20231013-招银国际-安踏体育-02020.HK-Earnings_cut_and_de-rating_may_end_here_9页_1mb

Anta Sports Equity Research Summary

Report Focus: Analysis of Anta Sports (2020 HK) for 3Q23 performance and outlook.

Key Highlights:

• 3Q23 Performance: Anta Sports' 3Q23 earnings were relatively soft due to slow e-commerce growth (LSD vs. offline HSD), weak domestic demand, and widened retail discounts to 28%. However, FILA's results were better than expected, driven by resilient e-commerce and product reforms, beating CMBI's estimate with low-teens sales growth.

• Turnaround Outlook: Anta’s performance may stabilize soon. No further earnings cuts or de-rating expected, and current valuation (23x FY23E P/E) is deemed too high.

• Brand-Specific Details:

  • Anta: Retail sales fell short of estimates (HSD vs. CMBI's 11%), inventory-to-sales ratio at 5 months (seasonal). Anta Kids performance mixed, but 4Q23E stabilized sales expected at 17% CMBI estimate, with no significant discount widening.
  • FILA: 3Q23 growth at low-teens (15%+), exceeding CMBI's 10%, aided by new products and functional footwear. Retail discounts stable at 24%, OP margin forecast raised to 26.5% for 2H23E, driven by product reforms and efficiency gains.

• Earnings and Guidance: Maintained FY23E guidance for stable OP margin and ~10%+ retail sales growth. Revised FY23E/24E NP forecasts up by 2%/1%, based on faster FILA growth.

• Valuation:

  • Recommendation: Maintain BUY rating.
  • Target Price (TP): HK$109.99 (up 20.2% from current HK$91.50).
  • P/E: 27x FY23E, vs. 5-year average 26x. Forward P/E band shows upside relative to peers.
  • Growth: Supports 15%/25% sales/Net Profit CAGR for FY22-25E.

• Financial Summary:

  • Key metrics: Revenue CAGR 16.7% (FY17-25E), OP margin improving to 25.4% FY25E, P/B 5.6x FY23E, ROE 31.0%.
  • Income statement: Stable net profit margin trends, P/E reducing from 30.0x FY22A to 15.4x FY25E.

• Risks: Earnings rely on recovery sustaining; aggressive promotions not emphasized.

Disclaimer: Analyst certification confirms personal views and no direct compensation ties. Standard disclosures apply, noting variability in forecasts and market risks.