Event
The company released its operating performance report for the third quarter of 2022: the retail sales of 2022Q3 Anta, FILA and all other brands achieved positive growth of medium units, 10-20% and 40-45%, respectively, compared with the same period last year.
Brief comment
By brand:
1) Anta main brand: affected by the weak consumer environment, the Q3 flow growth rate improved month-on-month, but the improvement was less than expected. Q3 Anta brand pipeline is growing in the number of units compared with the same period last year, in which Anta large goods is growing in units, Anta children is growing in high units, and online channels are growing in high units. The discount rate is the same as the same period last year, the inventory-to-sales ratio is slightly more than 5 times, the month-on-month ratio is the same, and there is a slight increase over the same period last year (21Q3 is about 5 times). The current inventory-to-sales ratio is slightly higher than the ideal level. The company had previously directed 22H2 to target double-digit (high-single-digit) pipelining growth, while Q3 growth was lower than expected. It is expected that Q4 will still strive to achieve the flow target, and the discount intensity of Singles Day may be increased, which will drive the flow growth and improve the inventory level at the same time.
2) FILA: driven by the increase in discounts and the high increase in online channels, Q3 pipelining has achieved the expected growth rate and the inventory-to-sales ratio has increased. FILA pipelined Q3 achieved a positive growth of 10-20% compared with the same period last year, mainly due to the contribution of online growth, with an online growth of 65%. Offline, it is still significantly affected by the epidemic in Tier 1-2 cities. The online increase is mainly due to the company's increase in online discounts and the cooperation of new e-commerce channels such as Douyin and Xiaohongshu. Q3 has an overall discount rate of 74-25 per cent, down year-on-year and month-on-month (76-23 per cent for 21Q3 and 25 per cent for 22Q2). The decline in the discount rate is mainly due to the increase in Q3 online discounts, while offline full-price stores remain at 85-14% discount. The inventory-to-sales ratio of Q3 is 7-8 times, which is about 6 times that of Q2. FILA is expected to give priority to inventory in the fourth quarter, increase discounts on Singles Day, and target inventory to return to normal by the end of the year.
3) other brands: Di Sant maintains high growth, Kelon's performance is bright, and outdoor high scene demeanor is maintained. Q3 all other brands increased by 40% Mel 45% compared with the same period last year, of which Disante grew by about 35% and Kelon by about 55%, mainly due to the strong demand for outdoor sports such as camping and hiking.
Profit forecast: taking into account the weak consumer environment, slightly lowered the company's profit forecast, the company is expected to have revenue of 565.0 yuan, 655.4 yuan and 78.11 billion yuan in 2022-2024, an increase of 14.5%, 16.0% and 19.2% respectively (previous value: 568.5, 678.3, 80.68 billion yuan) The net profit of homing was 78.2,90.0 and 10.81 billion yuan respectively, an increase of 1.2%, 15.2% and 20.0% over the same period last year (previous values: 79.3,96.4 and 11.73 billion yuan). Corresponding to the latest Pmax E was 25.7x, 22.3x and 18.6x respectively, maintaining the "buy" rating.
Risk tips: COVID-19 repeated epidemic situation, consumption expectations decline, and so on.