Judging from SARS experience, after the epidemic, sports, entertainment products, gold and silver jewelry, clothing, shoes, hats, needles, and textiles rebounded.
Wen / Futu Reviews
Author / Mr. Banana Meow
On Tuesday, March 24, ANTA Sports will announce its annual report for the year ended December 31, 2019.
Affected by the epidemic, the broad market fluctuated many times, and Anta’s stock price went down all the way. As of the close of March 23, Anta’s stock price was 48 Hong Kong dollars, a drop of 40% from the historical high of 79.9 Yuan last November.
Quote source: Futu Securities
In July of last year, Anta was shorted by muddy water five times, but the stock price is still strong and it continues to hit a new high. However, the outbreak has hit Anta significantly. Although the domestic epidemic occurred earlier and came to an end under strict control, the operational blow has not yet ended. The stock price has already responded, but with the intensification of foreign epidemics, the global stock market has fluctuated, and Hong Kong stocks have been unable to escape.
So will the outbreak affect Anta’s 2019 results? How big is the impact?
I. The impact of the epidemic on Anta
About the impact of the epidemic, the company issued an announcement as early as February. The announcement said that the main impact is financial data for the first half of 2020, and that the epidemic situation is expected to return to normal levels as soon as the second half of 2020. Although it has been stated in the operation situation, in order to actively cooperate with the epidemic prevention and control work and ensure the health and safety of employees and customers, some stores in different regions of Anta have resumed operations. However, as of February 14, only 40% of stores in mainland China had resumed business.
Although the government ’s strong support has already begun to resume work and production in many places, from the demand side, it will take time to restore the flow of people in the business circle and stimulate consumer purchasing power. Before the epidemic is fully controlled, the country Most regions are still implementing strict crowd control on popular business districts to avoidPotential risks and recovery of purchasing power have to wait.
Shops with sparsely populated people, picture source pixelabay
On the supply side, except for areas with severe epidemic conditions such as Hubei and Wuhan, other areas have basically resumed work and production. According to the announcement, based on sales statistics, the proportion of Anta’s self-produced shoes and clothing is only 34.4% and 11.9%, respectively, and the outsourcing is the main source. The impact of the epidemic on the production and supply side of Anta is small.
Overall, the epidemic has a significant impact on Anta’s performance in 2020, but it is too early to assess how big the impact is. The impact of the epidemic on 2019 performance is small and can be almost ignored.
Second, 2019 performance review
As early as January, Anta has announced the latest operating performance in the fourth quarter of 2019 and the whole year. According to the announcement, the retail sales growth of its “ANTA” brand in the fourth quarter increased at a high rate of 10-20%, and the annual growth rate was at 10-20%. The “FILA” brand grew at a rate of 50- 55%, and 55-60% for the whole year; other brands grew 25-30% in the fourth quarter, and 30-35% for the whole year. Judging from this data, Anta is still in the fast lane of rapid development.
After the 2012 revenue surpassed Li Ning, Anta is firmly seated in the first chair of a domestic sports brand, and the growth momentum is getting more and more fierce. Especially from 2011 to 2014, after Anta’s brand FILA changed from a distribution model to a direct sales model, Anta’s operations became more and more successful and its performance increased rapidly. According to Wonder’s statistics, after 2014, the company’s overall revenue growth rate has remained above 20%, and its revenue has also exceeded 20 billion yuan in 2018 (RMB, the same below).
Image source: Futu research and production
The sharp increase in performance has boosted the stock price. Over the years, Anta’s stock price has reached new highs and its valuation has been rising all the way. Even now affected by the epidemic,The highest point is close to the waist, Anta is still a ten-fold ten-year-old bull stock.
Quote source: Futu Securities
This performance has also been roughly expected, and it is expected to bring good news to the stock price.
Three, analyst expectations
According to Bloomberg analyst statistics, Anta Sports is expected to adjust EPS guards to 2.045 yuan in 2019, GAAP earnings per share at 2.045 yuan, operating income at 32.76 billion, an increase of 35.9% year-on-year, and adjusted net profit at 5.425 billion A year-on-year increase of 32.2%.
In rating analysis, 39 of the 41 analysts have given a “Buy” rating, corresponding to a 12-month target price of 83.14 yuan.
It is worth noting that since March, many securities firms have announced Anta’s research reports, which are basically buy ratings.
Summary
Under the influence of the epidemic, the global stock market oscillated, coupled with negative news such as the delay of the Olympic Games, the stock prices of the sporting goods industry went down, and Anta, Li Ning and other stocksThe price is close to the waist. Although the impact of the epidemic on performance has been determined, the current stock price has fallen sharply under the current panic. For Anta, the valuation is more attractive. After all, from the experience of SARS, after the epidemic, sports, entertainment supplies, gold and silver jewelry and clothing Shoes, needles and textiles rebounded. However, the current market is unstable and investors should be cautious.
Edit / Emily
Risk tips: The opinions of the authors or guests shown above all have their specific positions, and investment decisions need to be based on independent thinking. Futu will endeavor but cannot guarantee the accuracy and reliability of the above content, and will not assume any loss or damage caused by any inaccuracies or omissions.