Earn More In A Year Than Lining, XTEP And 331 Degrees. This Is Anta.

Short selling may be another affirmation of Anta's status.

Anta's recent year has not been stable, and has suffered three short runs. In July this year, it received 5 short reports of muddy water.

The bullets are concentrated on the fast growing FILA under the Anta flag.

In August 26th, Anta threw out a semi annual report and first disclosed the financial data of FILA. In the first half of 2019, Anta's revenue was 14 billion 810 million yuan, up 40.3% from the same period last year. Among them, FILA achieved 6 billion 538 million revenue, an increase of 80% over the same period, a gross profit margin of 4 billion 673 million and a gross profit margin of 71.5%.

At the beginning of this year, the stock price of Anta was HK $30, which is now up to HK $65, and its market value has risen from HK $100 billion to 175 billion 500 million.

The short seller loses his fortune.

　 How big is Anta?

In the first half of 2019, Anta's revenue was over 14 billion 800 million, more than that of Lining, XTEP and XTEP.

Earnings report shows that in the first half of 2019, Anta's main brand revenue reached 7 billion 590 million. In the same period, Lining, XTEP and 31st degree revenue were 6 billion 255 million, 3 billion 357 million and 3 billion 267 million respectively. And Anta's revenue grew 40.3% over the same period last year, the growth rate ranked first in the industry.

FILA contributed 6 billion 537 million of Anta's revenue to nearly half of Anta's total revenue in the first half of the year. In the first half of the year, 71% of the gross margin was very rare in the clothing industry. Meanwhile, the gross margin of Anta's main brand was 42.5%, Lining was 49.7%, Nike was 44.7%.

In the first half of 2019, Anta's main brand contributed 2 billion 442 million profit to Anta group, while FILA was 1 billion 894 million. FILA's operating interest rate is 29%, less than 32.2% of Anta's main brand. Moreover, the profit margin of Anta's main brand increased by 5.4%, and FILA increased by 0.2%.

It can be seen that although the FILA is developing at a high speed, Anta's main brand still takes on a heavy profit and occupies 51.2% of the total revenue.

Zheng Jie, President of Anta brand, explains the difference between the profits of the two brands. The total operating cost of the FILA stores such as store rents and shop assistants is borne by the group itself, while most of the Anta brand stores are operated by distributors and franchisees, and the operating costs are relatively low.

According to the financial report, as of June 2019, the total number of stores in Anta brand stores (including Anta children) was more than 10200, and there were nearly 1800 FILA stores in the main camp, 115 in Desanto's stores, and 173 in the Dragon Sports store.

Compared with the expansion speed of stores, Anta is more efficient and stable. Ding Shizhong, chairman of Anta, said that the number of stores is not the pursuit of Anta, but the quality is just the same as that of Anta.

Why is Anta?

Different from fashion clothing industry, the sports industry has a high degree of brand concentration. Once formed, the moat is hard to shake.

After 2012, sports shoes brands are in a general stock crisis. In order to get rid of the increasingly fierce price war, many sports brands are seeking transformation. There are two ways at the moment, one is to seek the upgrading of its own brand, or the other is to promote the development of multi brand matrix through asset merger and acquisition.

Lining's choice at that time was the former, killing the second and second line, but finally defeated under the encirclement and suppression of Nike and Adidas. Anta chose the latter, insisted on the positioning of the main brand in the three or four line, and acquired checks and balances between the second and the high-end brands through the acquisition of FILA and other international brands.

In the first half of 2019, FILA not only contributed nearly half of Anta's revenue, but maintained a high growth rate of 80%. According to Anta's internal expectations, the FILA revenue scale will exceed Anta's main brand for the first time in 2020, and will become the main force to drive Anta's continuous growth.

In a series of acquisitions, FILA is undoubtedly Anta's treasure.

However, when Anta bought FILA from BELLE ten years ago at HK $3 billion 650 million, this business is not optimistic. How does a middle and low end brand manage a high-end brand? Moreover, the brand lost 50 million yuan in that year.

After the acquisition, Anta repositioned and operated FILA, positioning it as a high-end brand in China, and forming a complementary synergy effect with Anta's main brand. From 2011 to 2014, FILA started the retail revolution, and restores its stores from dealers to direct management. From then on, FILA's performance began to fly rapidly.

Tasted the sweetness of acquiring FILA, Anta's "multi brand" transformation accelerated further.

In 2015, Anta completed the acquisition of the British outdoor leisure and mountaineering brand SPRANDI; in 2016, Anta set up a joint venture and began to operate DESCENTE business in China; in 2017, Anta acquired KINGKOW business and established a joint venture to operate KOLON SPORT business in China.

In 2019, Anta completed the acquisition of AMER SPORTS, which has its own high-end high-end sports brands such as eulogy, Wilson and song Tuo.

"We bought Amber Sports mainly to see the growth of the Chinese market. The brand of the company is very professional in all fields, and its sales in China are very small." Ding Shizhong said.

However, the purchase price of Amber Sports is about 37 billion yuan, which has created the largest amount of mergers and acquisitions in China's apparel industry. If Anta wants to get its control, it needs not only to deplete its cash reserves and cash equivalents at 9 billion 300 million yuan, but also needs external financing of about 10 billion yuan.

In 2018, Anta's net profit was 4 billion 100 million yuan.

This is a move for Anta to further enter the high-end brand, and it can also get rid of the dependence of FILA on this high-end brand. "On the frontline battlefield, Nike's advantage is hard to shake in the short and medium term, and our acquisition of Amber can quickly occupy high points in the market segments and form a new confrontation pattern of differentiated competition."

The multi brand strategy is called the key to success by Anta. This process requires courage and luck. And a little patience is needed.

FILA's brand cultivation and effort took ten years. In addition to Anta and FILA, the total revenue of other brands purchased by Anta group in the first half of 2019 was 680 million yuan, and overall profit has not yet been achieved.

Ding Shizhong bet on that?

The development of an enterprise often carries the brand of its founder and determines to some extent how far it can go.

In Jinjiang, Fujian, Ding Shuibo, Jordan, Ding Guoxiong, founder of Ding Jiantong, President Ding Wuhao, Anta's Ding Shizhong, are among the many founders of Ding's name, such as XTEP, Ding Guoxiong, Ding Guoxiong.

In 90s, Jinjiang County of Fujian province gathered more than 3000 shoe factories and produced 1/5 of the shoes nationwide. In 1987, Ding Shizhong, 17, went to Beijing with 600 pairs of shoes on his back, and later placed them in the Wangfujing.

The beginning of the story is not the same. And when the times change, the fate of Jinjiang shoes comes to the fork. Ding Shizhong showed the courage to gamble differently from others. And in the next story, he showed a rare sense of caution and sense of boundaries.

Jinjiang shoes began to rise with the foundry industry. With the intensification of competition, profit margins have been squeezed. Ding Shizhong realized that there was no future for the foundry, and the brand was the way out. In 1999, Ding Shizhong took the lead and signed the world's table tennis men's singles champion Kong Linghui with the 800 thousand endorsement fee. Then he spent 3 million in the CCTV advertising campaign. In those days, Anta made a profit of 4 million a year.

Ding Shizhong's heart is not without struggle. What is the meaning of Anta's emergence as a "grassroots brand" on the screen in the era of Nike, ADI's top brand advertisements on TV?

Just like Ding Shizhong was sleepless all day, many people suspected that the days were very comfortable, so why bother?

After 2017, Ding Shizhong's "toss up" goal has become "not Nike of China, Anta of the world".

That endorsement became the turning point of Anta's branding. Anta sold 10 times a year after endorsement. In 2007, Anta went public in Hongkong with a market value of HK $20 billion and ranked among the fifth largest sports brands in the world.

In 2012, the domestic sports brand continued to slump, high inventory, Ding Shizhong deeply felt that "no transformation will die", so pro channel channel reform, that year Anta revenue for the first time over Lining, standing on the top of the domestic sporting goods industry.

Ding Shizhong's "big gamble" continues: for example, the acquisition of FILA in 2009 and the acquisition of Amber Sports in 2019.

"Big gamble" is bound to face greater risks. For example, after being listed, the "noble bird" has undergone a series of expansion. As a result, the acquisition business has become a hot potato, which has further dragged down its main business and plunged into a financial crisis.

"Anta is not an adventurous company, but an insurance company." Ding Shizhong said.

In the process of market transformation and consumption transformation, numerous brands fall down, some are blind expansion, but ignore the main business, the foundation is not stable, they are unable to resist risks, and finally collapse. Some are conservative, lack of perception of market changes, and eventually abandoned by consumers.

The only thing that is certain is that the industry shuffle will never end.

Anta has realized that the essence of consumer upgrading is from the transaction era to the experience era, and the core advantage of business is changing from "price" to "experience". This has become the focus of its future development.