Changjiang Securities·2024-04-02 16:00Investment Rating - The investment rating for Anta Sports (2020.HK) is "Buy" and is maintained [5]. Core Insights - In 2023, Anta Sports achieved revenue of 62.4 billion yuan, a year-on-year increase of 16%, and a net profit attributable to shareholders of 10.2 billion yuan, up 34.9% year-on-year, exceeding expectations [5][6]. - The strong performance is attributed to a significant increase in interest income, which reached 1.47 billion yuan, up 8.6 billion yuan year-on-year, driven by improved cash flow and higher bank deposit rates [5][6]. - The company expects continued growth in 2024, supported by the Olympic catalyst for the Anta brand and the strengthening of the FILA brand [6]. Summary by Sections Financial Performance - In 2023, Anta Sports reported revenue of 62.4 billion yuan, a 16% increase year-on-year, and a net profit of 10.2 billion yuan, reflecting a 34.9% increase [5][6]. - The company’s cash deposits increased to 48.5 billion yuan in 2023 from 27.7 billion yuan in 2022, contributing to improved financial performance [5]. Brand Performance - The Anta brand's revenue grew by 9% year-on-year, with direct-to-consumer (DTC) sales accounting for 56% of total revenue, reaching 17 billion yuan [5]. - FILA's revenue increased by 17%, with operating profit margin (OPM) improving by 7.6 percentage points to 27.6% due to enhanced store efficiency [5][6]. - Descente and KOLON saw revenue growth of 58% to 6.9 billion yuan, with OPM increasing by 6.5 percentage points to 27.1% [5]. Inventory and Efficiency - All brands achieved double-digit growth in store efficiency, with Anta brand store efficiency reaching 280,000 to 290,000 yuan, and FILA nearing 1 million yuan [5][6]. - Inventory management improved, with total inventory reported at 7.2 billion yuan, down 15% year-on-year, and inventory turnover days reduced by 15 days to 123 days [5]. Future Outlook - The company anticipates a positive contribution from its joint ventures in 2024, despite a loss reported in 2023 due to a one-time impairment [6]. - Projections for net profit attributable to shareholders are 13.4 billion yuan in 2024, 13.7 billion yuan in 2025, and 15.4 billion yuan in 2026, with corresponding P/E ratios of 16, 16, and 14 times [6].