Anta Sports Intends To Issue About 7 Billion 655 Million Convertible Bonds, Most Of Which Will Be Used To Repay Loans.

The Anta Sports Products Limited (hereinafter referred to as "Anta sports") announced today (January 14th) that after the closing of January 13th, the company signed a subscription agreement with the ANLLIANCapital and the operator on the proposed convertible bond issue. The convertible bond of Anta is five years, with a scale of up to 1 billion 2 million 500 thousand euros (7 billion 655 million yuan), and the initial change price is HK $105.28 per share.

Anta sports said that the issuance of bonds could provide additional funds for the company to repay its existing debt at lower cost and optimize its financial structure, further enhance its working capital and possibly strengthen its capital stock base.

According to the insiders, the issuance of Anta sports convertible bonds is mainly used in several aspects. The first is to repay the 850 million euro loan for the acquisition of Amer, the original interest rate is 2.3%; two is the supplementary working capital; and the three is the general corporate purpose. The issuance of convertible bonds can optimize the original debt structure of Anta sports, save financial costs, and provide financial support to the company's daily operation.

Anta sports announced the blueprint for the future development of Amer earlier. The company guidelines Amer revenue growth in the next 4-5 years will reach 10%-15%, and the profit growth rate will be higher than the income growth rate. It is estimated that from 2020, Amer will start to contribute positively to the group. Anta sports preliminary plan, in the next 5 years, the compound income growth rate of AmerSports will reach 10-15%. Considering that Anta and AmerSports need time to develop new market and adjust their operation structure, AmerSports is expected to maintain high unit income growth in the next two years.

With the Arc 'teryx, Salomon and Wilson as its main products, it has expanded its brand of shoes and clothing to develop into a brand with a revenue scale of 1 billion euros. Two is to accelerate the retail layout and the proportion of DTC (offline retail + e-commerce), to increase the retail sales of more than 2 times, to accelerate the development of e-commerce channels, to plan a compound annual growth rate of 30-40%, three to focus on developing China and the US market, to increase the number of self operated stores in China to 5-8 times existing, to increase revenue to 4 times the existing market; to increase the US market revenue to 1.5 times the existing scale; four is to grasp the trend of sports and fashion, to adjust the product structure of the three major brands, and to increase the product range and extend the use of life based on maintaining the brand professional gene. Anta sports and AmerSports's development plans for the next five years are mainly concentrated on the following points: first, focus on the big brands in the brand portfolio.

From the data of listed companies, Anta's multi brand position is accurate since 2019, and the trend of Fila fashion is driving the continuous growth of revenue. Lv Ming, an analyst at Tianfeng securities, believes that there are several reasons for the sustained and rapid growth of Anta sports in 2019: first, the sales performance of the group's brands is good, leading to an increase of more than 35% in revenue. It is expected that Anta's main brand will achieve double-digit growth, FILA brand will maintain rapid growth, it is expected to be over 50%, retail sales of Descent and Kingkow will continue to increase, and the two is Anta sports's operating profit margin will continue to increase compared with 2018. The main components are: the proportion of retail business with higher gross profit margin is increased, and the proportion of operating expenses in the proportion of income is relatively stable (the cost rate is stable). Anta brand is expected to maintain steady growth in 2019, and FILA will maintain relatively high growth. It is expected that in 2019, the number of Anta brand flow will increase in double figures. FILA's overall water flow will increase by more than 50%. The Descente flow in other brands is expected to reach 8-10 billion yuan. If we do not consider the loss of the joint venture company, the net profit of the company will be no less than 5 billion 900 million yuan in 2019, and it will grow by more than 45% over 2018.