Market Capitalization Is Approaching HK $200 Billion, Where Is Anta'S "Top"?

The Chinese sports industry seems to be launching a "Anta phenomenon".

In recent years, whether in terms of business performance or market capitalization, Anta has long been in the dust of domestic sports brands, opening Lining, 31st degree and XTEP far away. Especially this year, Anta has been on the track of rapid growth.

On the return of the National Day holiday, Anta sports shares broke through the HK $70 mark, and its total market value continued to close to HK $200 billion. Obviously, despite the fact that Nike and Adi are still relatively far away, Anta is moving to become the world's top sports brand.

Who gave Anta such acceleration?

　　 Market value close to HK $200 billion mark

Recently, a number of agencies have predicted that the market value of Anta sports will soon exceed 200 billion Hong Kong dollar mark.

In October 8th, Anta sports intraday rose 5%, the stock price surged to HK $70.15, and hit a new high. At that time, its total market value was HK $189 billion 475 million.

Anta sports shares were then lowered, closing at HK $68.25 yesterday. Compared with the beginning of this year, the price of HK $36 shares rose nearly 90%.

Why did Anta share such rapid growth this year?

From the perspective of business performance, all of this is logical.

In 2018, Anta's total revenue for the first time exceeded 20 billion yuan, and the revenue of 24 billion 100 million yuan was the best result since Anta went public. Its growth rate was as high as 44%. In the past ten years, Anta's revenue growth was about 20%.

In August 26th, Anta sports threw out a brilliant report card.

Revenue in the first half of 2019 was 14 billion 810 million yuan, an increase of 40.3% over the previous year, achieving a gross profit of 8 billion 302 million yuan and a profit of 4 billion 257 million yuan.

In Anta sports revenue, the main brand revenue 7 billion 590 million, and FILA also contributed 6 billion 537 million of revenue, accounting for 44.14% of the revenue ratio. In terms of operating profit, Anta's main brand contributed 2 billion 442 million and FILA contributed 1 billion 894 million.

Anta sports announced the FILA operation for the first time in the earnings report, and FILA's performance also gave Anta another support for high-speed growth. This achievement "black horse" helped Anta enter the fashion track.

In recent years, Anta has formed a multi brand structure combining professional sports (Anta brand, Anta children and SPRAND), fashion sports (FILA, FILA KIDS, FILA FUSION, KINGKOW) and outdoor sports (DESCENTE, KOLON SPORT) through acquisitions and self created brands.

The growth in performance from last year has benefited from the steady growth of the main brand while the number of its brands has increased rapidly. In the first half of this year, Anta sports spent a lot of money on the acquisition of Amer Sports (amamin sports), to fill a multi brand strategy.

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 with direct sales, nearly 115 stores in China and 173 stores in Desanto.

Last year, the total number of Anta's stores was 12000. This shows that the rapid growth of Anta, the number of stores this year did not grow much.

Ding Shizhong, the founder of Anta, said that Anta is more interested in quality than the number of stores.

　　 The way to reach the top

In the first half of this year, Anta's revenue was 1 billion 900 million more than that of Lining (6 billion 255 million), 31st degree (3 billion 357 million) and XTEP (3 billion 267 million) three. Even if we take out Anta's main brand's revenue separately, we should exceed three.

On the other hand, 40.3% of the revenue growth is still the first in the industry. Lining's closest to Anta's revenue grew by 32.72%.

Net profit, in the first half of this year, in addition to Anta, none of these 1 billion.

In fact, such a performance gap has been maintained for at least five or six years. In terms of scale, profitability and market value, Anta is in a "lonely" echelon.

Anta's rapid growth has not been plain sailing. Starting in July this year, it encountered the three short selling of muddy water company, a well-known short selling organization. The two sides also carried out three rounds of offensive and defensive warfare, and eventually Anta passed through safely.

In July 7th, "muddy water" issued a report that questioned Anta's financial position which was not credible, and said that it could beautify its performance through financial manipulation. The next day, Anta's share price fell more than 7%, and its market value increased by HK $10 billion 900 million overnight. Anta then clarified the related problems.

"Muddy water" is clearly prepared. In July 9th, it continued to issue second short reports, accusing Anta's large shareholders of selling assets at a low price. Anta denied the accusation, which was largely unchanged.

In the next ten days, muddy water has issued three short reports continuously, but the situation has not deteriorated. Anta's stock price has risen all the way, and it has risen to HK $60.45 in July 24th, up nearly 18% compared with July 9th's share price.

Faced with frequent snipers in the stock market, Anta not only blocked the attack, but also allowed the stock price to continue to rise rapidly.

In July 22nd, Anta announced that its profit margin was expected to grow by less than 50% over the first half of the year, allowing many institutions to maintain their confidence. At that time, the target price offered by many agencies was basically realized.

　　 Three big gambles

Compared to the 2007 launch, Anta's revenue has increased by 7.5 times, and its market value has also approached 200 billion. Anta is the only Chinese clothing brand in the 2019 most valuable 50 apparel brands released by an international agency, ranking 21.

From small rural factories to the international stage, Anta has become the current Anta, and several decisions are crucial in its development.

In 1999, Anta's profit was only 4 million yuan. But this year, they spent 800 thousand yuan "huge sum", invited the table tennis national team member Kong Linghui to play the role of endorsement.

Inviting spokesmen with 1/5 profit is a crazy move in any era.

However, Anta founder Ding Shizhong did not stop there. He also used almost gambling in the way of annual profits to advertise in CCTV. If there is no effect, then Anta may be dragged down. Fortunately, in 2000 Sydney Olympic Games, Kong Linghui won the gold medal in the men's singles, and the slogan "I choose, I like" helped Anta quickly establish its brand.

This win gives Ding Shizhong more confidence.

Anta sports began to use this marketing method frequently, through signing endorsement, sponsoring sports events and other ways, from 24 national teams sponsorship gradually extended to international sports events, in this respect can be said to be handy. This year, FILA released the trend sports brand FILA FUSION and signed Wang Yuan as spokesperson to enter the youth market.

After 10 years, Ding Shizhong gambled again.

In 2009, Anta spent HK $650 million to acquire FILA's trademark right to use and operate in China. This time, Anta betting more, using more than 2/3 of the net profit of the previous year. At that time, FILA was in a state of deficit for many years, and it was far from the European market.

Ding Shizhong won again.

After some integration, FILA has gradually become the high-end product line of Anta, and has contributed a stable revenue to Anta. Especially since last year, FILA's revenue has maintained a very high growth rate.

The acquisition of FILA helped Anta develop its nationalization and multi brand development, and accumulated new brand management experience for it. Since 2015, Anta sports has acquired many international brands, forming a multi brand group, laying the foundation for internationalization.

In the first half of this year, Ding Shizhong gamble once again for Anta to become an international first-class sporting goods company.

The consortium led by Anta acquired the Amer Sports of Finland giant enterprise in 46 euros, holding 57.95% of Anta sports in the main body of acquisition and Mascot JVCo of joint venture company. In March 2019, Anta sports injected 11 billion 707 million yuan into it.

The acquisition was considered by Ding Shizhong to be the most important decision ever made.

Amin sports has 13 private brands including Salomon (Salomon), Arcteryx (Wilson), and Wilson (World). Salomon is famous for its skiing products.

After the completion of this acquisition, Anta has taken over a number of brands at a time, and the brand group has continued to expand. At the same time, it can also get more room for growth with the help of these brand channels, and steadily and steadily based on the arena of the international arena.

These three big gambles seem crazy, but in fact it is a clear vein of Anta sports development. Perhaps, in Ding Shizhong's mind, he has already targeted his opponents like Nike and ADI.