ANTA SPORTS(02020)2025-01-09 07:53Investment Rating - The report maintains a "Buy" rating for Anta Sports [1]. Core Views - Anta's 4Q24 performance exceeded market expectations, with significant improvement in Fila's sales, alleviating concerns about its growth slowdown. This is expected to stimulate a short-term rebound in stock price [1]. - The company's 2024 performance is largely determined, aligning with previous forecasts, and despite challenges in 2025, Anta is expected to achieve higher sales growth than peers through continuous store upgrades and product adjustments [1][2]. - The report highlights the potential for acquisitions in 2025, which could further enhance growth amid uncertain market demand [2]. Financial Performance Summary - Anta's 4Q24 total revenue increased by a high single-digit percentage year-on-year, with Fila's revenue also showing a significant recovery compared to 3Q24 [10]. - The forecast for 2024 anticipates a 12% year-on-year revenue growth, with Anta brand revenue expected to grow nearly 10% and Fila brand revenue projected to increase by 6% [10]. - The report predicts a core net profit of RMB 11.886 billion for 2024, reflecting a 16.1% year-on-year increase [12][15]. - The target price for Anta is set at HKD 93.0, indicating a potential upside of 23.5% from the current price of HKD 75.3 [4][5]. Brand Performance Insights - Fila's 4Q24 revenue growth was significantly better than the previous quarter, with a year-on-year increase in the high single digits [10]. - Descente and Kolon are expected to maintain high growth rates in 2025, contributing to overall group profitability [2]. - The report notes that Anta's online discount levels improved slightly, while offline discounts remained stable, indicating effective inventory management [10]. Market Position and Strategy - Anta is recognized as one of the best-performing domestic brands in the Chinese sportswear market, attributed to management's proactive store renovations and expansion into emerging e-commerce channels [2]. - The report emphasizes the importance of maintaining a stable inventory turnover ratio and discount levels to support profitability [10]. Financial Projections - Revenue projections for 2024 are set at RMB 69.627 billion, with a gross profit margin expected to remain stable at around 62.6% [12][21]. - The report outlines a gradual increase in net profit and earnings per share over the next few years, with a projected core net profit of RMB 14.240 billion in 2025 [12][15].