ANTA SPORTS(02020) 山西证券·2024-03-27 16:00Investment Rating - The report maintains a "Buy-A" rating for Anta Sports (02020 HK) [2] Core Views - Anta Sports' 2023 performance exceeded expectations with significant growth in revenue and net profit [2][3] - The company's offline channels outperformed e-commerce, with a 16 2% YoY increase in revenue to RMB 62 356 billion and a 34 9% YoY increase in net profit to RMB 10 236 billion [1][3] - All brands achieved improved operating profit margins, with FILA brand reaching a historical high of 27 6% [2][4] Revenue Breakdown - Anta brand revenue grew 9 3% YoY to RMB 30 306 billion, accounting for 48 6% of group revenue [1] - FILA brand revenue increased 16 6% YoY to RMB 25 103 billion, representing 40 3% of group revenue [4] - Other brands revenue surged 57 7% YoY to RMB 6 947 billion, contributing 11 1% to group revenue [5] Channel Performance - DTC channel revenue for Anta brand grew 24 2% YoY to RMB 17 005 billion, accounting for 56 1% of Anta brand revenue [1] - E-commerce revenue increased 11 0% YoY but its share of group revenue declined by 1 5 percentage points to 32 8% [1] - Traditional wholesale and other channels revenue decreased 22 7% YoY to RMB 3 370 billion [1] Profitability - Gross margin improved by 2 4 percentage points to 62 6% in 2023, driven by Anta's DTC transformation and FILA's retail discount improvement [5] - Operating cash flow surged 61 6% YoY to RMB 19 634 billion [5] - Inventory turnover days decreased by 15 days to 123 days, with inventory declining 15 1% YoY to RMB 7 210 billion [5] Store Expansion - Anta brand stores increased by 129 to 7,053, while Anta Kids stores grew by 99 to 2,778 by end of 2023 [1] - FILA brand stores decreased by 12 to 1,972, with plans to expand to 2,100-2,200 stores by end of 2024 [4] - Descente and Kolon Sport stores are expected to reach 220-230 and 180-190 respectively by end of 2024 [5] Future Outlook - Anta brand and FILA brand are expected to achieve 10%-15% retail sales growth in 2024 [6] - Descente brand is projected to grow retail sales by at least 20%, while Kolon Sport is expected to grow by at least 30% in 2024 [6] - The company anticipates recording a one-time gain of RMB 1 6 billion in H1 2024 due to Amer Sports' IPO [5]