2024-09-02 09:14Investment Rating - The report maintains a "Buy" rating for Anta Sports with a target price of HKD 118, based on a projected 25x PE for 2024 [3][5]. Core Insights - Anta Sports reported a strong performance in H1 2024, with revenue increasing by 13.8% year-on-year to HKD 33.7 billion and net profit attributable to shareholders (excluding JV impact) rising by 17.0% to HKD 6.16 billion. Including JV impact, net profit surged by 62.6% to HKD 7.72 billion, exceeding market expectations [2][3]. - The management announced a share buyback plan of up to HKD 10 billion over the next 18 months and declared an interim dividend of HKD 1.18 per share, reflecting confidence in the company's future and commitment to shareholder returns [2][3]. Summary by Sections Financial Performance - Anta's main brand revenue grew by 13.5% to HKD 16.08 billion, driven by double-digit growth in running categories and improved store efficiency. DTC, e-commerce, and wholesale revenues were HKD 8.937 billion, HKD 5.567 billion, and HKD 1.573 billion, respectively, with growth rates of 10.5%, 20.1%, and 8.5% [2]. - FILA's revenue increased by 6.8% to HKD 13.06 billion, with professional products showing double-digit growth. However, children's and trendy brands faced challenges. Gross margin improved by 1pp to 70.2% [2]. - Other brands, particularly in outdoor sports, saw a significant revenue increase of 41.8% to HKD 4.6 billion, with Descente and Kolon growing by 30% and over 50%, respectively [2]. Future Projections - The report forecasts EPS for 2024-2026 to be HKD 4.35, HKD 4.97, and HKD 5.53, respectively, with revenue growth rates projected at 11.0%, 12.8%, and 10.9% [3][8]. - The gross margin is expected to improve gradually, reaching 63.3% by 2026, while the net profit margin is projected to stabilize around 17.7% [9]. Market Position - As a leading player in China's sportswear industry, Anta is well-positioned to benefit from industry growth and consumer trends, particularly in the premium segment [3][8].