing sports, plastics and rubber footwear, knitting wears, apparel, hats, leather cases, bags, sports goods, footwear materials and the businesses related to the design services of footwear and apparel

(i) nature of the company: wholly foreign-owned enterprise (ii) term of business operation: 30 years commencing on January 16, 2007 and expiring on January 15, 2037 (iii) total investment: HK$5,000,000 (iv) registered capital: HK$5,000,000 (v) attributable interest of the company: 100% (vi) scope of business: Manufacturing footwear, apparel knitting wears, textile, leather cases, bags, hats, footwear materials, sports goods and design services

(d) ANTA Xiamen

(i) nature of the company: wholly foreign-owned enterprise (ii) term of business operation: 30 years commencing on August 14, 2006 and expiring on August 13, 2036 (iii) total investment: HK$20,000,000

— VI-18 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

(iv) registered capital: HK$20,000,000 (v) attributable interest of the company: 100% (vi) scope of business: Manufacturing apparel, knitwear, textile, leather cases, bags, hats, sports goods and the design services

(e) Xiamen Trading

(i) nature of the company: wholly foreign-owned enterprise (ii) term of business operation: 30 years commencing on January 18, 2007 and expiring on January 17, 2037 (iii) total investment: HK$5,000,000 (iv) registered capital: HK$5,000,000 (v) attributable interest of the company: 100% (vi) scope of business: wholesaling and exporting & importing of sports goods, footwear, hats, apparel, socks, cases, bags and sports equipment

(f) Xiamen Investment

(i) nature of the company: limited liability company (ii) term of business operation: 20 years commencing on June 1, 2006 and expiring on May 31, 2026 (iii) registered capital: RMB50,000,000 (iv) attributable interest of the company: 100% (v) scope of business: project investment management, business management advisory services

(g) Shanghai Fengxian

(i) nature of the company: limited liability company (ii) term of business operation: 20 years commencing on October 20, 2006 and expiring on October 19, 2026 (iii) registered capital: RMB20,000,000 (iv) attributable interest of the company: 100% (v) scope of business: sale of Sports goods, sports equipment and general merchandise

(h) Beijing Fengxian

(i) nature of the company: limited liability company (ii) term of business operation: 20 years commencing on January 25, 2007 and expiring on January 24, 2027 (iii) registered capital: RMB5,000,000 (iv) attributable interest of the company: 100% (v) scope of business: sale of sports goods, stationery, general merchandise, apparel, knitwear, hardware & electric products, construction materials and industrial arts products

— VI-19 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

(i) Guangzhou Fengxian

(i) nature of the company: limited liability company (ii) term of business operation: commencing on February 7, 2007 and expiring on December 20, 2016 (iii) registered capital: RMB5,000,000 (iv) attributable interest of the company: 100% (v) scope of business: wholesaling and retailing of sports goods

(j) Harbin Fengxian

(i) nature of the company: limited liability company (ii) term of business operation: 3 years commencing on January 8, 2007 and expiring on January 7, 2010 (iii) registered capital: RMB1,000,000 (iv) attributable interest of the company: 100% (v) scope of business: purchasing and sale of sports goods, sports equipment, apparel, footwear, hats, office products, general merchandise

(k) Suzhou Fengxian

(i) nature of the company: limited liability company (ii) term of business operation: 10 years commencing on December 26, 2006 and expiring on December 25, 2016 (iii) registered capital: RMB1,000,000 (iv) attributable interest of the company: 100% (v) scope of business: sale of sports goods, sports equipment and general merchandise

(l) Xiamen Fengxian

(i) nature of the company: limited liability company (ii) term of business operation: 50 years commencing on January 22, 2007 and expiring on January 21, 2057 (iii) registered capital: RMB1,000,000 (iv) attributable interest of the company: 100% (v) scope of business: wholesaling and retailing of sports goods, apparel, footwear and hats

D. FURTHER INFORMATION ABOUT THE DIRECTORS

1. Directors’ service contracts

Each of our Directors has entered into a service contract with us for an initial fixed term of three years commencing from the Listing Date and will continue thereafter until terminated by not less than three months’ notice in writing served by either party on the other, which notice shall not expire until after the fixed term.

— VI-20 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

Each of our Directors is entitled to the respective basic salary set out below. Each of the executive Directors is also entitled to a discretionary bonus, provided that the aggregate amount of the bonuses payable to all our executive Directors in respect of any financial year may not exceed 5% of our audited consolidated or combined net profit (after taxation and minority interests and payment of such bonuses but excluding extraordinary and exceptional items) in respect of that financial year. An executive Director may not vote on any resolution of our Directors regarding the increment of annual salary and the amount of the discretionary bonus payable to him.

The current basic annual salaries of the executive Directors are as follows:

Name Annual Amount

Mr.DingShizhong...... RMB1,080,000 Mr. Ding Shijia...... RMB500,000 Mr.LaiShixian...... RMB500,000 Mr.WangWenmo...... RMB500,000 Mr.WuYonghua...... RMB500,000 Mr.YeungChiTat...... HK$240,000 Mr.WongYingKuen,Paul...... HK$160,000 Mr.LuHongTe...... HK$160,000

Save as aforesaid, none of our Directors has or is proposed to have a service contract with us or any of our subsidiaries (other than contracts expiring or determinable by the employer within one year without the payment of compensation (other than statutory compensation)).

We have not entered into any service contract with our Directors which is for a duration that may exceed three years or which is not determine by us within one year without payment of compensation (other than statutory compensation).

2. Directors’ remuneration during the Track Record Period

For the three years ended December 31, 2004, 2005 and 2006, the aggregate of the remuneration paid and benefits in kind granted to our Directors by us and our subsidiaries was RMB67,000, RMB140,000 and RMB487,000, respectively.

Save as disclosed in this prospectus, no other emoluments have been paid or are payable, in respect of the three years ended December 31, 2004, 2005 and 2006 by us to our Directors.

Under the arrangements currently in force, we estimate that the aggregate remuneration payable to, and benefits in kind receivable by, our Directors (excluding discretionary bonus) for the year ending December 31, 2007 will be approximately RMB3.6 million.

— VI-21 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

E. DISCLOSURE OF INTERESTS

1. Disclosure of Interests

(a) Interests and short positions of our Directors in our share capital and our associated corporations following the Global Offering and the Capitalization Issue

Immediately following completion of the Global Offering and the Capitalization Issue and taking no account of any Shares which may be allotted and issued pursuant to the Pre-IPO Share Option Scheme and the Share Option Scheme or the exercise of the Over-allotment Option, the interests or short positions of the Directors and the chief executive in our Shares, underlying Shares and debentures and our associated corporations, within the meaning of Part XV of the SFO which will have to be notified to our Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he is taken or deemed to have under such provisions of the SFO) or which will be required, pursuant tosection352oftheSFO,toberecordedintheregister referred to therein or which will be required to be notified to us and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules, will be as follows:

Interests and short positions in our Shares, underlying shares and debentures and our associated corporations:

Long Positions in our Company

Number of Shares subject to options granted under Approximate the Pre-IPO percentage of Share Option interest in our Name of Director Number of Shares Scheme Company

Mr.DingShizhong...... 1,498,500,000 — 62.4% Founder of a discretionary trust(1) Mr. Ding Shijia...... 1,498,500,000 — 62.4% Founder of a discretionary trust(1) Mr.LaiShixian...... — 5,250,000 0.2% Mr.WangWenmo...... 170,978,850 —7.1% Founder of a discretionary trust(2) Mr.WuYonghua...... 90,059,850 —3.75% Founder of a discretionary trust(3)

Notes:

(1) The interests of Mr. Ding Shizhong and Mr. Ding Shijia in our Company are held through Anta International, which holds 62.4% of the issued share capital of our Company.

— VI-22 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

Shine Well (Far East) Limited and Talent Trend Investment Limited are entitled to exercise or control the exercise of one third or more of the voting power at general meeting of Anta International and therefore is deemed to be interested in all the Shares held by Anta International.

The entire issued share capital of Talent Trend Investment Limited is held by Allwealth Assets Limited, whichisinturnheldbyHSBCTrusteeactingasthetrustee of the DSJ Family Trust. The DSJ Family Trust is an irrevocable discretionary trust set up by Mr. Ding Shijia as settlor and HSBC Trustee as trustee on May 23, 2007. The beneficiaries under the DSJ Family Trust are family members of Mr. Ding Shijia. Mr. Ding Shijia as founder of the DSJ Family Trust is deemed to be interested in the Shares held by Talent Trend Investment Limited.

(2) The interests of Mr. Wang Wenmo in our Company is held through Anta International, which holds 62.4% of the issued share capital of our Company.

Fair Billion Development Limited holds 11.41% of the issued share capital of Anta International.

The entire issued share capital of Fair Billion Development Limited is held by Asia Bridges Assets Limited, which is in turn held by HSBC Trustee acting as the trustee of the WWM Family Trust. The WWM Family Trust is an irrevocable discretionary trust set up by Mr. Wang Wenmo as settlor and HSBC Trustee as trustee on May 23, 2007. The beneficiaries under the WWM Family Trust are family members of Mr. Wang Wenmo. Mr. Wang Wenmo as founder of the WWM Family Trust is deemed to be interested in the Shares held by Fair Billion Development Limited.

(3) The interests of Mr. Wu Yonghua in our Company is held through Anta International, which holds 62.4% of the issued share capital of our Company.

Spread Wah International Limited holds 6.01% of the issued share capital of Anta International.

The entire issued share capital of Spread Wah International Limited is held by Allbright Assets Limited, whichisinturnheldbyHSBCTrusteeactingasthetrustee of the WYH Family Trust. The WYH Family Trust is an irrevocable discretionary trust set up by Mr. Wu Yonghua as settlor and HSBC Trustee as trustee on May 23, 2007. The beneficiaries under the WYH Family Trust are family members of Mr. Wu Yonghua. Mr. Wu Yonghua as founder of the WYH Family Trust is deemed to be interested in the Shares held by Spread Wah International Limited.

(b) Interests and short positions discloseable under Divisions 2 and 3 of Part XV of the SFO

Immediately following completion of the Global Offering and the Capitalization Issue and taking no account of any shares which may be allotted and issued pursuant to the Pre-IPO Share Option Scheme and the Share Option Scheme or the exercise of the Over-allotment Option, in addition to the interests disclosed under paragraph (a) above, so far as the Directors are aware, the following persons are expected to have interests or short positions in our shares or underlying shares which are required to be disclosed to the provisions of Divisions 2 and 3 of Part XV of the SFO or, are expected to be, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of our Group.

— VI-23 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

Interests and short positions in our shares and underlying shares:

Approximate Number percentage of Name Capacity/Nature of interest of Shares shareholding

Anta International . . Beneficial Owner 1,498,500,000 62.4% Mr. Ding Shizhong . Founder of a discretionary 1,498,500,000 62.4% trust(1) Mr. Ding Shijia.... Founderofadiscretionary 1,498,500,000 62.4% trust(1) Ms.DingYali..... Founderofadiscretionary 180,750,000 7.5% trust(2) AndaHoldings.... BeneficialOwner 175,500,000 7.3% Anda Investments . . Beneficial Owner 126,000,000 5.3% Mr. Ding Hemu . . . Founder of a discretionary 126,000,000 5.3% trust(3) Notes:

(1) Each of Shine Well (Far East) Limited and Talent Trend Investment Limited is entitled to exercise or control the exercise of one third or more of the voting power at general meeting of Anta International and thereforeisdeemedtobeinterestedinall the Shares held by Anta International.

The entire issued share capital of Shine Well (Far East) Limited is held by Top Bright Assets Limited, whichisinturnheldbyHSBCTrusteeactingasthetrusteeoftheDSZFamilyTrust.TheDSZFamily Trust is an irrevocable discretionary trust set up by Mr. Ding Shizhong as settlor and HSBC Trustee as trustee on May 23, 2007. The beneficiaries under the DSZ Family Trust are family members of Mr. Ding Shizhong. Mr. Ding Shizhong as founder of the DSZ Family Trust is deemed to be interested in the Shares held by Shine Well (Far East) Limited.

The entire issued share capital of Talent Trend Investment Limited is held by Allwealth Assets Limited, whichisinturnheldbyHSBCTrusteeactingasthetrustee of the DSJ Family Trust. The DSJ Family Trust is an irrevocable discretionary trust set up by Mr. Ding Shijia as settlor and HSBC Trustee as trustee on May 23, 2007. The beneficiaries under the DSJ Family Trust are family members of Mr. Ding Shijia. Mr. Ding Shijia as founder of the DSJ Family Trust is deemed to be interested in the Shares held by Talent Trend Investment Limited.

(3) Sackful Gold Limited is entitled to exercise or control the exercise of one third or more of the voting power at general meeting of Anda InvestmentsandthereforeisdeemedtobeinterestedinalltheSharesheldby Anda Investments.

— VI-24 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

(4) Ms. Ding Yali is deemed under the SFO to be interested in the 5,250,000 which may be issued to her spouse, Mr. Lai Shixian, an executive Director, upon exercise of options granted to Mr. Lai under the Pre IPO Share Option Scheme.

2. Disclaimers

Save as disclosed in this prospectus:

(a) our Directors are not aware of any person (not being our Director or our chief executive) who will, immediately after completion of the Global Offering (taking no account of the Over-allotment Option or any Shares which may be issued pursuant to the exercise of options granted under the Pre-IPO Share Option Scheme and the Share Option Scheme and the Capitalization Issue), have an interest or a short position in Shares or underlying Shares which would fall to be disclosed to us under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who will, directly or indirectly, be interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at our general meetings;

(b) none of the Directors has any interest or short position in any of the Shares, underlying Shares or debentures or any shares, underlying shares or debentures of any associated corporation within the meaning of Part XV of the SFO, which will have to be notified to us and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he is deemed to have under such provisions of the SFO) or which will be required, pursuant to section 352 of the SFO, to be entered in the register referred to therein or which will be required to be notified to us and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, in each case once the Shares are listed;

(c) none of the Directors nor any of the parties listed in the section headed ‘‘Other Information — Consents of experts’’ of this Appendix is interested in the promotion of our Company, or in any assets which have been, within the two years immediately preceding the date of this prospectus, acquired or disposed of by or leased to us or any of its subsidiaries, or are proposed to be acquired or disposed of by or leased to our Company or any of its subsidiaries;

(d) none of the Directors nor any of the parties listed in the section headed ‘‘Other Information — Consents of experts’’ of this Appendix is materially interested in any contract or arrangement subsisting at the date of this prospectus which is significant in relation to our business;

(e) save in connection with the Underwriting Agreements, none of the parties listed in the section headed ‘‘Other Information — Consents of experts’’ of this Appendix:

(i) is interested legally or beneficially in any securities of our Company or any of our subsidiaries; or

(ii) has any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities of our Company or any of our subsidiaries;

— VI-25 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

(f) none of our Directors or their associates (as defined in the Listing Rules) or the existing Shareholders (who, to the knowledge of our Directors, owns more than 5% of our issued share capital) has any interest in any of the five largest customers or the five largest suppliers of our Group.

F. OTHER INFORMATION

1. Estate Duty and tax indemnity

Mr. Ding Shizhong, Mr. Ding Shijia and Anta International (together, the ‘‘Taxation Covenantors’’) have, under a deed of indemnity referred to in paragraph (p) of the sub-section headed ‘‘Summary of the material contracts’’ in this Appendix, given joint and several indemnities to our Company for itself and as trustee for its subsidiaries in connection with, among other things, (a) any liability for Hong Kong estate duty which might be payable by any member of our Group under or by virtue of the provisions of Section 35 and Section 43 of the Estate Duty Ordinance (Chapter 111 of the Laws of Hong Kong) or any similar laws and regulations of any relevant jurisdiction arising on the deathofanypersonatanytimebyreasonofanytransfer of any property to any member of our Group on or before the date on which the Global Offering becomes unconditional; (b) any taxation which might be payable by any member of our Group (i) in respect of any income, profits or gains earned, accrued, or received or deemed to have been earned, accrued or received on or before the date on which Global Offering becomes unconditional; or (ii) in respect of or in consequence of any act, omission or event occurring or deemed to occur on or before the date on which the Global Offering becomes unconditional. The deed of indemnity does not prescribe any time limit for claims to be made under the estate duty and tax indemnity.

The Taxation Covenantors will however, not be liable under the deed of indemnity for taxation to the extent that:

. specific provision or reserve has been made for such taxation liability in the audited accounts of our Company as at December 31, 2006; or

. the taxation liability arises or is increased as a result only of a retrospective change in law or a retrospective increase in tax rates coming into force after the date on which the Global Offering becomes unconditional; or

. the taxation liability would not have arisen but for any voluntary act of any member of our Group after the date on which the Global Offering becomes unconditional which the relevant member of our Group ought reasonably to have known would give rise to such taxation liability but excluding any act:

(i) carried out pursuant to a legally binding obligation of any member of our Group entered into or incurred on or before the date on which the Global Offering becomes unconditional; or

(ii) pursuant to an obligation imposed by any law, regulation or requirement having the force of law; or

(iii) taking place with the written approval of any of the Taxation Covenantors or pursuant to the Global Offering or any document executed pursuant to the Global offering; or

— VI-26 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

(iv) occurring in the ordinary course of business of the Group.

. the taxation liability arises in the ordinary course of business of our Group after December 31, 2006 up to and including the date on which the Global Offering becomes unconditional.

Our Directors have been advised that no material liability for estate duty is likely to fall on us or any of our subsidiaries under the laws of Hong Kong, the Cayman Islands and the British Virgin Islands, being jurisdictions in which one or more of the companies comprising our Group are incorporated.

2. Litigation

As at the Latest Practicable Date, neither we nor any of our subsidiaries are/is engaged in any litigation, arbitration or claim of material importance, and no litigation, arbitration or claim of material importance is known to our Directors to be pending or threatened by or against us, that would have a material adverse effect on its results of operations or financial condition.

3. Preliminary Expenses

Our estimated preliminary expenses are approximately HK$160,000 and have been paid by us.

4. Sponsor

The Sponsor made an application on our behalf to the Listing Committee of the Stock Exchange for listing of, and permission to deal in, the SharesinissueasmentionedhereinSharestobeissued pursuant to the Capitalization Issue and any Shares falling to be issued pursuant to the exercise of the Over-allotment Option and, the Shares that may be issued upon the exercise of options that may be granted under the Share Option Scheme. All necessary arrangements have been made to enable such Shares to be admitted into CCASS.

5. No Material Adverse Change

Our Directors confirm that there has been no material adverse change in their financial or trading position or prospects since December 31, 2006 (being the date to which our latest audited combined financial statements were made up).

6. Binding Effect

This prospectus shall have the effect, if an application is made in pursuance hereof, of rendering all persons concerned bound by all the provisions (other than the penal provisions) of sections 44A and 44B of the Companies Ordinance so far as applicable.

7. Miscellaneous

(1) Save as disclosed in this prospectus:

(a) within the two years immediately preceding the date of this prospectus, no share or loan capital of our Company or any of its subsidiaries has been issued or agreed to be issued fully or partly paid either for cash or for a consideration other than cash;

— VI-27 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

(b) no share or loan capital of our Company or any of its subsidiaries is under option or is agreed conditionally or unconditionally to be put under option;

(c) neither our Company nor any of our subsidiaries have issued or agreed to issue any founder shares, management shares or deferred shares;

(d) within the two years immediately preceding the date of this prospectus, no commissions, discounts, brokerage or other special terms have been granted in connection with the issue or sale of any shares or loan capital of any member of our Group;

(e) within the two years preceding the date of this prospectus, no commission has been paid or payable (except commissions to the Underwriters) for subscription, agreeing to subscribe, procuring subscription or agreeing to procure subscription of any Shares in our Company;

(f) none of the equity and debt securities of our Company is listed or dealt with in any other stock exchange nor is any listing or permission to deal being or proposed to be sought; and

(g) we have no outstanding convertible debt securities.

(2) There has not been any interruption in the business of our Group which may have or have had a significant effect on the financial position of our Group in the twelve (12) months immediately preceding the date of this prospectus.

8. Qualifications of experts

The following are the qualifications of the experts who have given opinion or advice which are contained in this prospectus:

Name Qualification

MorganStanley...... LicensedundertheSFOfortype1(dealingin securities, type 4 (advising on securities), and type 6 (advising on corporate finance) regulated activities as defined under the SFO

KPMG...... CertifiedPublicAccountants

CB Richard Ellis...... Independentprofessionalpropertyvaluer

ConyersDill&Pearman...... CaymanIslandsattorneys-at-law

Commerce&FinanceLawOffices...... PRClegaladviser

— VI-28 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

9. Consents of experts

Each of Morgan Stanley, KPMG, CB Richard Ellis, Conyers Dill & Pearman and Commerce & Finance Law Offices has given and has not withdrawn their respective consent to the issue of this prospectus with the inclusion of its report and/or letter and/or summary of valuations and/or legal opinion (as the case may be) and references to its name included in the form and context in which it respectively appears.

None of the experts named above has any shareholding interests in our Company or any of our subsidiaries or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in our Company or any of our subsidiaries.

G. PRE-IPO SHARE OPTION SCHEME

Summary of Terms

The purpose of the Pre-IPO Share Option Scheme is to give our employees an opportunity to have a personal stake in our Company and help motivate our employees to optimize their performance and efficiency, and also to retain our employees whose contributions are important to the long-term growth and profitability of our Group. The principal terms of the Pre-IPO Share Option Scheme, approved by written resolutions of the Shareholders dated June 11, 2007, are substantially the same as the terms of the Share Option Scheme except that:

(a) the subscription price per Share under the Pre-IPO Share Option Scheme shall be at a 20% discount to the Offer Price;

(b) the total number of Shares which may be issued upon the exercise of all options granted under the Pre-IPO Share Option Scheme is 16,000,000 Shares representing approximately 0.667% of the enlarged issued share capital of our Company immediately after completion of the Global Offering and the Capitalization Issue (assuming that the Over-allotment Option is not exercised);

Exercise period Maximum percentage of options exercisable

Anytime after the first anniversary of the Listing 30% of the total number of options Date granted

Anytime after the second anniversary of the Listing 30% of the total number of options Date granted

Anytime after the third anniversary of the Listing 40% of the total number of options Date granted

(d) save for the options which have been granted as at the Latest Practicable Date, no further options will be granted under the Pre-IPO Share Option Scheme on or after the Listing Date;

— VI-29 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

(e) each option granted under the Pre-IPO Share Option Scheme has a 10-year exercise period; and

(f) the Shares issued within one year from the Listing Date as a result of the exercise of options under the Pre-IPO Share Option Scheme will be subject to a lock-up period of 12 months from the Listing Date.

Application has been made to the Listing Committee of the Stock Exchange for the approval of the listing of and permission to deal in the 16,000,000 Shares to be issued pursuant to the exercise of the options granted under the Pre-IPO Share Option Scheme.

Outstanding Options Granted

As at the date of this prospectus, options to subscribe for an aggregate of 16,000,000 Shares (representing approximately 0.667% of the enlargedissuedsharecapitalofourCompanyimmediately after completion of the Global Offering, assuming that the Over-allotment Option is not exercised) at an exercise price equal to a 20% discount to the Offer Price have been conditionally granted to 38 participants by our Company at a consideration of HK$1.00 under the Pre-IPO Share Option Scheme. All the options under the Pre-IPO Share Option Scheme were granted on June 12, 2007 and no further options will be granted under the Pre-IPO Share Option Scheme prior to the Listing Date.

The options have been conditionally granted based on the performance of the grantees who have made important contributions and are important to the long term growth and profitability of our Group. A total of 38 employees including one executive Director and 11 members of the senior management of our Group (set out in the section headed ‘‘Directors, Senior Management and Staff’’ of this prospectus) have been conditionally granted options under the Pre-IPO Share Option Scheme.

A full list of such grantees containing all the details in respect of each option required under paragraph10oftheThirdScheduletotheCompanies Ordinance and Rule 17.02(1)(b) of and paragraph 27 of Part A of Appendix I to the Listing Rules is set out below:

Percentage of enlarged issue share capital of Number of our Company Shares to be after full issued upon full exercise of the exercise of the Pre-IPO Share Date of joining Pre-IPO Option Grantee and Position Address our Group Share Option (Note 1)

Director Mr. Lai Shixian Luzhoujiayuan, Puzhao, March 1, 2003 5,250,000 0.2173% Chief operating officer, executive Qingyang, Jinjiang, Fujian, director, and vice president the PRC

Senior Management Mr. Ling Shing Ping Room F, Floor 29, Block 1, January 1, 2007 750,000 0.0310% Chief financial officer, company San Po Kong Plaza, 33 secretary, qualified accountant, Shung Ling Street, investor relations Kowloon, Hong Kong officer and head of finance department

— VI-30 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

Mr. Pei Yongle No.403, Block 6, Kangyuan, October 11, 2004 500,000 0.0207% Executive director Biguiyuan, Guangzhou, the of Shanghai Fengxian PRC

Mr. Jin Wei No.2,Unit5,Block33, October 17, 2006 500,000 0.0207% General manager Zhongzhi Fangzhouyuan, of Shanghai Fengxian Nangang District, Harbin, Heilongjiang, the PRC

Mr. Li Su Quanzhou Institute of May 1, 2004 400,000 0.0166% Head of Quality Supervision and Testing on and Technology Center Product Quality

Mr. Ni Zhongsen Room 405, No.910, March 1, 2006 300,000 0.0124% Vice president Lianqian (E) Road, Siming District, Xiamen, Fujian, the PRC

Ms. Zhou Haiyan No.481, Taoxizhong March 1, 1999 300,000 0.0124% Head of Overseas Business District, Department Taocheng, Yongchun, Fujian, the PRC

Ms. Ye Min No.8, Meihua Road, February 1, 2001 300,000 0.0124% Head of Product Management Center Yutan, Ningxiang, Hunan, the PRC

Mr. Wang Huayou 1–203, Mingshiyuan, May 13, 2005 300,000 0.0124% Head of Sales Management Xincheng Wenzhou, Department Zhejiang, the PRC

Mr. Wang Ping Room 402, No.9, Lane 377, August 22, 2005 300,000 0.0124% Head of Retail Management Gumei Road, Minhang Center District, Shanghai, the PRC

Mr. Yang Yong No.215, Fuqin (W) Road, February 5, 2006 300,000 0.0124% Head of Human Resources Department Jinniu District, Chengdu, Sichuan, the PRC

Mr. Xu Yang No.30, Lane 28, Anqiu April 3, 2006 300,000 0.0124% Head of Brand Management Center Road, Hongkou District, Shanghai, the PRC

— VI-31 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

Other Employees Mr. Lian Mingshan Guoxi, Qianlian, Gaiwei, November 6, 450,000 0.0186% Deputy division head Xianyou, Fujian, the PRC 2001 of Footwear Business Department

Mr. Wu Zhicheng No. 33 Chongfu Road, September 25, 450,000 0.0186% Deputy executive head of Footwear Quanzhou, 2002 Business Department Fujian, the PRC

Mr. Xie Shimin Qiaotou, Hekeng Kou, February 20, 400,000 0.0166% Deputy division head Caoping Village, Datong, 2006 of Apparel Business Department Changting, Fujian, the PRC

Ms. Sun Bizhu No.2,NorthXiaxiang, March 1, 1999 350,000 0.0145% Assistant to the president Citanghou Guocuo Village, Fengwei, Quangang, Quanzhou, Fujian, the PRC

Ms. Lei Bo Room 203, Block 22, September 1, 350,000 0.0145% Deputy manager of Management South District, Huaqiao 2004 Department of Retail Management University Center

Mr. Huang Kaiji Dashi Commercial Housing March 8, 2000 350,000 0.0145% Deputy manager of Area, Shishi, Fujian, the Apparel Procurement Department PRC

Ms. Luo Zhenghua No.104, Block 3, Hunan April 14, 2005 350,000 0.0145% Manager of Retail Development University, Changsha, Department Hunan, the PRC

Mr. Wang Xueqin Team 3, Qingmeng Village, March 1, 1997 350,000 0.0145% Manager of Engineering Department Chidian, Jinjiang, Fujian, the PRC

Mr. Wang Zhiyong Team 1, Dongping Village, April 5, 2002 300,000 0.0124% Assistant to the Head of Shadian, Tongshan, Hubei, Apparel Business Department the PRC

Mr. Zhuang Mingzhen Sanguangtian, Qingyang, February 20, 300,000 0.0124% Manager of Finance Department Jinjiang, Fujian, the PRC 2001

Ms. Huang Wenting Room 104, Block D, April 29, 2006 300,000 0.0124% Manager of Legal Department Chongfu Mansion, No.1 Chongfu Road, Licheng District, Quanzhou, Fujian, the PRC

— VI-32 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

Ms. Zheng Suqin No.44, Team 5, Yangkeng July 1, 1995 300,000 0.0124% Manager of Footwear Procurement Village, Daji, Xianyou, Department Fujian, the PRC

Mr. Yao Qingcai No.61, South District, September 1, 300,000 0.0124% Deputy manager of Footwear Zhangjing Village, Luoshan, 1994 Procurement Department Jinjiang, Fujian, the PRC

Mr. Zhang Xixiang No.14, Zhangjia, Xikeng August 1, 1995 300,000 0.0124% Manager of Footwear Village, Lianxi, Wuyuan, OEM Department Jiangxi, the PRC Mr. Su Xiaolin No.247, North District, April 27, 2006 250,000 0.0103% Senior Legal Assistant Qianpo Village, Cizao, Jinjiang, Fujian, the PRC

Mr. Liu Yidan No.11, Xindajie (E) Road, October 20, 2003 250,000 0.0103% Deputy manager of Equipment Qingyang, Jinjiang, Fujian, Management Department the PRC

Mr. Wang Youcheng Room 601, No. 6 Taiping April 12, 2000 150,000 0.0062% Assistant to the Head of Product Village, Management Center Wuyi (M) Road, Taijiang District, Fuzhou, Fujian, the PRC

Mr. Guo Rongming No.2,NorthXiaxiang, July 11, 2000 150,000 0.0062% Assistant to the Head Citanghou Guocuo Village, of Sales Department Fengwei, Quangang, Quanzhou, Fujian, the PRC

Mr. Zhuang Keyu Meishan Village January 1, 2005 150,000 0.0062% Deputy head of Finance Management Committee, Qingyang, Center Jinjiang, Fujian, the PRC

Mr. Gang Yu Room 604, No.21, Houpu June 13, 2005 150,000 0.0062% Deputy head of Information Dongli, Heshan, Huli Management Center District, Xiamen, Fujian, the PRC

Mr. Cheng Shengliang No.17, Shihutang Team, April 1, 2005 150,000 0.0062% Factory manager of Footwear Shihu Village, Ruyi, Material Center Shaoshan, Hunan, the PRC

Mr. Huang Jianping Pingshang Team, Pingshang March 12, 1999 150,000 0.0062% Factory manager Village, Jiaokeng, Fengcheng, Jiangxi, the PRC

— VI-33 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

Ms. Ren Xinzhao Room 601, No. 2, March 29, 2007 100,000 0.0041% Assistant to the Head of Brand Taipingqiao, Fengtai, Management Center Beijing, the PRC

Mr. Zheng Fei Room 401, Block 2, Jinxiu March 1, 2004 50,000 0.0021% Senior Product Designer Xiangjiang Shanshui Garden, Nancun, Panyu District, Guangzhou, the PRC

Mr. Hu Qie Room 1202, Block A3, Aidu October 18, 2006 50,000 0.0021% Footwear product manager Xintiandi, No. 30, Yingcui Road, Nancun, Panyu District, Guangzhou, the PRC Mr. Xie Ganglin Room 1306, Long Xiangge, December 1, 50,000 0.0021% Apparel product manager Block 32, Longyuan 2006 Moutain Villa, Qing Shui River, Luohu District, Shenzhen, the PRC

Total 16,000,000 0.6620%

Note:

1. Assuming that the Over-allotment Option is not exercised.

The options issued under the Pre-IPO Share Option Scheme represent approximately 0.667% of our Company’s enlarged issued share capital as at the Listing Date. If all options are exercised, this would have a dilutive effect on our Shareholders of approximately 0.662% and a dilutive effect of approximately 0.133% on earnings per Share such that the forecast earnings per Share for the year ending December 31, 2007 will be diluted from approximately HK$0.16342 to approximately HK$0.16321. However, as the options are exercisable for a period of 10 years, any such dilution and impact on earnings per Share will be staggered over several years. No further options will be granted under the Pre-IPO Share Option Scheme after the Listing Date.

Our Directors have undertaken to our Company that they will not exercise the Options granted under the Pre-IPO Share Option Scheme to such extent that the Shares held by the public (as defined in the Listing Rules) after the Global Offering and Capitalization Issue will fall below the required percentage set out in Rule 8.08 of the Listing Rules or such other percentage as approved by the Stock Exchange from time to time.

— VI-34 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

H. SHARE OPTION SCHEME

The following is a summary of principal terms of the Share Option Scheme conditionally approved by a resolution of all the Shareholders passed on June 11, 2007 and adopted by a resolution of the Board on June 11, 2007. The terms of the Share Option Scheme are in accordance with the provisions of Chapter 17 of the Listing Rules.

1. Purpose

The purpose of the Share Option Scheme is to motivate Eligible Persons (as mentioned in the following paragraph) to optimise their future contributions to our Group and/or to reward them for their past contributions, to attract and retain or otherwise maintain on-going relationships with such Eligible Persons who are significant to and/or whose contributions are or will be beneficial to the performance, growth or success of our Group, and additionally in the case of Executives (as defined below), to enable our Group to attract and retain individuals with experience and ability and/or to reward them for their past contributions.

2. Conditions of the Share Option Scheme

The Share Option Scheme shall come into effect on the date (the ‘‘Approval Date’’) on which the following conditions are fulfilled:

(a) the approval of all the shareholders of our Company for the adoption of the Share Option Scheme;

(b) the approval of the Stock Exchange for the listing of and permission to deal in, the Shares to be allotted and issued pursuant to the exercise of the Options in accordance with the terms and conditions of the Share Option Scheme; and

3. Who may join

The Board may, at its absolute discretion, offer options (‘‘Options’’) to subscribe for such number of Shares in accordance with the terms set out in the Share Option Scheme to:

(a) any proposed executive director of, manager of, or other employee holding an executive, managerial, supervisory or similar position in any member of our Group (‘‘Employee’’), any full-time or part-time Employee, or a person for the time being seconded to work full- time or part-time for any member of our Group (‘‘Executive’’);

(b) a director or proposed director (including an independent non-executive director) of any member of our Group;

(d) a supplier of goods or services to any member of our Group;

(e) a customer, consultant, business or joint venture partner, franchisee, contractor, agent or representative of any member of our Group;

— VI-35 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

(f) a person or entity that provides design, research, development or other support or any advisory, consultancy, professional or other services to any member of our Group; and

(g) an associate of any of the foregoing persons.

(the persons referred above are the ‘‘Eligible Persons’’)

4. Maximum number of Shares

(a) The maximum number of Shares which may be issued upon exercise of all options to be granted under the Share Option Scheme and any other schemes of our Group shall not in aggregate exceed 10 per cent. of the Shares in issue as at the Listing Date (i.e. 240,000,000 Shares) (the ‘‘Scheme Mandate Limit’’) provided that our Company may at any time as the Board may think fit seek approval from our Shareholders to refresh the Scheme Mandate Limit, save that the maximum number of Shares which may be issued upon exercise of all options to be granted under the Share Option Scheme and any other schemes of our Company shall not exceed 10 per cent. of the Shares in issue as at the date of approval by Shareholders in general meeting where the Scheme Mandate Limit is refreshed.

(b) Our Company may seek separate approval from our Shareholders in general meeting for granting Options beyond the Scheme Mandate Limit, provided that the Options in excess of the Scheme Mandate Limit are granted only to the Eligible Person specified by our Company before such approval is obtained.

(c) The maximum number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Share Option Scheme and any other options granted and yet to be exercised under any other scheme shall not exceed 30% of our Company’s issued share capital from time to time. No options may be granted under the Share Option Scheme and any other share option scheme of our Company if this will result in such limit being exceeded.

5. Maximum entitlement of each participant

No Option may be granted to any one person such that the total number of Shares issued and to be issued upon exercise of Options granted and to be granted to that person in any 12-month period up to the date of the latest grant exceeds 1% of our Company’s issued share capital from time to time.

6. Offer and grant of Options

Subject to the terms of the Share Option Scheme, the Board shall be entitled at any time within 10 years after the Adoption Date to offer the grantofanOptiontoanyEligible Person as the Board may in its absolute discretion select to subscribe at the subscription price for such number of Shares as the Board may (subject to the terms of the Share Option Scheme) determine (provided the same shall be a board lot for dealing in the Shares on the Stock Exchange or an integral multiple thereof).

Subject to the provisions of the Listing Rules, the Board may in its absolute discretion when offering the grant of an Option impose any conditions, restrictions or limitations in relation thereto in addition to those set forth in the Share Option Scheme as the Board may think fit (to be stated in the letter containing the offer of the grant of the Option) including (without prejudice to the generality of the foregoing) qualifying and/or continuing eligibility criteria, conditions, restrictions or limitations relating to the achievement of performance, operating or financial targets by our Company and/or the

— VI-36 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

grantee, the satisfactory performance or maintenance by the grantee of certain conditions or obligations or the time or period when the right to exercise the Option in respect of all or some of the Shares shall vest provided that such terms or conditions shall not be inconsistent with any other terms or conditions of the Share Option Scheme. For the avoidance of doubt, subject to such terms and conditions as the Board may determine as aforesaid (including such terms and conditions in relation to their vesting, exercise or otherwise) there is no minimum period for which an Option must be held before it can be exercised and no performance target which need to be achieved by the grantee before the Option can be exercised.

7. Granting Options to Connected Persons

Subject to the terms in the Share Option Scheme, only insofar as and for so long as the Listing Rules require, where any offer of an Option is proposed to be made to a Director, chief executive or a substantial shareholder (as defined in the Listing Rules) of our Company or any of their respective associates, such offer must first be approved by the independent non-executive Directors of our Company (excluding the independent non-executive Director who or whose associates is the grantee of an Option).

Where any grant of Options to a substantial shareholder (as defined in the Listing Rules) or an independent non-executive Director of our Company, or any of their respective associates, would result in the securities issued and to be issued upon exercise of all Options already granted and to be granted (including Options exercised, cancelled and outstanding) to such person in the 12-month period up to and including the date of such grant:

(a) representing in aggregate over 0.1% of the relevant class of securities in issue; and

(b) (where the securities are listed on the Stock Exchange), having an aggregate value, based on the closing price of the securities at the date of each grant, in excess of HK$5 million,

such further grant of Options must be approved by shareholders of our Company (voting by way of a poll). Our Company shall send a circular to Shareholders containing the information required under the Listing Rules. All Connected Persons of our Company must abstain from voting in favour at such general meeting.

Approval from the shareholders of our Company is required for any change in the terms of Options granted to a participant who is a substantial shareholder or an independent non-executive Director of our Company, or any of their respective associates.

8. Offer period and number accepted

An offer of the grant of an Option shall remain open for acceptance by the Eligible Person concerned for a period of 28 days from the offer date provided that no such grant of an Option may be accepted after the expiry of the effective period of the Share Option Scheme. An Option shall be deemed to have been granted and accepted by the Eligible Person and to have taken effect when the duplicate offer letter comprising acceptance of the offer of the Option duly signed by the Grantee together with a remittance in favour of our Company of HK$1.0 by way of consideration for the grant thereof is received by our Company on or before 30 days after the offer date. Such remittance shall in no circumstances be refundable.

— VI-37 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

Any offer of the grant of an Option may be accepted in respect of less than the number of Shares in respect of which it is offered provided that it is accepted in respect of board lots for dealing in Shares on the Stock Exchange or an integral multiple thereof and such number is clearly stated in the duplicate offer letter comprising acceptance of the offer of the Option.

9. Restriction on the time of grant of Options

The Board shall not grant any Option under the Share Option Scheme after a price sensitive event has occurred or a price sensitive matter has been the subject of a decision until such price sensitive information has been announced pursuant to the requirements of the Listing Rules. In particular, no Option shall be granted during the period commencing one month immediately preceding the earlier of the date of the Board meeting (as such date is first notified to the Stock Exchange in accordance with the Listing Rules) for the approval of our Company’s results for any year, half-year, quarterly or any other interim period and the deadline for our Company to publish an announcement of its results for any year, half-year, quarterly or any other interim period, and ending on the date of the results announcements.

10. Exercise price

The subscription price in respect of any particular Option shall be such price as the Board may in its absolute discretion determine at the time of grant of the relevant Option (and shall be stated in the letter containing the offer of the grant of the Option) but the subscription price shall not be less than whichever is the highest of:

(a) the nominal value of a Share;

(b) the closing price of a Share as stated in the Stock Exchange’s daily quotations sheet on the offer date; and

(c) theaverageclosingpriceofaShareasstated in the Stock Exchange’s daily quotation sheets for the five Business Days immediately preceding the offer date.

11. Exercise of Option

(i) An Option shall be exercised in whole or in part (but if in part only, in respect of a Board Lot or any integral multiple thereof) within the Option Period in the manner as set out in this Share Option Scheme by the Grantee (or his legal personal representative(s)) by giving notice in writing to our Company stating that the Option is thereby exercised and specifying the number of Shares in respect of which it is exercised. Each such notice must be accompanied by a remittance for the full amount of the aggregate subscription price for the Shares in respect of which the notice is given.

(ii) The exercise of any Option shall be subject to the members of our Company in general meeting approving any necessary increase in the authorized share capital of our Company.

(iii) Subject as hereinafter provided:

— VI-38 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

(a) in the event that the Grantee dies or becomes permanently disabled before exercising an Option (or exercising it in full), he (or his legal representative(s)) may exercise the Option up to the Grantee’s entitlement (to the extent not already exercised) within a period of 12 months following his death or permanent disability or such longer period as the Board may determine;

(b) in the event that the Grantee ceases to be an Executive for any reason (including his employing company ceasing to be a member of our Group) other than his death, permanent disability, retirement pursuant to such retirement scheme applicable to our Group at the relevant time or the transfer of his employment to an affiliate company or the termination of his employment with the relevant member of our Group by resignation or termination on the ground of misconduct, the Option (to the extent not already exercised) shall lapse on the date of cessation of such employment and not be exercisable unless the Board otherwise determines in which event the Option (or such remaining part thereof) shall be exercisable within such period as the Board may in its absolute discretion determine following the date of such cessation;

(c) if a general offer is made to all holders of Shares and such offer becomes or is declared unconditional (in the case of a takeover offer) or is approved by the requisite majorities at the relevant meetings of shareholders of our Company (in the case of a scheme of arrangement), the Grantee shall be entitled to exercise the Option (to the extent not already exercised) at any time (in the case of a takeover offer) within one month after the date on which the offer becomes or is declared unconditional or (in the case of a scheme of arrangement) prior to such time and date as shall be notified by our Company;

(d) if a compromise or arrangement between our Company and its members or creditors is proposed for the purpose of or in connection with a scheme for the reconstruction of our Company or its amalgamation with any other company, our Company shall give notice thereof to the Grantees who have Options unexercised at the same time as it dispatches notices to all members or creditors of our Company summoning the meetingtoconsidersuchacompromiseorarrangementandthereuponeachGrantee (or his legal representatives or receiver) may until the expiry of the earlier of:

(i) the Option Period (in respect of any particular Option, the period commencing immediately after the Business Day on which the Option is deemed to be granted and accepted in accordance with the Share Option Scheme and expiring on a date to be determined and notified by the Directors to each Grantee provided that such period shall not exceed the period of 10 years from the date of the grant of a particular Option but subject to the provisions for early termination thereof containedintheShareOptionScheme);

(ii) the period of two months from the date of such notice; or

(iii) the date on which such compromise or arrangement is sanctioned by the court,

exercise in whole or in part his Option.

(e) in the event a notice is given by our Company to its members to convene a general meeting for the purposes of considering, and if thought fit, approving a resolution to voluntarily wind-up our Company, our Company shall on the same date as or soon after it dispatches

— VI-39 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

such notice to each member of our Company give notice thereof to all Grantees and thereupon, each Grantee (or his legal personal representative(s)) shall be entitled to exercise all or any of his options at any time not later than two Business Days prior to the proposed general meeting of our Company by giving notice in writing to our Company, accompanied by a remittance for the full amount of the aggregate subscription price for the Shares in respect of which the notice is given whereupon our Company shall as soon as possible and, in any event, no later than the business day immediately prior to the date of the proposed general meeting referred to above, allot the relevant Shares to the Grantee credited as fully paid.

12. Ranking of Shares

The Shares to be allotted upon the exercise of an Option will be subject to all the provisions of the articles of association and the laws of the Cayman Islands from time to time and shall rank pari passu in all respects with the then existing fully paid Shares in issue on the allotment date or, if that date falls on a day when the register of members of our Company is closed, the first date of the re- opening of the register of members, and accordingly will entitle the holders to participate in all dividends or other distributions paid or made on or after the allotment date or, if that date falls on a day when the register of members of our Company is closed, the first day of the re-opening of the register of members, other than any dividend or other distribution previously declared or recommended or resolved to be paid or made if the record date herefore shall be before the allotment date.

A Share issued upon the exercise of an Option shall not carry rights until the registration of the Grantee (or any other person) as the holder thereof.

13. Life of Share Option Scheme

Subject to the terms of this Scheme, the Share Option Scheme shall be valid and effective for a period of 10 years from the date on which it becomes unconditional, after which no further options will be granted or offered but the provisions of the Share Option Scheme shall remain in full force and effect to the extent necessary to give effect to the exercise of any subsisting Options granted prior to the expiry of the 10-years period or otherwise as may be required in accordance with the provisions of the Share Option Scheme.

14. Lapse of Share Option Scheme

An Option shall lapse automatically and not be exercisable (to the extent not already exercised) on the earliest of:

(a) the expiry of the option period;

(b) the expiry of any of the period referred to paragraphs related to exercise of Option;

(c) subject to the period mentioned in paragraph (e) of ‘‘Exercise of Option’’ in this section, the date of the commencement of the winding-up of our Company;

(d) there is an unsatisfied judgement, order or award outstanding against the Grantee or the Board has reason to believe that the Grantee is unable to pay or to have no reasonable prospect of being able to pay his/its debts; or

— VI-40 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

(e) a bankruptcy order has been made against any director or shareholder of the Grantee (being a corporation) in any jurisdiction.

No compensation shall be payable upon the lapse of any Option, provided that the Board shall be entitled in its discretion to pay such compensation to the Grantee in such manner as it may consider appropriate in any particular case.

15. Adjustment

In the event of any alteration to the capital structure of our Company while any Option remains exercisable, whether by way of capitalization of profits or reserves, rights issue, consolidation, reclassification, reconstruction, sub-division or reduction of the share capital of our Company, the Board may, if it considers the same to be appropriate, direct that adjustments be made to:

(a) the maximum number of Shares subject to the Share Option Scheme; and/or

(b) the aggregate number of Shares subject to the Option so far as unexercised; and/or

Where the Board determines that such adjustments are appropriate (other than an adjustment arising from a capitalization issue), the auditors appointed by our Company shall certify in writing to the Board that any such adjustments are in their opinion fair and reasonable, provided that:

(a) any such adjustments shall be made on the basis that the aggregate Subscription Price payable by the Grantee on the full exercise of any Option shall remain as nearly as practicable the same as (but shall not be greater than) as it was before such event;

(b) no such adjustments shall be made the effect of which would be to enable a Share to be issued at less than its nominal value;

(c) any such adjustments shall be made in accordance with the provisions as stipulated under Chapter 17 of the Listing Rules and supplementary guidance on the interpretation of the Listing Rules issued by the Stock Exchange from time to time (including supplemental guidance attached to the letter from the Stock Exchange dated September 5, 2005 to all issuers relating to Share Option Schemes); and

(d) the issue of securities as consideration in a transaction shall not be regarded as a circumstance requiring any such adjustments.

16. Cancellation of Options not Exercised

The Board shall be entitled for the following causes to cancel any Option in whole or in part by giving notice in writing to the Grantee stating that such Option is thereby cancelled with effect from the date specified in such notice (the ‘‘Cancellation Date’’):

(a) the Grantee commits or permits or attempts to commit or permit a breach of the restriction on transferability of Option or any terms or conditions attached to the grant of the Option;

(b) the Grantee makes a written request to the Board for the Option to be cancelled; or

— VI-41 — APPENDIX VI STATUTORY AND GENERAL INFORMATION

(c) if the Grantee has, in the opinion of the Board, conducted himself in any manner whatsoever to the detriment of or prejudicial to the interests of our Company or its subsidiary.

The Option shall be deemed to have been cancelled with effect from the Cancellation Date in respect of any part of the Option which has not been exercised as at the Cancellation Date. No compensation shall be payable upon any such cancellation, provided that the Board shall be entitled in its discretion to pay such compensation to the Grantee in such manner as it may consider appropriate in any particular case.

17. Termination

Our Company may by resolution in general meeting at any time terminate the operation of the Share Option Scheme. Upon termination of the Share Option Scheme as aforesaid, no further Options shall be offered but the provisions of the Share Option Scheme shall remain in force and effect in all other respects. All Options granted prior to such termination and not then exercised shall continue to be valid and exercisable subject to and in accordance with the Share Option Scheme.

18. Transferability

The Option shall be personal to the Grantee and shall not be assignable and no Grantee shall in any way sell, transfer, charge, mortgage, encumber or create any interest (legal or beneficial) in favour ofanythirdpartyoverorinrelationtoanyOption or attempt so to do (save that the Grantee may nominate a nominee in whose name the Shares issued pursuant to the Scheme may be registered), except with the prior written consent of the Board from time to time. Any breach of the foregoing shall entitle our Company to cancel any outstanding Option or part thereof granted to such Grantee.

19. Amendment

The Share Option Scheme may be altered in any respect by a resolution of the Board except that the following shall not be carried out except with the prior sanction of an ordinary resolution of the shareholders of our Company in general meeting, provided always that the amended terms of the Scheme shall comply with the applicable requirements of the Listing Rules: (i) any material alteration to its terms and conditions or any change to the terms of Options granted (except where the alterations take effect under the existing terms of the Scheme); (ii) any alteration to the provisions of the Scheme in relation to the matters set out in Rule 17.03 of the Listing Rules to the advantage of Grantee; and (iii) any alteration to the aforesaid termination provisions.

20. Conditions of the Share Option Scheme

The Scheme shall come into effect on the date on which the following conditions are fulfilled:

(a) the approval of all the shareholders of our Company for the adoption of the Scheme; and

— VI-42 — APPENDIX VII DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES AND AVAILABLE FOR INSPECTION

DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES

The documents attached to the copy of this prospectus delivered to the Registrar of Companies in Hong Kong for registration were copies of the WHITE and YELLOW Application Forms, the written consents referred to in the paragraph headed ‘‘Consents of experts’’ in Appendix VI, the statement of adjustments to the accountants’ report set out in Appendix I and copies of the material contracts referred to in the paragraph headed ‘‘Summary of the material contracts’’ in Appendix VI.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the offices of Coudert Brothers in association with Orrick, Herrington & Sutcliffe LLP at 39th Floor, Gloucester Tower, the Landmark, 15 Queen’s Road Central, Hong Kong during normal business hours from 9: 00 a.m. to 5: 00 p.m. up to and including the date which is 14 days from the date of this prospectus:

(1) our Memorandum and the Articles;

(2) the Accountants’ Report prepared by KPMG, the text of which is set out in Appendix I to this prospectus and the related statement of adjustments;

(3) the audited financial statements as have been prepared for the companies now comprising our Group for each of the three years ended December 31, 2006;

(4) the letter received from KPMG on unaudited pro forma financial information, the texts of which is set out in Appendix II to this prospectus;

(5) the letters relating to the profit forecast, the texts of which are set out in Appendix III to this prospectus;

(6) the letter, summary of values and valuation certificates relating to the property interests of our Group prepared by CB Richard Ellis, the texts of which are set out in Appendix IV to this prospectus;

(7) the material contracts referred to in the paragraph headed ‘‘Summary of the material contracts’’ of Appendix VI to this prospectus;

(8) the service contracts with Directors, referred to in the paragraph headed ‘‘Directors’ service contracts’’ of Appendix VI to this prospectus;

(9) the written consents referred to in the paragraph headed ‘‘Consents of experts’’ of Appendix VI to this prospectus;

(10) the legal opinions prepared by Commerce & Finance, our legal adviser as to the PRC law, in respect of certain aspects of our Group and our property interests;

(11) the letter prepared by Conyers Dill & Pearman summarizing certain aspects of Companies Law referredtoinAppendixVtothisprospectus;

(12) the Companies Law; and

(13) the rules of the Pre-IPO Share Option Scheme and the Share Option Scheme.

— VII-1 —