ANTA Sports Products Limited is principally engaged in the manufacture and trading of sporting goods, including footwear, apparel and accessories in the Mainland China. The Company focuses on sportswear market in China with a brand portfolio, including ANTA, ANTA KIDS, FILA, FILA KIDS and NBA. Through its subsidiaries, the Company is also engaged in the manufacture of shoe sole. The Company’s subsidiaries include Anta Enterprise Group Limited, Motive Force Sports Products Limited and REEDO Sports Products Limited.
Rate cut in China to boost domestic demand. The People’s Bank of China cut the one-year loan prime rate by 10 bps to 3.7%, and the five-year loan prime rate was lowered by 5bps to 4.6%. Compared to the global rate hike tide, China is adopting expansionary monetary policies as the economic recovery has slowed down due to a new wave of domestic omicron infections. We expect the loosened financial conditions to boost consumption in the coming months. More importantly, the rate cut is a signal to the market that the central government has started to ease the regulations on the key growth sectors such as property and technology.
Positive profit alert. The company recently announced that the FY21 profit attributable to equity shareholders of the company before/after taking into account the share of loss of a joint venture increased by no less than 35%/45% respectively.
Retail sales performance updates:
ANTA brand: mid-teens positive growth YoY in 4Q21 and 25% to 35% positive growth YoY in FY21.
FILA Brand: high-single digit positive growth YoY in 4Q21 and 25% to 35% positive growth YoY in FY21.
All other brands: 30-35% positive growth YoY in 4Q21 and 50-55% positive growth YoY in FY21.
The updated market consensus of the EPS growth in FY22/23 is 26.2%/24.8% YoY respectively, which translates to 27.3x/21.9x forward PE. Current PER is 35.8x. Bloomberg consensus average 12-month target price is HK$148.27.
