Matters:
The company issued an operating announcement for the first quarter of 2024: Compared with 2023Q1, the retail value of the 2024Q1 Anta brand achieved a positive year-on-year increase in the number of units; the FILA brand achieved a positive year-on-year increase in the number of units; all other brands (excluding brands newly added to the group after January 1, 2023) achieved a positive year-on-year increase of 25%-30%.
Ping An's point of view:
Anta brand: steady growth in turnover and healthy inventory performance. 1) Judging from the sales performance, the Anta brand achieved a positive year-on-year increase in the number of units in 24Q1. 2) Judging from the inventory performance, the Anta brand's 24Q1 inventory turnover is less than 5 months and is at a healthy level.
FILA brand: Continued high-quality growth. 1) Judging from the turnover performance, the FILA brand achieved a high year-on-year positive unit volume growth in 24Q1. 2) Judging from the inventory performance, the FILA brand 24Q1 inventory turnover is about 5 months, which is at a reasonable level.
Other brands: High double-digit turnover growth. Other brands achieved +25%-30% year-on-year growth in 24Q1; among them, on the basis of a high base for the same period last year, the two brands Descente and Kolon still achieved the same high double-digit growth in the first quarter of this year.
Outlook: 1) For the Anta brand, we expect revenue growth of 10-20% year-on-year in 2024, and we are particularly optimistic about the development potential of Anta children; 2) FILA brand, we expect revenue growth of 10-20% year-on-year in 2024, and we are optimistic about the single-store performance of FILA's offline direct sales channels; 3) Other brands, especially Descente and Colon, will continue to grow rapidly, supporting the company's overall profit. 4) Amer Sports will bring positive profit contributions to the company in 2024.
Continue to be optimistic about the company's three growth curves of professional sports, fashion sports and outdoor sports, superimpose the dividends of the sports and outdoor sports industry, and maintain a “highly recommended” rating. We are optimistic about the company's performance as a leading sneaker and apparel company in the Olympic year and maintain the profit forecast for 2024-2026. The company's net profit to mother was RMB 12.08 billion, RMB 14.18 billion, and RMB 16.56 billion. The current stock price is 17.8 times PE in 2024, maintaining the “Highly Recommended” rating.
Risk warning: 1) Brand promotion falls short of expectations: Fashion consumption trends are difficult to determine. If clothing brand companies fail to grasp fashion trends in a timely manner, it may lead to a decrease in consumer stickiness with the brand, which in turn causes loss of customer flow and a decline in performance. The company currently has a large number of new outdoor sports brands. If the new brand fails to meet domestic market demand and sales fall short of expectations, it will adversely affect the company's performance. 2) Channel inventory backlog risk: If the product turnover rate is poor in the current season, it may cause a backlog of terminal channel inventory and bring certain operating risks to the company's virtuous cycle and development, which in turn affects the company's performance stability. 3) Insufficient demand elasticity: If global and Chinese economic recovery is weak and consumption is sluggish in the future, or international trade friction increases, light industry and clothing exports may be greatly affected, further affecting the prosperity of the light industry and garment industry and the profit level of related companies.