2024-03-27 16:00Investment Rating - The report assigns a "Buy" rating to Anta Sports (2020 HK) with a target price of HKD 135.00, indicating a potential upside of 61.6% from the current closing price of HKD 83.55 [1][13]. Core Insights - Anta's 2023 net profit exceeded expectations, with a strong profit margin expansion. The sales and net profit for 2023 grew by 16.2% and 34.9% year-on-year, reaching RMB 62.356 billion and RMB 10.236 billion, respectively [1][5]. - The report highlights that the brand revamp of Anta is expected to drive future growth, with a focus on single-store sales growth and overseas expansion [1][5]. - The operating profit margin for Anta is projected to exceed 20% in 2024, with FILA and other brands maintaining margins around 25% [1][5]. Financial Performance Summary - 2023 Performance: Sales reached RMB 62.356 billion, with a net profit of RMB 10.236 billion, reflecting a 34.9% increase year-on-year. The gross profit margin improved by 2.4 percentage points to 62.6% [4][5]. - 2024 Projections: Revenue is expected to grow to RMB 71.151 billion, with a net profit forecast of RMB 13.571 billion, indicating a compound annual growth rate (CAGR) of 22% for earnings per share [4][14]. - Dividend Policy: The dividend payout ratio has increased to 50.7% in 2023, up from 44.3% in 2022, with expectations to maintain around 50% in the future [1][5]. Brand Performance - Anta Brand: Sales for the Anta brand grew by 9.3% in 2023, with a significant increase in single-store sales expected due to new product launches and store formats [1][5]. - FILA Brand: FILA's operating profit margin increased by 7.6 percentage points to 27.6% in 2023, driven by reduced discounts and effective marketing strategies [1][5]. - Other Brands: Other brands under Anta, including Descente and Kolon, are projected to see sales growth exceeding 20% and 30%, respectively, in 2024 [1][5]. Market Position and Strategy - Anta is focusing on brand revitalization and overseas expansion, with plans to establish research and development centers globally. The upcoming Paris Olympics is expected to enhance brand visibility [1][5]. - The report emphasizes the importance of localizing product designs to cater to different markets, particularly in regions like the Middle East [1][5].