Shorting Three And Exhausting Anta Through Muddy Water

Anta entered the third round with muddy water. In July 11th, muddy water research company (hereinafter referred to as "muddy water") issued third short selling reports to Anta, claiming that Anta's FILA shops were not in a real number. Subsequently, Anta issued two similar clarification announcements to refute. But when muddy water persevered in pursuit of Anta, Morgan Stanley (hereinafter referred to as the "big Mo") issued two reports to support Anta.

　　 Muddy water three hits FLIA shop quantity is not real.

In July 11th, mudshui released Anta's third short selling report, saying that investors could not believe the number of Anta FILA stores, and pointed out that Anta probably reported fraudulent financial conditions in the FILA brand.

In the first short selling report, muddy water considered Su Weiqing as an insider of Anta in Beijing Ji Yuan Sheng Bao International Trade Co., Ltd., as well as an agent of two dealers. Su Weiqing owns 46 FILA stores in Beijing, and Anta has claimed to hold all FILA stores.

Muddy water says Anta has been reporting to its auditors and the public about the number of FILA, claiming to have all FILA stores. It is unclear whether Anta will merge financial data from FILA stores that it does not own. This makes muddy Shui believe that Anta is likely to report fraudulent financial conditions in the FILA brand.

Muddy water research report shows that Anta's online FILA store location shows that there are 42 stores in Beijing. Beijing Business Daily reporter inquires FILA official website shows that FILA has a total of 42 stores, of which 9 are clearly designated as kids shops; however, login High German map can be queried to 66 FILA shops, 16 of which are kids shops.

Two entities that run FILA stores mentioned in the short selling report are Su Weiqing (Beijing) and Beijing Jiyuan Ding. The Beijing Commercial Daily telephoned the above two companies.

In the face of the third accusation, Anta announced that the board strongly denied the allegations in the report, saying the allegations were not accurate and misleading.

Cheng Weixiong, general manager of textile and clothing management and Shanghai Liang Qi Brand Management Co., Ltd., believes that this short selling has strong pertinence and has certain persuasive power. It still has certain lethality. It shows that Anta needs to strengthen the transparency of related transactions. Besides, the rapid growth of FILA has really surprised domestic and foreign operators, and the difference between the performance of FILA and Japan and Korea is too large, which has attracted the attention of short selling organizations. However, the early development of FILA has been dominated by direct battalion. Indeed, the style of the trend movement has attracted a wave of consumers' positive experience to participate. The high growth is understandable. Local consumers prefer to follow the trend of sales and encourage Gao Yeji.

Da Moli likes Anta's business.

It is worth mentioning that, in the Anta and muddy water for the "tug of war", Da Mo also released two research reports on Anta. In the July 11th report, the company pointed out that to return to fundamentals, the latest channel survey showed that the sales of Anta brand in the two quarter accelerated again, and indicated that "Anta likes business".

In the previous July 4th report, Anta's rating was increased. Anta sales growth of Anta sports has been strong, but it will gradually slow down based on the opening of stores, believing that the growth rate will not be higher than the first quarter of this year.

In addition, Da Mo also disclosed the latest channel survey. Anta's sales grew more strongly in the two quarter, including the better product mix and favorable weather, Anta's core sales growth accelerated in May and June, the company said. Retail discounts performed well in the year-on-year period, and channel inventory was in good condition.

At the same time, Anta said that Anta is a highly adaptable company and has made some changes in this season: the dealer has greater flexibility in ordering the story pack, so as to better balance the display of products in the store and the sales performance of the dealer, and reintroduce some of the more basic SKU so as to regain the market share in some three or four level markets.

Anta believes that the target price is HK $60. However, there are some risks in the price target, including the potential interference of American sports, the competing family brands and the reduction of risks. The optimistic view of valuation depends on the potential of strong sales Compound annual growth rate in the next 2-3 years, the risk of sales growth - major mistakes in product design and margin risks - the absence of sales growth may cause operational deleveraging.

At the time of Anta's launch, Anta also released its two quarter results in 2019. Data show that in the two quarter of 2019, the retail sales of Anta brand products (calculated by retail value) compared with the same period in 2018, the median growth of 10%-20%; the retail sales of other brands in the two quarter of 2019 (calculated by retail value) increased by 55%-60% compared with the same period last year.

　　 Behind the confrontation, Anta is going to fill in the international class.

Although the confrontation between Anta and muddy water has been going on, it seems that the impact is not big. Anta's stock price dropped 8% after the first short selling report was issued in muddy water, but it was suspended after July 9th. In July 11th, Anta closed at HK $51.3, an increase of 0.95%. As of 16 July 11th, Anta's market value of HK $138 billion 573 million, basically stable, has not dropped significantly.

In this regard, insiders believe that the muddy water short selling "attack" has been continuing, and does not rule out its follow-up will also be released short selling report, but the muddy water produced facts or evidence is not much substantive, no "fatal lethality".

For muddy water short selling report, Anta also showed "very calm". Prior to that, Anta related responsible person replied to the Beijing Commercial Daily reporter when it was sold short, "Anta has been short, but the fundamentals have not been affected. At the same time, Anta's senior executives haven't reduced shares in the past five years, and the major shareholders have not yet been hypothecate."

However, in the three clash between muddy water and Anta, no matter the short selling report of muddy water or the clarification and response of Anta, the word "relevance" appeared at high frequency. At the same time, in the clarification of the response, Anta has repeatedly expressed such information as "not knowing any other information that must be announced to avoid false market conditions of the company's securities, or any insider information to be disclosed under the securities and Futures Ordinance".

"Domestic brands in the early stages of development belong to barbaric growth. They lack standardization from the corporate governance and accounting methods, as well as the openness, fairness and transparency of related transactions of listed companies." In Cheng Weixiong's view, this is also a lesson that Chinese local enterprises need to make up when they embark on the international stage, including Anta.

Although the short selling organization's attack is not fatal, for the enterprise, short selling will not only disturb the daily business of the enterprise, but also bring the trust crisis to the investors.

"Short selling is well prepared. It is worth waking up to Anta. Why is it that many short selling organizations sell short?" In Cheng Weixiong's view, even if Anta is in danger, if the selling point of the short selling organization has not been fundamentally solved, the short selling organization will not exclude the possibility of continuing to find evidence and data for short selling. In fact, short selling in the international market is also an alternative supervision to the public enterprises.

Cheng Weixiong said bluntly: "this has also put forward new requirements for Anta. For example, in the normal operation of an enterprise, it is necessary to take into account the consistency between the internal and external communication. In the process of maximizing the market profit in the process of rapid development, enterprises need to return not only shareholder value, but also social value; the ambitions of enterprises need to match their business capabilities with their operational resources, so they can not spoil their growth, and they need a growing life cycle."