In 2019, the performance of Anta Sports’ FILA brand is bright, while Anta stores are expected to shrink in 2020.
On March 24, Beijing time, Anta Sports (02020.HK) released its 2019 performance report, with annual revenue reaching 33.927 billion yuan, a year-on-year increase of 40.8%, exceeding the consensus of Bloomberg. As of press time, Anta Sports rose 5.55% to close at HK $ 52.3.
In 2019, apparel and footwear brands continue to occupy the core composition of Anta Sports’ main business, of which apparel products contribute 63.1% of total revenue and footwear products contribute 33.6%.
Gross profit performance is equally impressive. Anta Sports ’gross profit for the year reached 18.659 billion yuan (12.687 billion yuan, 2018), a year-on-year increase of 47.1% and a gross profit margin of 55%. Operating profit margin increased from 23.7% to 25.6%. Net profit attributable to shareholders reached 5.344 billion yuan (4.103 billion yuan, 2018), an increase of 30.3% year-on-year.
Source: Anta Sports 2019 Annual Report; Drawing:
Among them, FILA, a brand of Anta Sports, performed very well, with revenue of 14.770 billion yuan, an increase of 73.9% year-on-year, and gross profit of 10.403 billion yuan, an increase of 75.4% year-on-year. Anta Sports summarizes the revenue growth of the FILA brand into three points: the increasing market awareness of the brand and its products, the performance of the retail business, the increase in physical stores and store efficiency, and e-commerce driving product sales.
Anta Sports was listed on the main board of the Hong Kong Stock Exchange in 2007. It is mainly engaged in the design, development and sales of sports products. Its brands include Anta, high-end brand FILA, fitness shoe brand Sprandi, Japanese high-end ski brand Descente, Korean outdoor sports brand Kolon and Chinese Hong Kong children’s clothing brand Kingkow acquired Amer Sports and its well-known international brands in March 2019.
Anta Sports frequently moves in 2019. After the early acquisition of Amer Sports, Anta Sports has completed its structural adjustment and divided into three major brand business groups: professional sports, fashion sports and outdoor sports according to the different attributes of its brands, and promoted collaborative incubation, value retail and internationalization.
In terms of capital markets, Anta Sports also encountered a “The famous short-selling agency Muddy Waters successively released five short-selling reports, aiming the muzzle at the company. In these five rounds of the “short-bale” campaign, Muddy Waters has questioned Anta controlling most of the first-tier dealers, Major shareholders are suspected of transferring high-quality assets, etc. However, under intensive short selling, Anta’s stock price has maintained a firm foothold. Anta’s stock price rose 9.61% in July, and has since climbed to a high of 79.90 Hong Kong dollars.
With regard to the impact of the epidemic, Anta Sports also showed its confidence in the brand while worrying: 2020 is a challenging year. The black swan incidents such as the trade war and viruses will bring a certain impact on the global and Chinese economy. . Anta will take various measures to respond to the epidemic, and develop a new online marketing model. With brand spokesmen and contracted athletes recording short sports videos, consumers are encouraged to exercise at home and interact extensively with consumers.
Today, the impact of the spread of the epidemic on global companies has become more and more serious. With the continuous meltdown of U.S. stocks and the continued downturn in global stock markets, Anta Sports’ share price has fallen by nearly 40% from its highest point. During the epidemic, Anta also stated in the announcement that as of February 14, only 40% of the stores in mainland China had resumed business.
Under the trend that most apparel brands are closing stores, clearing inventory, and reducing gross profit, Anta Sports looks forward to 2020 and has different operating strategies for different sub-brands.
The report shows that by the end of 2020, Anta’s mainland stores will be reduced to 10200 ~ 10300 (10506, 2018), while mainland China, Hong Kong, Macau and Singapore FILA stores will be adjusted to 2000 ~ 2100 (1951, 2018) At the same time, DESCENTE will penetrate deeply into the first and second tier cities in mainland China, increasing to 160 ~ 170 (136, 2018).