Anta'S Recovery Is Far More Robust Than That Of The Same Industry.

The middle and low-grade consumer goods industry in the mainland has gone through the cold winter and entered the stage of eliminating weakness and staying strong. Individual enterprises have further established sound market position and financial strength by virtue of good management quality and become leading stock, including Anta sports.

Hong Kong stocks fell sharply last week.

But against the top of the market, the value of the stock valuation is not expensive, in the fluctuating market, I believe that it is still a stable choice.

Anta was laid down four to five years ago.

The leading position of the industry.

Only after experiencing the slowdown in the mainland economy and the oversupply of industries, the sporting goods industry fell to the lowest level in the middle and low retail industry. Anta's stock price dropped to about 4 yuan in 2012, and has rebounded back to its former high level.

In those days, Anta was the leader of the domestic demand growth unit. After four years, although the industry is still in a low ebb, Anta's income and profit base has remained the same level. The strength of the past four years has made the financial situation far more robust than the current year.

Anta's net profit in 2013 reversed 3% to 1 billion 315 million yuan, while revenue fell 4.5% to 7 billion 281 million yuan.

In the first half of this year, the industry was slightly stabilized. Anta has become the most resilient company among sporting goods stocks in the mainland.

First half turnover

Anta's revenue rose 22.4% to 4 billion 122 million yuan in the first half of this year, 28.3% yuan to 803 million yuan in net profit, and 4 percentage point to 45.1% in gross profit margin.

As for interbank Lining, XTEP international and 31st degree, the income of the same period increased only in unit figures.

Larger scale, but faster growth, shows that Anta's market position and execution capability are far better than that of its peers.

In addition, the order of sporting goods in the first quarter of 2015, which ended in July this year, still maintained an annual double-digit increase, reflecting that the recovery continued and the performance of other interbank shares was also less than that.

Brand cooperation with NBA

Business strategy is flexible, which is one of the low tide of Anta confrontation.

The Fila brand, which accounts for 10% of its revenue, has become a driving force for sales growth through changing wholesale channels to retail outlets.

As for online sales, it accounts for about 5% of Anta's overall sales.

The group sells products to distributors through the Internet, resale them to its final customers, and sells some of its exclusive products online for sale.

According to the mainland news, PEAK sports ended its seven years of cooperation with the US professional basketball league (NBA), and Anta immediately held a hot pile to replace NBA.

Anta has the right to use NBA brand to publicize sports shoes products. Annual sponsorship fee is 200 million yuan, equivalent to 2% of sales in 2015.

Goldman Sachs believes that once the deal is confirmed, Anta will be able to sell NBA related products and generate revenue.

The company expects to sell more than 3 million pairs of shoes to fill the cost, equivalent to 7% of the annual sales of sports shoes, or the sale of one pair of shoes a day at each sales point, which will enable the paction to break even.

The national policy also has a long-term development.

Li Keqiang, premier of the State Council, presided over the executive meeting of the State Council on September 2nd, and advocated to revitalize and make good use of the existing sports facilities, and actively promote the opening of public sports facilities to the society.

The market expects that this will enhance Anta's long-term demand for sporting goods.

Earnings growth is comparable to Heng An

After winter, the sporting goods industry is no longer a growth industry. As for Anta, it has become a mature consumer goods enterprise.

Because of the high base and fixed investment in the industry, Anta's leverage is about doubled, assuming that revenue will rise by 10% and profits will rise by about 10%.

In other words, Anta's earnings volatility will not be too big in the future.

In the first half of this year, the gross profit margin of Anta increased by 4 percentage points, which accelerated the profit growth to 28%, but the trend of widening gross margin was not sustainable for a long time.

As for income, it is also difficult to increase significantly. It is clear that in the future, Anta's profits will not be expected to explode.

With Anta's good execution ability, it will stabilize in the industry. With the NBA agreement, the sales revenue will be increased by about 20% in the next two years.

As of the end of June, the group's net cash amounted to 4 billion 548 million yuan, equivalent to 1.8 yuan per share net cash, which shows that the financial situation is quite robust.