Anta Sports (2020 HK) Analysis
Key Highlights:
- 4Q24E Outlook: Positive despite a miss in 3Q24 results. Anta's retail sales are expected to grow by 16% and 10% for Anta and FILA respectively in 4Q24, supported by strong performance during the 10-1 National Day holidays.
- FY24E Sales Guidance: Not revised down, but more conservative expectations.
- Net Profit Margin: Still confident in maintaining net profit margins, supported by resilient gross margins and cost controls.
Key Financials:
- Revenue (FY24E): Projected at RMB 69,483 million.
- Gross Margin: Expected to remain stable at 63.3%.
- Net Profit Margin: Projected at 18.5%.
- EPS (FY25E): Estimated at RMB 4.918.
Strategic Initiatives:
- Anta Brand:
- Successful product launches (e.g., Kyrie Irving series).
- Expanded store formats (e.g., Anta Champion stores).
- Increased overseas expansion.
- FILA:
- Store revamps.
- New product launches (e.g., FILA+ series).
Market Performance:
- Retail Sales Growth: Anta's retail sales grew by mid-single digits in 3Q24, while FILA saw a low single-digit decline.
- Discounts: Retail discounts improved year-over-year for all brands.
- Inventory Days: Stayed healthy at around 4.5-5 months.
Analyst Recommendation:
- Rating: Maintain BUY.
- Target Price: HK$ 126.68 (raised from HK$ 107.84).
- P/E Ratio: 18.5x (FY25E).
Summary:
Despite a miss in 3Q24 results, Anta Sports remains optimistic about its 4Q24E and FY25E outlooks, driven by strong retail sales during the 10-1 National Day holidays and strategic initiatives. The company is expected to maintain healthy margins and continue growing, supported by robust performance from its key brands and expanding store formats.
