Anta Sports Releases Earnings Forecast For Fiscal Year: Expected 2019 Performance Meets Expectations

Recently, Anta Sports Products Limited (hereinafter referred to as "Anta sports") issued a profit forecast for the 2019 fiscal year. It is estimated that the net profit growth in the 2019 fiscal year is no less than 45% (excluding AMER) /30%+ (including Amer).

Fangyi textile team Feng Yi group analysis said Anta sports performance forecast overall compliance with expectations. (1) revenue grew rapidly, with sales of Anta brands and non Anta brands growing by more than 35%. (2) the increase in profit is due to the increased contribution of retail business (gross margin is higher than wholesale business), and the ratio of operating expenses to total revenue is stable. In addition, it is estimated that the profits and losses of equity investments generated by Amer will not exceed 650 million loss (including less than 200 million yuan one-time acquisition cost and no more than 500 million yuan earnings loss). After considering the impact of Amer, the net profit of the 2019 companies is expected to grow to 30%+.

2019Q1-Q3 performance review: Anta brand retail is flat, not Anta brand maintains high growth. (1) Anta brand, 2018Q1, Q2, Q3, Q4, 2019Q1, Q2, Q3 retail sales growth rate were 20-25%, low double-digit, double-digit, double-digit, double-digit, double-digit, double-digit, 2019Q3 retail sales and Q2 growth rate is basically flat. Among them, Anta's big cargo and low flow double digit growth, children about 25%, electricity supplier about 30-35%, 2019Q3 retail discount of about 28% off (hoist upgrade), library sales ratio is close to 5 months (ring to improve). (2) non Anta brands, 2018Q1, Q2, Q3, Q4, 2019Q1, Q2, non Anta brand retail sales growth rate (mainly FILA) reached 80-85%, 90-95%, 90-95%, 80-85%, 90-95%, and Q3 respectively. The growth rate of brand retail sales increased. The growth rate of other brands increased, with the growth rate of about 40%, about 70% of children, 200% of electricity, about 80% of the electricity supplier, 20 percent off of retail discount, and 5 of sales to 6 months. The overall non Anta brand continued to slow down but remained high.
 
2019 and future prospects. (1) 2019 Revenue: we expect the 2019 group's revenue to reach 35+%, of which Anta brand and FILA brand retail are running at 15-20% and about 50%. 2 to 2020 overall target: it is estimated that all brands, Anta and FILA series CAGR will reach 15-20%, double digits and over 30% respectively. 2019 the number of stores is expected to be: Anta (including children) stores look up to 10300-10400 (+2.4%~+3.4%) homes, FILA (including FILA KIDS/FILA FUSION) stores look up to 1900-2000 (+15.0%~+21.1%), DESCENTE stores look up to 130-140 (+11.1%~+19.7%), KOLON SPORT stores hope to reach 170-180 (-6.1%~-0.6%), KOLON stores look up to 90-100, and there are 120-125 stores in the stores.

[investment advice]

It is expected that the net profit of 2019/2020 /2021 will reach 54.56/74.90/90.77 billion yuan, an increase of 32.98%/37.28%/21.19% over the same period last year, corresponding to P/E for 34/25/20, and maintain a "highly recommended" rating.

[risk hint]

(1) the economic downturn exceeds expectations; (2) the sales of main brands are lower than expected; (3) the development of new brands is less than expected.

Author: Fang Yi Fang Feng Yi team