Price Performance: Current Price: HK$93.10, Up/Downside: +18.7%
Auditor: KPMG
Main Views
The company maintains a BUY rating despite a revised target price due to a negative outlook for 2Q22E.
The target price is based on a 30x FY22E P/E and is not considered too demanding compared to the 5-year average of 25x and international peers' average of 22x.
The 1Q22 retail sales slightly missed expectations, but the performance is understood due to the pandemic in March 2022.
Anta's retail sales grew by high-teens (20%+ in Jan-Feb, -5% in Mar), below the CMBI estimate of 23%, but better than Pou Sheng's sales decline of 43%.
Other brands' retail sales growth were impressive, at 40%-45%, which accelerated from 30%-35% in 4Q21.
Retail discounts for Anta and FILA remained healthy at 27% and 25% respectively in 1Q22, similar to 4Q21.
Inventory levels were still controllable at 5 months and 6-7 months for Anta and FILA respectively.
FILA is under more pressure than Anta in FY22E due to its higher exposure to Tier 1 cities and heavier inventory levels.
Guidance for FILA is likely to be revised down, with a forecasted retail sales drop of 28.5% in 2Q22E and a potential OP margin decline to 21% in FY22E.
The NP forecasts for FY22E, FY23E, and FY24E were cut by 9%, 6%, and 5% respectively, due to slower sales growth and lower OP margins.
Financial Highlights
Earnings Summary (YE 31 Dec)
Metric
FY20A
FY21A
FY22E
FY23E
FY24E
Revenue (RMB mn)
35,512
49,328
56,356
66,744
75,595
YoY growth (%)
4.7
38.9
14.2
18.4
13.3
Net income (RMB mn)
5,162
7,720
8,529
10,748
12,559
EPS (RMB)
1.86
2.77
3.06
3.85
4.50
YoY growth (%)
-3.2
49.2
10.5
26.0
16.8
P/E (x)
42.2
27.9
25.3
20.1
17.2
P/B (x)
8.8
7.2
6.1
5.0
4.1
Yield (%)
0.7
1.7
1.2
1.7
2.3
ROE (%)
21.5
26.7
24.9
25.5
24.8
Net gearing (%)
Net cash
Net cash
Net cash
Net cash
Net cash
Earnings Revision
Metric
New (RMB mn)
Old (RMB mn)
Diff (%)
Revenue
56,356
60,601
-7.0%
Gross profit
34,744
37,457
-7.2%
EBIT
11,657
12,953
-10.0%
Net profit att.
8,529
9,362
-8.9%
Diluted EPS (RMB)
3.058
3.357
-8.9%
Gross margin
61.7%
61.8%
-0.2ppt
EBIT margin
20.7%
21.4%
-0.7ppt
Net profit att. margin
15.1%
15.4%
-0.3ppt
CMBIGM Estimates vs Consensus
Metric
CMBIS (RMB mn)
Consensus (RMB mn)
Diff (%)
Revenue
56,356
58,830
-4.2%
Gross profit
34,744
36,124
-3.8%
EBIT
11,657
13,288
-12.3%
Net profit att.
8,529
9,250
-7.8%
Diluted EPS (RMB)
3.058
3.404
-10.2%
Gross margin
61.7%
61.4%
0.2ppt
EBIT margin
20.7%
22.6%
-1.9ppt
Net profit att. margin
15.1%
15.7%
-0.6ppt
Valuation Table
Company
Ticker
Rating
12m TP (HK$)
Price (HK$)
Up/Downside
Mkt. Cap (HK$mn)
Year End
P/E (x)
P/B (x)
ROE (%)
3yrs PEG (x)
Yield (%)
Anta Sports
2020 HK
BUY
110.53
93.10
+18.7%
252,638
Dec-21
25.3
20.1
29.2
1.4
1.7
Li Ning Co
2331 HK
BUY
81.04
63.95
+27%
167,347
Dec-21
28.0
22.5
5.7
1.3
1.1
Xstep Intl
1368 HK
BUY
16.21
11.30
+43%
29,723
Dec-21
20.3
16.2
2.8
0.8
2.9
361 Degrees Intl
1361 HK
NR
n/a
4.12
n/a
8,519
Dec-21
10.3
9.1
0.9
1.0
3.3
Topsports Intl
6110 HK
NR
n/a
6.40
n/a
39,688
Feb-21
11.5
9.6
2.7
2.5
4.4
Pou Sheng Intl
3813 HK
NR
n/a
0.97
n/a
5,166
Dec-21
5.6
3.9
0.5
0.1
2.9
China DX
3818 HK
NR
n/a
0.47
n/a
2,767
Mar-21
12.1
9.6
2.7
2.6
1.5
Nike
NKE US
NR
n/a
133.46
n/a
1,647,578
May-21
35.9
28.8
14.4
2.4
0.9
Adidas
ADS GY
NR
n/a
201.00
n/a
327,297
Dec-21
20.8
17.2
5.2
4.7
1.5
Puma
PUM GY
NR
n/a
75.36
n/a
96,346
Dec-21
27.6
21.7
4.7
4.1
1.2
Under Armour
UAA US
NR
n/a
16.06
n/a
57,505
Mar-23
22.1
20.4
n/a
2.5
n/a
Lululemon
LULU US
NR
n/a
390.78
n/a
392,105
Jan-22
41.5
35.2
14.6
1.4
0.0
Skechers
SKX US
NR
n/a
39.77
n/a
49,840
Dec-21
13.6
11.0
1.6
1.5
0.0
Vf Corp
VFC US
NR
n/a
56.20
n/a
171,447
Apr-21
17.5
15.5
6.4
0.9
3.5
Columbia
COLM US
NR
n/a
88.33
n/a
44,700
Dec-21
15.4
13.7
2.7
1.4
1.3
Wolverine
WWW US
NR
n/a
22.12
n/a
14,122
Jan-22
8.6
7.5
2.4
0.1
2.6
Mizuno Corp
8022 JP
NR
n/a
2078.00
n/a
3,428
Mar-21
17.5
12.7
0.5
1.7
2.4
Asics Corp
7936 JP
NR
n/a
2077.00
n/a
24,476
Dec-21
23.8
18.3
2.5
0.7
1.5
Operating Numbers and Assumptions
Sales by Segment Growth (%)
Segment
FY20A
FY21A
FY22E
FY23E
FY24E
Shoes
11.3
50.7
10.0
17.0
12.5
Apparel
1.3
32.1
17.4
19.7
13.8
Accessories
1.8
36.5
8.0
12.0
12.0
Total
4.7
38.9
14.2
18.4
13.3
Sales by Brand Growth (%)
Brand
FY20A
FY21A
FY22E
FY23E
FY24E
Anta
-10.9
67.5
18.0
17.0
13.0
Anta Kids
-37.0
50.0
19.0
18.0
15.0
FILA
18.1
25.1
5.0
16.0
10.0
Descente & Others
35.4
51.1
35.0
30.0
25.0
E-Commerce
13.8
20.2
25.0
23.0
15.0
Sales Network
Brand
FY20A
FY21A
FY22E
FY23E
FY24E
Anta
6,851
6,422
6,472
6,502
6,522
Anta Kids
3,071
2,981
3,051
3,121
3,171
FILA
2,006
2,054
2,154
2,254
2,354
Descente & Others
457
459
574
699
909
GP Margins
Brand
FY20A
FY21A
FY22E
FY23E
FY24E
Anta
44.7
52.2
54.3
54.9
55.2
FILA
69.3
70.5
70.0
70.0
70.0
Others
65.9
71.0
66.0
66.0
66.0
Total
58.2
61.6
61.7
62.0
62.0
OP Margin
Brand
FY20A
FY21A
FY22E
FY23E
FY24E
Anta
28.3
20.6
21.0
21.8
21.7
FILA
25.8
24.7
21.0
22.0
23.0
Others
8.4
18.4
21.2
22.0
23.0
Total
25.8
22.3
21.0
21.9
22.3
Effective Tax Rate
Year
Rate (%)
FY20A
31.2
FY21A
26.9
FY22E
26.0
FY23E
26.0
FY24E
26.0
NP Att. Margin
Year
Rate (%)
FY20A
14.5
FY21A
15.7
FY22E
15.1
FY23E
16.1
FY24E
16.6
NP Att. Growth
Year
Growth (%)
FY20A
-3.4
FY21A
49.6
FY22E
10.5
FY23E
26.0
FY24E
16.8
Shareholding Structure
Shareholder
Percentage (%)
Mr. Ding Shizhong (CEO), Mr. Ding Shijia (V-Chairman), Mr. Lai Shixian (CFO) & Family Free Float
