ZHONGTAI SECURITIES·2024-04-24 02:02Investment Rating - The report initiates coverage with a "Buy" rating for Amer Sports, highlighting its future growth potential [4]. Core Insights - Amer Sports is positioned as a leading global multi-brand operator in the sports and outdoor sector, with a strong portfolio including brands like Arc'teryx, Salomon, and Wilson. The company has shown significant revenue growth, with a 23% year-on-year increase in 2023, reaching $4.4 billion [2][4]. - The report emphasizes the company's robust channel and product operation capabilities, particularly under the Direct-to-Consumer (DTC) model, which has led to improved profitability and revenue growth [4][23]. - Amer Sports is expected to leverage Anta's distribution advantages to accelerate its penetration into the Chinese market, where outdoor sports apparel is experiencing rapid growth [3][4]. Summary by Sections Company Overview - Amer Sports operates multiple well-known brands across various sports categories, including professional sports, outdoor activities, and ball sports. The company has expanded its brand matrix through acquisitions and is now a leading player in the global market [2][6]. Industry Context - The outdoor sports apparel market in China is growing rapidly, with a CAGR of approximately 20% over the past three years. Amer Sports has been increasing its presence in this market since its acquisition by Anta in 2019, with significant growth in the Greater China region [3][4]. Financial Performance - In 2023, Amer Sports reported revenues of $4.368 billion, a 23.1% increase year-on-year, and an adjusted EBITDA of $611 million, reflecting a 34.8% growth from the previous year. The company has improved its net loss position, narrowing it by 17.6% compared to 2022 [9][10]. - The report forecasts revenue growth for 2024-2026, with expected revenues of $70.9 billion, $79.6 billion, and $88.4 billion, respectively, indicating a positive growth trajectory [4][11]. Growth Drivers - The company is expected to achieve double-digit revenue growth in 2024, driven by strong brand positioning, product innovation, and effective channel strategies. The anticipated earnings per share for 2024 is projected to be between $0.30 and $0.40 [20][21]. - Amer Sports is focusing on enhancing its operational efficiency and profitability through strategic initiatives, including optimizing its debt structure following its IPO [10][11]. Market Positioning - Amer Sports has a diversified product portfolio and a strong brand presence across various regions, with 40% of its revenue coming from the Americas and 33% from Europe, the Middle East, and Africa [2][18]. - The company is committed to innovation and sustainability, continuously investing in research and development to meet evolving consumer demands [15][17].