2024-03-27 16:00Investment Rating - The report maintains a "Buy" rating for Anta Sports (2020.HK) with a target price of HKD 101, representing a potential upside of 20.9% from the current price of HKD 83.6 [3][15]. Core Views - Anta's brand strength, operational capabilities, and fundamentals have shown consistent improvement, outperforming peers, which is expected to drive high-quality growth in 2024 [3][4]. - The management aims for a long-term compound annual growth rate (CAGR) of 10%-15% for Anta and Fila's revenue from 2023 to 2026, aligning 2024's revenue growth targets with this long-term goal [4][9]. - The report emphasizes the importance of operational quality improvements over mere financial performance, highlighting significant reductions in inventory and improved operational efficiency [4][9]. Financial Performance Summary - Anta's revenue for FY23 reached RMB 62.36 billion, a year-on-year increase of 16.2%, while net profit grew by 34.8% to RMB 10.23 billion, exceeding market expectations [9][11]. - The gross profit margin improved to 62.6% in FY23, up from 60.2% in FY22, driven by enhanced profitability in the second half of the year [9][11]. - The report forecasts revenue for 2024 to be RMB 70.49 billion, with a projected net profit of RMB 12.73 billion, reflecting a year-on-year growth of 13% and 24.4% respectively [8][12]. Operational Insights - Anta's inventory turnover days decreased by 15 days to 123 days, indicating improved inventory management despite a shift towards direct-to-consumer (DTC) sales [4][9]. - The company has maintained a healthy channel inventory level, with a stock-to-sales ratio of 4-5 times, supporting operational efficiency [4][9]. - The report notes that the launch of new products, such as the Owen basketball shoes, and the ongoing optimization of store formats are expected to enhance brand positioning and consumer engagement [4][9].