Company discloses 24Q1 retail performance
The retail value of the Anta brand (online+offline, same below) increased orders year over year, Fila brand increased high orders year over year, and all other brands increased 25-30% year over year.
Anta focuses on “public positioning, professional breakthroughs, and brand improvement” to further transform brands and products. Recently, Anta and Toray China Fabric Innovation Center (TSD, PTHL) have cooperated in joint research and development. In recent years, many of the world's top partners have joined Anta's global open innovation ecosystem platform. Focusing on the research and development of new materials for sports footwear, fabric technology development, and intelligent manufacturing technology, they have achieved joint innovation results represented by “Anta Film”, a high-performance waterproof and breathable material, and “soft yarn” introducing Academician Xu Weilin's scientific research results “embedded in spinning” technology, redefining industry standards and consumer experience, and completing market transformation.
Anta strives to create a differentiated channel matrix, divide stores into levels, and match different store types and product matrices to meet the needs of different regions and diverse consumers. As of December 31, 2023, under the DTC model, out of a total of about 5,400 Anta stores, about 44% are directly managed by Anta, and the remaining 56% are operated by franchisees according to the company's operating standards; out of a total of about 2,200 Anta children's stores, about 64% are directly managed by Anta; in the future, channel optimization and upgrading will be used to match different business districts using differentiated store images, doubling the focus on improving DTC store efficiency, product efficiency and profitability.
FILA adheres to “top products, top brands, and top channels”. The high-end sports positioning is compatible with “Athflow style,” “outdoor style,” “functional style,” and “business and leisure”. In terms of channel layout, FILA continues to adjust existing stores, upgrade the image of stores and space, expand the high-end business district, and interact with consumers in different scenarios. The FILA brand continues to penetrate high-growth live streaming and social networking platforms, driving the brand's online business to achieve significant breakthroughs and record high growth.
FILA continues to invest in upgrading the design and comfort of its products to bring consumers popular products with a sense of familiarity and freshness. In terms of product layout, FILA actively expands product categories and innovates fashion styles, and launches products such as sneakers, canvas shoes, and bread shoes.
Maintain profit forecasts and maintain “buy” ratings
The Group adopts a “multi-brand” strategy to target customers at different levels, continuously enrich product selection and promote store channel differentiation, meet a wide range of customer needs, and strive to expand the Group's overall market share.
The Group's three major brand groups include a professional sports brand group centered on Anta, a fashion sports brand group centered on FILA, and an outdoor sports brand group composed of DESCENTE and KOLON SPORT. We expect revenue for 2024-26 to be 708/795/87.8 billion yuan, net profit to mother to 132/135/156 billion yuan, EPS 4.7/4.8/5.5 yuan/share, respectively, and corresponding PE 17/16/14x, respectively.
Risk warning: Macroeconomic growth falls short of expectations, rising labor costs and operating expenses, falling short of expectations in terminal store expansion, falling short of expectations, offline recovery falling short of expectations, intensifying competition in the sports brand industry, etc.