The turnover of various brands grew steadily in 24Q1. In 24Q1, the year-on-year growth rates of the Anta brand/Fila/other brands were medium units/high units/ 25%-30%, respectively. Under the high base for the same period of 2 consecutive years (23Q1: year-on-year growth, respectively, 75%-80%; 22Q1:10-20% year-on-year growth, medium units/ 40%-45%, respectively), each sector still had steady growth momentum.
Enhance the brand's global influence with the help of soccer star co-names. At the beginning of March, Anta and Owen's first signature sneaker “Anta Owen Generation” debuted in China and the US. Owen personally participated in the conceptual creativity and style design, giving it strong personal characteristics. The response from the terminal was enthusiastic, and we judged that the sell-out rate was high. Since then, new color schemes such as “SV”, “Home”, and “Away” have been released one after another, as well as new Owen series clothing, and the product line continues to be enriched. We believe that, combined with the Olympic sports boom, this round of high-profile co-branding is expected to significantly increase brand attention. Its successful overseas sales also mark the official launch of Anta's global strategy, which will help increase its global influence.
Innovate retail models to increase the stickiness of the younger customer base. On March 23, “ANTASNEAKERVERSE”, the first white label store of Anta's portfolio, opened in Sanlitun, Beijing, starting Anta's new retail model. It mainly sells high-quality sneakers, and will launch exclusive models. Compared with regular stores, the style is more focused and youthful, and has been very popular since opening. We believe that this new retail format will further enhance brand tone, help establish better interaction between Anta sneakers and sneaker enthusiasts, and promote customer base stickiness.
Profit forecasting and valuation. We believe that as a leading multi-brand sporting goods group, Anta's competitive barriers are mainly due to ① scarce high-quality multi-brand assets, occupying multiple tracks with high growth potential, and ② a mature and strong operating system to build resilience to economic cycles. We continue to be optimistic about the growth potential of many brands. We expect the company's 2024/2025 net profit to be 133.82/13.548 billion yuan, giving the 2024 PE valuation range 20-23X, corresponding to a reasonable value range of HK$102.70-118.11 per share according to the exchange rate of HK$1 = $0.92, maintaining a “superior to the market” rating.
Risk warning. The retail environment is weak, new brand acquisitions and integration are falling short of expectations, the store expansion process is slowing down, etc.