Core views:
The company issued a 24Q1 operating announcement: Anta's main brand turnover increased the number of units, FILA's turnover increased by the same number of units, and all other brands increased by 20%-30%, in line with expectations.
Anta's main brand discounts and inventory sales ratios have all improved, and new strategies to maintain stability are worth looking forward to. According to the results, e-commerce channels have driven the steady growth of Anta's main brand, and e-commerce turnover also increased by 20%-25% in 24Q1. In addition, online discounts for the main brands in 24Q1 have improved, and the inventory ratio is below the health level of 5, which is an improvement over the previous month. We believe that measures such as Anta's main brand signing NBA basketball star Owen as the spokesperson for the basketball category, opening new channels such as SneakerVerse in high-tier cities, early Olympic marketing for 23H2, and refining store standards will help the value of the Anta brand continue to increase, and the effects of the new strategy to maintain stability and expand are worth looking forward to.
FILA e-commerce channel traffic has increased, discounts have improved significantly, and outdoor brands have performed well. According to the performance report, the 24Q1 FILA e-commerce channel increased by 25%-30% in the context of a high base during the same period, mainly through emerging channels such as Douyin. By brand, FILA products continued to optimize store displays, brands and product categories, etc., while at the same time, there was a net decline in children's clothing and trendy brands, resulting in FILA's big products outperforming children's clothing and trendy brands. The 24Q1 FILA online and offline discounts have all improved, and the inventory ratio is less than 5 healthy. Furthermore, Descente and Kolon's performance is still impressive. In 24Q1, Kolon's turnover increased by 50%. We believe that outdoor brands such as Descente, Kolon, and Amer's Archaeopteryx are expected to use the Group's efficient operating capabilities to further seize the boom opportunities in the outdoor market and achieve rapid development.
Profit forecasting and investment advice. The company's EPS is predicted to be 4.53/4.87/5.59 yuan/share in 24-26, excluding Amer's one-time profit and loss contribution in 24, giving the company 24 PE a 20 times valuation, corresponding to a reasonable value of HK$91.61 per share, and maintaining a “buy” rating.
Risk warning. The macroeconomic downturn, the FILA growth rate has clearly slowed, and Amer's overseas business profits have fallen short of expectations, etc.