Anta: Holding Its Own Brand To Enjoy An Overvalued Value

Anta (2020) is a sporting goods manufacturer in the mainland. Compared with other manufacturers, Lining, like Anta (2331), has the advantage of owning its own brand, so the market can give it a higher valuation.

Anta is mainly engaged in the design, development, manufacture and marketing of sportswear. At the same time, it sells its products to distributors by wholesale, and announced interim results in the first half of the year. The net profit in the first half of this year was 203 million yuan, up 2.85 times.

The turnover amounted to 1 billion 498 million yuan during the period and the operating profit was 234 million yuan.

The sharp rise in earnings was mainly due to an increase in the number of stores and strong growth in same store sales.

Benefiting from the increase in the income of the mainland residents, the increase in the number of high-end products ordered by distributors, and the increase in the brand awareness of the company, the retail price of its products has risen sharply during the period. The average retail price of footwear has increased by 34.9%, while clothing has increased by 27%. The price is expected to increase by the same margin in the second half of the year, and the growth of the same store sales in the first half of the year will be as high as 50%.

The gross profit margin in the period increased by nearly 9 percentage points to 33.5%.

In addition, the group added more stores in the second half of last year, and the number of outlets increased by 130, with the number of outlets reaching 4238, and it is expected to increase to 4500 in the year to set up a good foundation for earnings growth in the coming year.

In addition to its own brand, the group has entered into a retail agreement with Adidas, which sells Adidas and Reebok (Reebok) products in the mainland, and has also signed redistribution agreements with authorized distributors of Kappa.

Brand management (including self owned and licensed brands) can attract customers by brand effect. Compared with international customers, the bargaining power of mainland consumers is obviously lower, and they are generally willing to pay more money for international brand products. Therefore, the group can pfer costs to consumers to offset the negative impact of rising production costs.

UBS issued a report yesterday, giving Anta a "buy" rating, the target price of 11.73 yuan, so that Anta's share price yesterday rose 0.5% against the market and closed at 9.84 yuan. Recently, the market has been beset with haze.