Investment Rating - The investment rating for Anta Sports is "Outperform the Market" (maintained) [1] Core Views - Anta Sports Group achieved double-digit revenue growth in the first half of the year, with healthy and controllable discount inventory levels [1][4] - In Q2 2025, Anta's main brand recorded low single-digit growth, while FILA achieved mid-single-digit growth, and other brands saw a remarkable 50-55% growth [2][4] - The management maintains its annual guidance for all brands despite the overall market pressure [4][5] Summary by Sections Retail Performance - In Q2 2025, Anta's overall revenue growth was double digits, with FILA and other brands performing well. The main brand's low single-digit growth was impacted by channel adjustments [3][5] - The online discount levels were influenced by the extended 618 promotional period, and inventory levels remained healthy [3][5] Brand Performance - Anta's main brand recorded low single-digit revenue growth in Q2 2025, with a sell-through ratio of five months at the end of the quarter. The running shoe series performed exceptionally well [6][9] - FILA's revenue growth was in the mid-single digits, with strong performance in golf and tennis categories [9][14] - Other brands, particularly KOLON, saw revenue growth exceeding 70%, while Descente grew over 40% [10] Financial Forecasts - The forecast for Anta's net profit for 2025-2027 is estimated at 134.8 billion, 154.6 billion, and 170.0 billion respectively, with comparable profit growth rates of 13.0%, 14.7%, and 10.0% [4][15] - The reasonable valuation range is maintained at 113-118 HKD, corresponding to a 2025 PE of 22-23X [4][15]

Core Insights - Anta Group held its third Innovation Awards ceremony in Xiamen, awarding over 1 million in total prizes, recognizing 21 innovative achievements across various categories [1] - The awards aim to enhance brand value and consumer perception through innovative products, technologies, and business models, laying a solid foundation for long-term growth [1] - Anta Group's commitment to innovation is reflected in its goal to become a global benchmark for innovation by 2030, as stated by the company's Executive Director and Co-CEO [2] Group 1: Innovation Awards - The Innovation Awards received nearly 300 submissions this year, with 21 projects recognized, including 8 in product innovation, 7 in technology innovation, and 6 in business model innovation [1] - The "PG7" running project won the gold award for product innovation, while the "Polyimide Technology" thermal material project and the "AI Simulation Engine" project won gold in technology innovation [1] - The awards have been held for three consecutive years, encouraging participation from all employees across various brands and departments within the group [1] Group 2: Innovation Initiatives - Anta Group launched the industry's first sports goods industry innovation accelerator, inviting startups to participate in strategic research and commercial applications of cutting-edge sports technology [3] - The innovation accelerator focuses on three key areas: advanced materials, digital intelligence, and logistics innovation, aiming to attract innovative resources and lead industry technological advancements [3] - A strategic partnership was established with Yushutech and Hong Kong Polytechnic University to research humanoid robots in sports science, enhancing the open innovation ecosystem in China's sports industry [3] Group 3: Future Investment in Innovation - Anta Group has invested a total of 20 billion in innovation over the past decade and plans to invest an additional 20 billion in the next five years for independent research and development [4] - The company holds the highest number of patent applications in the industry, with 5,830 patents, and is the first in the world to receive ISO56001 international innovation management system certification [4] - Anta Group has established a global open innovation ecosystem involving 7 design and R&D centers, over 70 universities and research institutions, and a significant number of experts and suppliers [4]

Investment Rating - The report maintains a BUY rating for Anta Sports, with a target price trimmed to HK$ 119.08, based on a 24x FY25E P/E ratio [1][3]. Core Insights - The acquisition of Jack Wolfskin is viewed positively, with the acquisition price considered attractive and significant potential for expansion in the mid-priced outdoor industry and European markets [1][11]. - Despite a slight decline in retail sales growth in March-April 2025, the outlook for Q2 2025 remains cautiously optimistic due to various growth drivers [11][12]. - The company's retail sales growth in Q1 2025 was satisfactory, with improvements in inventory management and a better-than-expected profit margin [10][11]. Financial Summary - Revenue projections for FY25E are set at RMB 78,235 million, with a year-on-year growth of 10.5% [2][12]. - Net profit for FY25E is estimated at RMB 14,961.4 million, reflecting a decrease of 12.7% year-on-year [2][12]. - The earnings per share (EPS) for FY25E is projected at RMB 4.66, down from RMB 5.34 in FY24A [2][12]. Market Performance - The current market capitalization of Anta Sports is approximately HK$ 226.67 billion, with a current stock price of HK$ 83.85, indicating a potential upside of 42% to the target price [3][4]. - The stock is trading at a P/E ratio of 17x for FY25E, which is considered attractive compared to its 5-year average of 25x [1][12]. Acquisition Details - Anta Sports announced the acquisition of Jack Wolfskin for USD 290 million (approximately RMB 23.5 billion), with expected sales of EUR 325 million and adjusted EBITDA of EUR 12 million for FY25E [11][18]. - The valuation metrics for the acquisition indicate a P/S ratio of approximately 0.8x, which is lower than both Anta's group average and the global sports industry average [11][18].

Investment Rating - The investment rating for Anta Sports is "Buy" and is maintained [6]. Core Views - Anta Sports is expected to achieve a revenue of 70.83 billion yuan in 2024, representing a year-on-year growth of 13.6%. The net profit attributable to shareholders is projected to be 15.6 billion yuan, a year-on-year increase of 52.4%. Excluding the gains from the Amer listing and placement, the net profit is expected to be 11.93 billion yuan, reflecting a 16.5% year-on-year growth. Overall, the revenue and performance are in line with expectations, although the operating profit margin (OPM) is slightly lower than anticipated after excluding government subsidies [2][4]. Summary by Sections Revenue and Profit Forecast - For 2024, Anta's revenue is forecasted at 70.83 billion yuan, with a growth rate of 14%. The net profit is expected to be 15.6 billion yuan, showing a significant increase of 52%. The earnings per share (EPS) is projected to be 5.56 yuan, with a price-to-earnings (P/E) ratio of 14.82 [9]. Brand Performance - In 2024, the revenue growth for Anta, FILA, and other brands is expected to be 10.6%, 6.1%, and 53.7%, respectively. The Anta brand is experiencing rapid growth, particularly in top-tier markets, while FILA is undergoing adjustments with a new CEO expected to drive high-quality growth [7]. Margin Analysis - The operating profit margins for Anta and FILA are projected to decline by 1.2 and 2.3 percentage points, respectively, due to increased e-commerce channel contributions and rising product development costs. The overall OPM is expected to be 21.0% for Anta and 25.3% for FILA, with government subsidies contributing positively to performance [7]. Future Outlook - Short-term challenges include pressure on OPM due to high marketing and promotion expenses. However, the long-term growth potential remains strong, particularly with the multi-channel store strategy and FILA's adjustments. The net profit forecasts for 2025-2027 are 13.4 billion, 15.0 billion, and 16.6 billion yuan, with respective year-on-year growth rates of 13%, 11%, and 11% [7][9].

Summary of Anta Sports Conference Call Company Overview - **Company**: Anta Sports - **Fiscal Year**: 2024 - **Sales Revenue**: 70.8 billion RMB, with a strong performance across brands [3][2] Key Financial Performance - **Anta Brand Contribution**: 33.5 billion RMB, 47.3% of total revenue, up 10.6% YoY [3][2] - **FILA Brand Contribution**: 26.6 billion RMB, 37.6% of total revenue, up 6.1% YoY [3][2] - **Other Brands Contribution**: 10.7 billion RMB, with growth exceeding 40% [3][2] - **Overall Gross Margin**: 62.2%, Net Margin: 23.4% [2][3] - **2025 Revenue Growth Projections**: High single-digit growth for Anta, mid-single-digit for FILA, and over 30% for other brands [2][3] Strategic Initiatives - **ESG Integration**: ESG is central to corporate strategy, focusing on energy transformation and operational efficiency [2][4] - **Multi-Brand Strategy**: Targets different consumer segments with value propositions, including zero-carbon stores and Design V3 product series [2][4] - **Retail Network Optimization**: Closing inefficient stores while opening high-efficiency ones to support revenue growth [15][16] Market Positioning and Competition - **Pricing Strategy**: Anta adopts a strategy of brand elevation with lower pricing to counter market competition [5][2] - **New Retail Formats**: Introduction of Champion Stores and Super Anta Stores aimed at enhancing brand influence, particularly in lower-tier markets [5][2] - **E-commerce Strategy**: Anta's e-commerce penetration is approximately 35%, with a balanced approach between online and offline sales [8][2] Brand-Specific Developments - **FILA Brand Leadership**: New CEO Jiang Yan to reassess brand positioning and product strategy, focusing on tennis and golf segments [10][2] - **Store Expansion Plans**: Anta aims to increase flagship stores to 190-200, while FILA will selectively open new stores [9][2][15] Supply Chain and Taxation - **Supply Chain Collaboration**: High autonomy for brands with shared services in procurement to enhance efficiency [13][2] - **Effective Tax Rate**: Expected to remain between 26%-27%, influenced by one-time non-cash items and project-specific tax rates [14][2] International Expansion - **Overseas Market Strategy**: Focus on Southeast Asia, Middle East, and North Africa for business expansion, with plans to enter the North American market through partnerships [18][21] - **Local Product Development**: Introduction of products tailored to local climates in overseas markets [19][21] Long-term Outlook - **Growth Potential**: Anta emphasizes long-term value creation, focusing on product quality and a multi-brand global strategy [22][23] - **Market Ceiling Concerns**: Anta does not set market ceilings but continuously redefines brand value propositions to meet consumer needs [24][2] - **Competitive Advantage**: Maintains a cautious yet optimistic outlook, leveraging product innovation and brand activities to enhance market presence [25][2]

Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - The company achieved a record revenue of over 70 billion RMB, focusing on a multi-brand strategy for stable long-term growth [5][7] - The company's revenue for 2024 reached 70.826 billion RMB, representing a year-on-year growth of 13.6%, with a gross profit of 44.032 billion RMB, up 12.8% year-on-year [7] - The net profit attributable to shareholders for 2024 was 15.596 billion RMB, a significant increase of 52.4% year-on-year [7] - The multi-brand strategy continues to support stable growth, with the main brand achieving a revenue of 33.52 billion RMB, up 10.6% year-on-year [7] - The online and overseas channels are expected to continue driving growth, with online revenue increasing by 21.8% year-on-year [7] Financial Forecasts - Revenue projections for the company are as follows: 62.661 billion RMB in 2023, 70.826 billion RMB in 2024, 78.945 billion RMB in 2025, 87.796 billion RMB in 2026, and 96.557 billion RMB in 2027 [6] - The net profit attributable to shareholders is forecasted to be 13.500 billion RMB in 2025, 15.561 billion RMB in 2026, and 17.150 billion RMB in 2027, with a year-on-year growth of -13.44%, 15.27%, and 10.21% respectively [6][7] - The company's return on equity (ROE) is projected to be 25.27% in 2024, decreasing to 17.93% in 2025, and further to 17.12% in 2026 [6]

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]

Financial Data and Key Metrics Changes - The total revenue of ANTA Sports Products exceeded JPY 100 billion for the first time, achieving a year-on-year growth of 13.6% [4] - Operating profit attributable to shareholders increased by 15% [4] - Free cash flow was reported at JPY 13.5 billion, indicating stable cash generation ability [4] - The final dividend for the year was JPY 123, up 20% year on year [5] Business Line Data and Key Metrics Changes - ANTA brand revenue reached JPY 60 billion, growing by 10.6% year on year [6] - FILA brand revenue was JPY 30 billion, up 6.1% year on year [6] - Other brands, particularly Dessence and Colin, saw significant growth of 53.7% year on year [6] - Online sales grew by 20%, while offline sales also achieved double-digit growth [7] Market Data and Key Metrics Changes - The overall gross profit margin was 62.2%, a slight decline of 0.4 percentage points [7] - FILA's gross profit margin decreased by 1.2 percentage points due to increased investment in merchandise [8] - The consumer market in China grew at a low rate of 3.5% in 2024, with a consumer confidence index of 86.2% [21][22] Company Strategy and Development Direction - The company aims to maintain its number one market share in China and expand its multi-brand strategy [3][50] - ANTA is focusing on brand breakthroughs and enhancing product quality, particularly in performance sports [27][51] - The company plans to replicate its successful strategies in China to international markets [51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a gradual rebound in the consumer market supported by government policies [22] - The global sports industry is expected to grow steadily, with opportunities in running, outdoor, and tennis categories [22] - The company is committed to low carbon innovation and sustainable practices to enhance brand influence [52] Other Important Information - The company has invested JPY 2 billion in R&D, representing a 20% increase [11] - ANTA's inventory turnover days are at a healthy level of 123 days, with a sellout rate of 87% [14][17] - The company has made significant strides in ESG performance, including a reduction in water consumption intensity by 2.5% [46][48] Q&A Session Summary Question: What are the key growth drivers for ANTA in 2025? - The company will focus on brand breakthroughs for ANTA and FILA, aiming for high-quality development in footwear and apparel [51] Question: How is ANTA addressing sustainability? - ANTA is committed to low carbon innovation and sustainable materials, with a goal of 50% sustainable products in the order book [48][52] Question: What is the outlook for the consumer market? - Management anticipates a gradual recovery in consumer confidence and spending, supported by government initiatives [22]