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Can Sports Brand Be Independent In 09 Years?

2008/12/9 11:12:00 54

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In 2008, the Olympic effect on the mainland sports brand Lining's natural stimulus was natural, but also caused the market's attention to China's trend and Anta sports two Hong Kong stocks similar companies.

However, recently, Macquarie, an international supplier of special investment, financial advisors and financial services, issued the latest report, giving the initial rating of mainland China sporting apparel stocks reduction. It is expected that most mainland sportswear brands will decline sharply in the second half of 2009.

Coincidentally, Citigroup issued a research report in October 20th, saying that the weakening of retail prospects will drag down China's brand sportswear industry.

However, some brands are fighting back.

After the Olympic halo is fading, can the sportswear in the cold wind still be able to be left alone in the coming 2009?

明年市場增長率或降至10%

"Despite the financial tsunami this year, we can still maintain a gross margin of 30%."

A few days ago, a brand director of a large domestic sports apparel and accessories company planned to go public told reporters.

The Olympic Games are very obvious to the brand of national sports goods.

But in October, a Citigroup report pointed out that the sluggish retail business will drag down the Chinese brand sportswear industry.

The reason is that the growth rate of real disposable income in cities has dropped from 12.2% in 2007 to 9 in the first 9 months of 2008. The high cost of rent caused by the fierce competition in 7.5%. retail establishments has further damaged the profitability of the retail industry. The growth rate of the whole sportswear market may be reduced from less than 20% in 2008 to about 10% in 2009.

Recently, the Macquarie report of investment bank also gave the initial rating of mainland China Sportswear stock reduction, saying that most of the mainland sportswear brands will have a sharp decline in the second half of 2009.

"Because retail business relies heavily on third party distributors, the profit fall time is lagged behind."

擴張、派息，中國動向、李寧動作不斷

It is worth noting that this Macquarie rated China's trend as weaker than the broader market.

"The outlook for China's performance is not as optimistic as it is generally expected.

The main short-term risk of the company is the allocation of cash, because the company's business expansion strategy is more radical than Anta, and needs more capital for large-scale acquisitions.

The report said that although China's funds are in good condition, it can take advantage of the decline in the value of brand assets to buy, but the short-term risk of large-scale acquisitions may exceed the controllable range of the company, thereby undermining long-term value.

However, the rating did not affect the company's expansion plan.

According to the company concerned, Kappa brand is the main business of China trend group in the Chinese market. In the future, China will continue to cooperate with distributors to set up shops in provincial capital, first tier cities and high potential two or three line cities.

It is revealed that China is planning to set up a joint venture with its main distributors to invest directly in the main distributors, but it has not disclosed the amount involved.

Lining emphasized the health of current capital flows.

Lining has announced recently that it will distribute a special dividend of about HK $300 million before the 19 th of this month.

The Lining board said that before deciding to pay dividends, the company had carefully considered the cash requirements and capital requirements for future business development, and after the dividend payment, the company would maintain sufficient cash and cash equivalents to cope with future operations and development plans.

安踏頻入投行“法眼”

Despite lowering the rating, Macquarie is still optimistic about the long-term development of China's trend, because Kappa is still at a high growth stage in China, and the effective relocation of the brand and the strengthening of its control over distribution channels will be conducive to the expansion of the future retail network.

At the same time, Macquarie's report points out that winning in the down cycle and subsequent rising cycle requires strong popular brand awareness, stronger distribution control, more centralized supply chain and sound financial stability.

Anta sports is considered to be the only industry company that meets the above criteria.

In Citigroup's previous research report, Anta sports is Citi's only mainland sports apparel stock to buy rating.

Macquarie points out that the operating profit margin of Anta is expected to expand from 15% in 2007 to 18% and 21% this year. The recent dividend payout ratio will remain at a high level of over 50%, due to its low investment and capital expenditure.

"At present, Anta has no liability."

A few days ago, Anta people told reporters.

A person close to Anta told reporters that the company was holding billions of cash at present, and the frequency of sponsorship competitions and stars was not high, and the cost was far from that of Lining and other brands.