Core Viewpoint - Anta Group, in collaboration with Donghua University, has launched Aerovent Zero, China's first self-developed high-performance fluorine-free waterproof and breathable material, marking a significant breakthrough in the field of high-performance waterproof and breathable fabrics in China [1][3]. Group 1: Product Innovation - The Aerovent Zero material significantly enhances moisture permeability through self-developed high-conductivity bio-based polymers and micro-nano structural adjustments, while ensuring waterproofing without adding organic fluorine compounds [3][5]. - Third-party testing has confirmed that the material meets international advanced standards, achieving a static water pressure of 18,000 mmH₂O and a moisture permeability rate of 7,000 g/m²·24h, thus overcoming the global challenge of "fluorine-free high performance" [5]. - The material incorporates 20% bio-based content, making it more environmentally friendly compared to international brands' fluorine-free solutions [5]. Group 2: Market Strategy and Pricing - Anta Group has managed to control the product price at one-third of similar international fabric products, making high-performance waterproof and breathable fabric technology accessible [5]. - The new generation of "Storm Armor" featuring Aerovent Zero is set to launch in the fall and winter of this year, with an estimated price around 1,000 yuan and projected sales exceeding 500,000 units by 2026 [5]. Group 3: Research and Development Commitment - Anta Group has established a global open innovation ecosystem involving seven design and research centers, over 70 universities and research institutions, and more than 800 suppliers [7]. - The company has invested 20 billion yuan in innovation-related activities over the past decade and plans to invest another 20 billion yuan in the next five years to enhance consumer experience [7]. Group 4: Sustainability Goals - Anta Group aims to increase the proportion of sustainable products to 50% and achieve 50% usage of sustainable raw materials by 2030 [7]. - The company has improved its MSCI ESG rating to "A" within two years and ranks in the top 6% among 190 global textile, apparel, and luxury goods companies in the S&P Global Corporate Sustainability Assessment [7].

Core Viewpoint - The article highlights the significant breakthrough in the high-performance waterproof and breathable materials sector with the launch of the fluorine-free Anta membrane, marking a pivotal moment for China's sustainable material innovation [1][10]. Group 1: Product Innovation - Anta, in collaboration with Donghua University, has developed the fluorine-free Anta membrane, which is the first domestically produced high-performance waterproof and breathable material in China [1]. - The Anta membrane utilizes self-researched high moisture-permeable biopolymers and micro-nano structural adjustments, significantly enhancing moisture permeability while ensuring waterproofing through innovative surface modifications and adhesives [7][8]. - The membrane has achieved international advanced levels in key performance indicators, with a static water pressure of 18,000 mmH₂O and a moisture permeability rate of 7,000 g/m²•24h, as verified by third-party laboratories [7]. Group 2: Sustainable Development - The Anta membrane incorporates biobased polymers, with a biobased content of 20%, replacing petroleum-based polymers, aligning with future sustainability trends [8]. - Anta aims to increase the proportion of sustainable products to 50% and use 50% sustainable raw materials by 2030, marking a significant step in its sustainable development strategy [10]. Group 3: Market Impact and Strategy - The successful transition from laboratory to market for the Anta membrane involved extensive testing and optimization, achieving high standards in product performance and yield rates [9]. - The pricing of the Anta membrane is set at one-third of similar international materials, facilitating broader access to high-performance waterproof and breathable technology [9]. - The new generation of "Storm Armor" featuring the Anta membrane is expected to launch in overseas markets, with projected sales exceeding 500,000 units by 2026, positioning it as a landmark product in the high-performance fluorine-free jacket market [10].

Core Viewpoint - Anta's story is entering a new phase as it aims to overcome growth bottlenecks and refocus on its main brand after significant external brand acquisitions [2][4][10]. Group 1: Financial Performance - In 2024, Anta's revenue reached a new high, growing by 13.5% to 70.826 billion yuan, with total revenue exceeding 100 billion yuan when including the off-balance-sheet brand Amer Sports [2]. - Anta's net profit increased by 52.36% year-on-year to 15.596 billion yuan, driven by a one-time equity income from capital operations [16]. - FILA, a key brand under Anta, saw its revenue growth slow down, with only a 6.1% increase for the year, which is below expectations [20]. Group 2: Brand and Market Dynamics - Anta and FILA, with a combined scale exceeding 26 billion yuan, are approaching growth bottlenecks, while competition in the sports apparel market intensifies [4][6]. - The main brand, Anta, is expected to regain focus as the company aims to surpass Nike in China within three years [7][8]. - The market is witnessing a shift towards mid-range consumer segments, with competitors like 361 Degrees gaining traction by offering lower-priced products [24][25]. Group 3: Strategic Adjustments - Anta's CEO, Xu Yang, emphasizes the need for a marketing-focused approach to revitalize the main brand, which has a broad market positioning [34]. - The company plans to reduce the number of less efficient stores by 135-235 by 2025, focusing on high-performing store formats like "Anta Champion" and "Super Anta" [38][39]. - Anta's e-commerce business is projected to grow by 20.7% in 2024, although this shift may pressure overall profit margins due to higher online discounting [42][43]. Group 4: Future Outlook - Anta aims for high single-digit growth for its main brand and mid-single-digit growth for FILA in 2025, while maintaining over 30% growth for brands like Descente and Kolon [54]. - The company is investing significantly in overseas markets, targeting a 15% share of international sales within five years [49].

Core Viewpoint - Anta Sports has reached a new scale high in 2024, with revenue growing by 13.5% to 70.826 billion yuan, and total revenue exceeding 100 billion yuan when including its subsidiary Amer Sports [1][2]. Group 1: Company Performance - Anta's revenue growth is primarily driven by its main brand and FILA, which together account for nearly 85% of its basic income [12]. - FILA's revenue growth has slowed, with a mere 6.1% increase for the year, falling short of expectations [13]. - Anta's net profit increased by 52.36% to 15.596 billion yuan, aided by one-time equity income from capital operations [10]. Group 2: Market Challenges - Anta and FILA are approaching growth bottlenecks, facing intensified competition in the mid-to-high-end market and a slowdown in the trendy market [14]. - The brand FILA is experiencing challenges due to saturation in the children's market and insufficient differentiation in its product lines [14]. - Competitors like 361 Degrees have gained market share, with 361 Degrees' revenue surpassing 10 billion yuan for the first time, growing by 19.6% [14]. Group 3: Strategic Focus - Anta's CEO Xu Yang has emphasized a return to focusing on the main brand, aiming to surpass Nike in China within three years [3][4]. - The company plans to restructure its brand strategy by differentiating its store formats and targeting various market segments [21]. - Anta aims to reduce the number of underperforming stores by 135-235 by 2025, focusing on "Anta Champion" and "Super Anta" stores [23][24]. Group 4: Future Outlook - Anta is targeting high single-digit growth for its main brand and mid-single-digit growth for FILA by 2025, while maintaining over 30% growth for Descente and KOLON [31]. - The company is investing heavily in overseas markets, aiming for international sales to account for 15% of total sales within five years [29]. - Anta's e-commerce business is expected to grow by 20.7%, although this shift may pressure overall profit margins [25].

Investment Rating - The report maintains an "Outperform" rating for Anta Sports [3][40]. Core Views - Anta Sports is expected to achieve a core net profit growth of 16.5% in 2024, with a revenue increase of 13.6% to 70.83 billion RMB, excluding non-cash profits from Amer Sports [1][7]. - The company is optimistic about the growth potential in the Chinese sports consumption market, with management projecting high single-digit growth for the Anta brand and over 30% growth for other brands in 2025 [2][39]. Financial Performance Summary - **Revenue and Profit**: In 2024, Anta's revenue is projected to reach 70.83 billion RMB, with a core net profit of 11.93 billion RMB, reflecting a 16.5% increase [1][4]. - **Brand Performance**: Revenue from Anta, FILA, and other brands is expected to be 33.5 billion RMB, 26.6 billion RMB, and 10.7 billion RMB respectively, with growth rates of 10.6%, 6.1%, and 53.7% [2][7]. - **Profit Margins**: The overall gross margin is projected to be 62.2%, with a decline of 0.4 percentage points from the previous year, while the operating profit margin is expected to decrease by 1.2 percentage points to 23.4% [8][29]. Brand-Specific Insights - **Anta Brand**: Revenue is expected to grow by 10.6% to 33.5 billion RMB, with a focus on e-commerce and new retail formats [18][19]. - **FILA Brand**: Revenue growth of 6.1% is anticipated, driven by professional sports series and e-commerce channels, despite a decline in profit margins [22][23]. - **Other Brands**: Significant growth of 53.7% is expected, with Descente and Kolon achieving strong performance [24][26]. Cash Flow and Dividend Policy - The company maintains a robust cash flow with a net cash position of 31.4 billion RMB and a dividend payout ratio of 51.4% [15][39]. - Operating cash inflow is projected at approximately 16.74 billion RMB, indicating a healthy net cash ratio [15][39]. Future Outlook - The report projects net profits for 2025-2027 to be 13.48 billion RMB, 15.46 billion RMB, and 17 billion RMB respectively, with a corresponding growth rate of 13.0%, 14.7%, and 10.0% [3][39]. - The reasonable valuation is adjusted to 113-118 HKD, reflecting an increase from the previous estimate of 103-112 HKD [3][39].

Investment Rating - The investment rating for the company is "Outperform the Market" [3][40]. Core Insights - The company is expected to achieve a core net profit growth of 16.5% in 2024, with a revenue increase of 13.6% to 70.83 billion RMB. The net profit attributable to shareholders is projected to grow to 11.93 billion RMB, excluding non-cash gains from Amer Sports [1][7]. - The company maintains a high dividend payout ratio of 51.4% and has repurchased approximately 1.28 billion HKD worth of shares during the year [1][15]. - The management remains optimistic about the growth prospects of the sports consumption market in China, with expectations for significant growth across its brand portfolio [2][39]. Financial Performance Summary - **Revenue and Profit Growth**: The company reported a revenue of 70.83 billion RMB in 2024, reflecting a 13.6% year-on-year increase. The core net profit is expected to reach 11.93 billion RMB, marking a 16.5% increase [1][7]. - **Brand Performance**: Revenue from the Anta brand reached 33.52 billion RMB, up 10.6%, while FILA's revenue grew by 6.1% to 26.63 billion RMB. Other brands saw a significant increase of 53.7% to 10.68 billion RMB [2][24]. - **Profit Margins**: The overall gross margin for 2024 is projected at 62.2%, a slight decrease from 62.6% in 2023. The operating profit margin is expected to be 23.4%, down from 24.6% [8][29]. Brand and Market Strategy - **Anta Brand**: The Anta brand is focusing on new retail formats and has launched successful products like the PG7 running shoes. The brand's revenue from e-commerce channels grew by 20.7% [2][19]. - **FILA Brand**: FILA's revenue growth is driven by its professional sports series and footwear. The brand aims to enhance its product functionality and quality while expanding its retail presence [22][23]. - **Other Brands**: Brands like Descente and KOLON have shown strong growth, with Descente's revenue increasing by over 35% and KOLON by more than 60% [24][26]. Future Outlook - The company has adjusted its profit forecasts for 2025-2027, expecting net profits of 13.48 billion RMB, 15.46 billion RMB, and 17 billion RMB respectively, reflecting a growth rate of 13.0%, 14.7%, and 10.0% [3][39]. - The target price has been revised to 113-118 HKD, based on the updated profit forecasts, corresponding to a PE ratio of 22-23x for 2025 [3][40].

Investment Rating - The investment rating for the company is "Buy" (maintained) [6] Core Views - The company reported strong performance for 2024, with revenue of 70.8 billion, a year-on-year increase of 13.6%, and net profit attributable to shareholders of 15.6 billion, up 52.4% [1] - The main brand, Anta, achieved a high single-digit growth in revenue, with reported income of 33.5 billion, a year-on-year increase of 10.6% [2] - FILA brand showed healthy growth with reported income of 26.6 billion, a year-on-year increase of 6.1% [3] - Other brands experienced significant growth, with revenue increasing by 53.7% to 10.7 billion [4] - Amer Sports reported a revenue of 5.18 billion USD, a year-on-year increase of 18%, with the Greater China region leading growth at 54% [5] - The company expects revenue growth of 10% in 2025, 8% in 2026, and 7% in 2027, with net profit projected to be 13.4 billion, 14.7 billion, and 16.1 billion respectively [6] Summary by Sections Financial Performance - For 2024, the company achieved a revenue of 70.8 billion, with a net profit of 15.6 billion, reflecting a strong performance [1] - The cash dividend payout ratio was 51.4%, maintaining a normal level [1] Brand Performance - Anta brand revenue reached 33.5 billion, with DTC and e-commerce growing by 7.2% and 20.7% respectively [2] - FILA brand revenue was 26.6 billion, with a focus on enhancing product functionality and quality [3] - Other brands saw a revenue increase of 53.7%, with a notable performance from Descente and Kolon [4] Future Outlook - The company plans to continue focusing on product innovation and expanding its global brand presence [2][3] - The leadership change in FILA is expected to drive further brand innovation and growth [3] - The company maintains a positive outlook on revenue growth and profitability for the coming years [6]