Date of Report: October 14, 2024
Broker: CGS-CIMB Research
Company Overview
Anta Sports is a major Chinese sportswear company, known for its Anta and Fila brands. The company specializes in the design, development, manufacturing, and marketing of sportswear, including footwear, apparel, and accessories.
Retail Performance for 3Q24
Anta Sports’ retail performance for the third quarter of 2024 was mixed, with its brands showing varying results:
- Anta Brand: The retail sales of the Anta brand grew by mid-single digits year-on-year (yoy) in 3Q24, indicating stable performance.
- Fila Brand: Fila’s retail sales, however, declined by low-single digits yoy, which was slightly below the company’s expectations.
Management Insights
- Discount Rates: Management confirmed that the discount rates for all brands remained stable year-on-year during the third quarter of 2024.
- Channel Inventory: The company reported that the channel inventory for the Anta brand was below five months, while Fila’s inventory was around five months. This reflects solid inventory control across its brands.
Strategic Outlook
Anta Sports plans to maintain Fila’s brand positioning and will continue to launch more differentiated products. These new products are aimed at driving future sales growth for the Fila brand, which has seen a slight sales decline.
Investment Recommendation
- Rating: The broker reiterated an “Add” rating for Anta Sports, reflecting continued confidence in the company’s long-term growth strategy.
- Target Price: The target price has been adjusted to HK$116, based on a Discounted Cash Flow (DCF) valuation.
Conclusion
Despite the slight underperformance of Fila’s retail sales in 3Q24, Anta Sports remains a strong player in the sportswear market, with stable discount rates, manageable inventory levels, and strategic plans to boost Fila’s sales through product differentiation. The company continues to maintain solid growth expectations, particularly for its flagship Anta brand.
