20240709-招银国际-安踏体育-02020.HK-Stay_cautious_about_FY24E_after_an_inline_2Q24_9页_1mb

Anta Sports (2020 HK) Research Summary

Key Points:
This report analyzes Anta Sports' FY24E performance and outlook, maintaining a "BUY" rating with a target price of HK$101.38. Overall, despite some cautiousness on key factors, the stock is considered fairly valued and retains upside potential.

Analysis

• Current Performance: Retail sales growth in Q2 FY24E was aligned with expectations per major brands, with Anta performing strong while FILA showed weakness. Retail discounts demonstrated resilience, particularly online where discounts improved YoY for Anta despite stable offline. Both brands maintained decent profitability for the financial year.

• FILA Assessment: There's a slight shift in cautiousness toward FILA, but the outlook remains positive for Anta, making it our top pick in the sector due to its resilient performance and market share gains.

Guidance and Projections

• Sales Growth: Management maintained guidance for 10%-15% retail sales growth for both Anta and FILA. Anta is expected to exceed expectations in the second half of FY24E, driven by:

  1. New product launches (including Olympic-related, Kyrie Irving, and value-driven products).
  2. Enhanced store formats (Sneakerverse, Anta Champion, and Super Stores).
  3. Improved brand building through events and initiatives.
  4. Strong online growth, especially via Douyin and Xiaohongshu platforms.

• FILA Catalysts:

  • Continued strength in e-commerce.
  • Accelerated physical store refits.
  • New product releases (golf and Olympic-related items).

Financial Adjustments

• EPS & Margins: Net profit forecasts for FY24E/FY25E were adjusted downward by 0.3% and 2.0%, respectively. Anta/FILA's operating profit margin is expected to stay around 20%+/25%+, supported by better retail discounts, channel shifts to higher-margin digital platforms, reduced rental expenses, and improved efficiencies.

Valuation

• Target Price: HK$101.38, 42.1% upside from current price (HK$71.35), based on a 20x FY24E P/E unchanged at 20x.
• Peer Comparison: Valuation is reasonable for the sector, trading at 14x FY25E P/E which is lower than its 5-year average of 26x.

Risk Factors & Concerns

• Retail discounts remain closely monitored; analyst confidence in Anta vs FILA varies.
• External factors like macroeconomic conditions may impact performance.

Financial Highlights

• Revenue & Profitability: Anta projects continued double-digit CAGR (12%) in revenue from FY23–26E.
• P/E Trend: Currently at 14.1x, reflecting optimism compared to its longer-term average.
• Debt-to-Equity: Gearing ratio increasing moderately, but remains manageable.

Disclaimer: This summary reflects the key points discussed in the comprehensive analysis. Please ensure to cross-reference with the original report for complete details.