(For Immediate Release)

Cosmo Lady () Holdings Company Limited 都市丽人(中国)控股有限公司

Cosmo Lady Announces 2018 Annual Results Revenue Rose by Approximately 12.2% Net Profit Increased by 19.3% to Approximately RMB378 Million * * * * *

Actively Promotes Transformation and Reform Operating Performance Continues to Improve

(27 March 2019, Hong Kong) The largest branded intimate wear enterprise in China, Cosmo Lady (China) Holdings Company Limited (“Cosmo Lady” or the “Company”, together with its subsidiaries, the “Group”, stock code: 2298), today announced its annual results for the year ended 31 December 2018 (the “year under review”).

During the year under review, the global economy continued to strengthen in the first half of 2018. However, in the second half of 2018, the global economic growth has slowed down. The escalation of trade tensions between the US and China appeared to have hurt global business confidence. International trade and manufacturing activities have softened, and some large emerging markets have experienced substantial financial pressure. The Group actively addresses the above challenges and seizes opportunities. It has formulated various transformation and reform measures during the year to keep predominance of the Group in the intimate wear mass market, and on the other hand, strive to upgrade the brand image, and target at mid-end and mid-to-high-end market for improving the Group’s business performance.

The Group’s revenue increased by approximately 12.2% to approximately RMB5,096,453,000 (2017: RMB4,542,483,000) in 2018 as compared with 2017, mainly due to the satisfactory performance of the sales to franchisees and e-commerce channel sales. Profit attributable to owners of the Company increased by approximately 19.3% to approximately RMB378,229,000 (2017: RMB317,002,000).

The products of the Group were sold to consumers through an extensive network of retail stores in more than 330 prefecture-level cities across China and via online sales platforms. During the year under review, the Group achieved satisfactory sales performance. The increase in sales to franchisees by approximately 15.1% due to the renovation of retail stores with upgraded image by franchisees as urged by the Group and the improvement in quality of products. E-commerce sales also increased by about 31.2% mainly because the Group continued to invest resources in the development of e-commerce channels. Meanwhile, the revenue for all types of product have increased. The growth in revenue for sleepwear and loungewear products by approximately 22.3% was mainly attributable to the step up of promotion activities and improvement of product design and variety.

Cosmo Lady Announces 2018 Annual Results Press release Page 2 During the year under review, the gross profit margin of the Group dropped slightly to around 41.7% (2017: 43.2%). This was mainly due to the keen competition in the e-commerce channel and the Group’s step up of promotion efforts to sell aged inventories. The Board has recommended the payment of final dividend of HK3.75 cents (2017: HK3.34 cents) per share and special final dividend of HK6.20 cents per share (2017: nil) for celebrating the 5th anniversary of the listing of the Company’s shares (equivalent to approximately RMB3.20 cents per share and RMB5.30 cents per share respectively, using the exchange rate quoted by the People’s Bank of China on 26 March 2019) for the year ended 31 December 2018.

Mr. Zheng Yaonan, Chairman and Chief Executive Officer of Cosmo Lady (“Mr. Zheng”), said, “In mainland China, domestic engines that used to drive economic expansion showed signs of weakening momentum in 2018. Coupled with the highly fragmented market structure and the continuous structural adjustments in respect of sales channel diversification, product quality and mix of products, the intimate wear industry of China continues to face formidable internal and external challenges. To address the above challenges and seize opportunities, the Group has formulated various transformation and reform measures, including optimizing the brand image and distribution management, improving design and quality of products and reforming supply chain management and tightening expenses control for keeping predominance of the Group in the intimate wear mass market and upgrading brand image.”

From the aspect of optimization of brand image and distribution management, the Group has worked with first-class interior design companies, reputable international advertising companies and smart retail store technology companies to set up new stores in mid-end shopping malls, using “Cosmo Lady” brand, based on the guidance of Ms. Sharen Turney, our chief strategic officer. In the meantime, the Group has entered into mid-to-high-end shopping malls by using the young O+ brand derived from the original Ordifen brand and renovated the stores on streets by using the 6th generation image. In addition, the Group has also cooperated with Tencent on smart retail store arrangement and continued to invest resources in the e-commerce channel.

In terms of improving design and quality of products, the Group has reformed supply chain management. The Group appointed Mr. Yuasa Masaru as chief technology officer of the Group to enhance the existing technology and improve the functionality and quality of products, and also engaged French designers and cooperated with US trend forecasting expert Mr. Vincent Daudin for improving product design and development. Moreover, the Group engaged Rowland Berger Strategy Consultants (Shanghai) Limited, a global leading consultant firm, to give professional recommendations on management, systems and procedures of supply chain management, and entered into strategic investment agreements with eleven intimate wear product and material suppliers in order to integrate the capabilities of suppliers on the development of new products and materials, which can shorten their development and manufacturing cycle and improve the Group’s quick response capability.

During the year under review, a wholly-owned subsidiary of the Company, a wholly-owned subsidiary ofJD.com, Inc., Beijing Jingdong Century Trading Co., Ltd. and Mr. Li Guo Cheng (as representative of the fund management team) entered into cooperation agreement main terms to establish a cooperation fund for investing in companies involved in the intimate wear, its upstream and downstream businesses and relevant industries. The Group has invested RMB135,000,000 in 2018, and will invest RMB100,000,000 in 2019.

Cosmo Lady Announces 2018 Annual Results Press release Page 3 For financing the reforms in sales and distribution channels of the Group, potential mergers, acquisitions and cooperation opportunities, and general working capital, on 17 May 2018, the Company issued an aggregate of 121,443,213 shares at a price of HK$4.20 per share to Windcreek Limited (an indirect wholly-owned subsidiary of JD.com, Inc.), Image Frame Investment (HK) Limited (a wholly-owned subsidiary of Tencent Holdings Limited), Vipshop International Holdings Limited (a wholly-owned subsidiary of Vipshop Holdings Limited) and Quick Returns Global Limited, raising gross proceeds of approximately HK$510,061,495 and net proceeds of approximately HK$509,000,000.

Looking ahead, Mr. Zheng concluded, “We will continue to focus on optimizing brand image and distribution management, improving design and quality of products and internal corporate structure to enhance management efficiency, in which we will renovate the stores on streets by using 7th generation image, and transform more stores to smart retail stores with the use of intelligence guide to improve efficiency, and refining membership management, placing advertisements and developing products precisely. Furthermore, we will roll out 4F style products (“Flirt”, “Free”, “Function”, and “Fun”) in order to enhance product competitiveness and speed up product iteration. We will maintain a proper balance between increase in expenditure and development of new plans so that operating expenses as a percentage of sales will not change significantly. The board will strive to enhance the sustainability of the Group and bring fruitful returns to shareholders in the future under the challenging environment.

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About Cosmo Lady (China) Holdings Company Limited Cosmo Lady is the largest branded intimate wear enterprise in China in terms of total retail sales in 2018, according to Frost & Sullivan. The Group is principally engaged in the design, research, development and sale of its own branded intimate wear products, namely, , underpants, sleepwear and loungewear, thermal clothes and others (including leggings and , vests, and accessories) in China.

Issued by Porda Havas International Finance Communications Group for and on behalf of Cosmo Lady (China) Holdings Company Limited. For further information, please contact:

Porda Havas International Finance Communications Group Kelly Fung +852 3150 6763 [email protected] Phoenix Fung +852 3150 6773 [email protected] Chloe Chow +852 3150 6732 [email protected] Christy Ng +852 3120 6515 [email protected] Yeung +852 3120 6772 [email protected] Fax: +852 3150 6728