2024-04-22 08:32Investment Rating - The report maintains a "Buy" rating for Anta Sports with a target price of HKD 120, based on a 26x PE for 2024 [1][4]. Core Insights - Anta's main brand achieved a mid-single-digit growth year-on-year in Q1 2024, meeting company expectations, while FILA recorded a high single-digit growth [2][3]. - Other brands experienced a significant growth of 25-30%, driven by the ongoing demand for outdoor sports [2]. - The company maintains confidence in achieving its annual growth targets despite slight discrepancies in Q1 performance compared to full-year expectations [2]. Summary by Sections Main Brand Performance - In Q1 2024, Anta's main brand achieved a mid-single-digit growth year-on-year, with a target completion rate of 100% in the first two months and 120% in the latter half of March [2]. - Inventory levels are healthy, with a sell-through ratio below 5, and discounts maintained within the target range of 75-80% [2]. FILA Brand Performance - FILA recorded a high single-digit growth in Q1 2024, with core products outperforming kids and fusion lines due to optimized product mix and improved store layouts [2]. - Online sales grew approximately 25% year-on-year, and inventory levels improved with a sell-through ratio below 5 [2]. Other Brands Performance - Other brands benefited from a surge in outdoor sports demand, achieving a 25-30% growth in Q1 2024, with Kolon growing over 50% [2]. - Inventory levels reached optimal conditions, indicating strong operational performance across the brand portfolio [2]. Financial Projections - The report forecasts EPS for 2024, 2025, and 2026 to be RMB 4.26, 4.88, and 5.46 respectively, with revenue growth rates projected at 11.5%, 12.7%, and 10.8% [3][7]. - The gross margin is expected to improve from 60.2% in 2022 to 63.3% by 2026, reflecting enhanced operational efficiency [8]. Market Position - As a leading player in the Chinese sportswear industry, Anta is well-positioned to benefit from industry growth and the upcoming Paris Olympics [2][3].