Anta Sports - Recovery in consumption spending Anta Sports P | Rakuten Trade Ideas 🎯

Anta Sports - Recovery in consumption spending

Anta Sports Products Ltd (2020-HK) announced that 2H22 earnings beat market expectations, and annual revenue continued to hit new highs.

Anta reported revenue for 2H22 was RMB27,686 million, up 4.4%. 2H22 net profit was RMB4,002 million, up 3.1% year-of-year. Diluted earnings per share (EPS) was RMB1.43 per share, decreasing 12.16%, beating analysts' expectation of RMB1.36 per share.

Anta Sports' recorded revenue of RMB5.65 billion in FY22, an increase of 8.8% compared to the prior year. Its annual revenue exceeds Nike China's, and it has made significant progress in the globalization process. The Group's "Single-Focus, Multi-Brand, Globalization" strategy has shown remarkable results.

2H22 Anta brand revenue grew by 6.9%, while the FILA brand declined by 2.3%. The profit growth of the Anta brand is mainly due to the growth of online sales and the increase in DTC (direct-to-consumer) revenue. However, the decline for FILA is mainly due to the negative operating leverage of the COVID restrictions.

Anta released its 2022 ESG report with implemented the ESG strategies action plan in three core areas. Anta's ESG strategy is also widely recognized by the international market and won eighth place in the world's most transparent ESG report by Global ESG Monitor 2022.

Moving forward, analysts expect the inventory to sales levels for both Anta brand and FILA brand to be currently between 4.5 to 5.0 months, which is an impressive improvement from the 4QFY22 levels. Anta gave the guidance for revenue to grow by double digits year-of-year and net profit to grow even faster than revenues.

The share price of Anta is up 16.34% year-to-date (1-year), and the last price was HKD111.80

Bloomberg consensus rating has 55 Buys with a 12-month target price of HKD132.09

Sources: Anta Sports Product Limited, Sina Finance, China Merchants Securities (HK)

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