EBSCN·2024-08-28 05:22Investment Rating - The report maintains a "Buy" rating for Anta Sports (2020.HK) with a current price of HKD 71.65 [1] Core Views - Anta Sports reported better-than-expected performance in the first half of 2024, with a revenue increase of 13.8% year-on-year and a significant net profit growth of 62.6% including the impact of the joint venture AMER [6][11] - The company emphasizes high-quality growth and substantial share buybacks, reflecting confidence in future performance [11] Financial Performance - Revenue for the first half of 2024 reached CNY 33.74 billion, with a net profit of CNY 7.72 billion, marking a 62.6% increase year-on-year [6] - Earnings per share (EPS) stood at CNY 2.75, with a proposed interim cash dividend of HKD 1.18, resulting in a payout ratio of 50.1% [6] - Gross margin improved by 0.8 percentage points to 64.1%, while operating profit margin remained stable at 25.7% [8][9] Brand Performance - The main brand Anta, along with FILA and other brands, showed revenue growth of mid-single digits, high-single digits, and 35-40% respectively [6][10] - Online sales increased by 25.1%, contributing to a total revenue growth of approximately 9% in offline channels [7][10] Strategic Initiatives - The company continues to focus on a "single focus, multi-brand, globalization" strategy, enhancing operational efficiency and retail capabilities [10][11] - Anta aims for a revenue growth target of 10-15% for the main brand in 2024, with FILA's target adjusted to high-single digits [11] Cash Flow and Financial Health - As of June 2024, the company reported a net cash position of CNY 32.4 billion, indicating strong liquidity and risk resilience [11] - Operating cash flow for the first half of 2024 was CNY 8.5 billion, a decrease of 16.4% year-on-year [9][11] Future Outlook - The report anticipates continued high-quality growth and plans for share buybacks of up to HKD 10 billion over the next 18 months, signaling confidence in future performance [11]