In 2023, Anta Sports' revenue/net profit to mother increased 16.2%/35% year over year to 624/10.236 billion yuan. 2024Q1 Anta/Fila/other brand turnover increased by 25% to 30% of units/high units/ 25% to 30% year-on-year, and inventory was healthy. We judge that the steady performance of the company's brands and groups mainly comes from the company's excellent multi-brand collaborative management capabilities. The purpose of this report is to analyze the company's brands and group-level growth dynamics and emphasize the company's investment value.
Anta brand: Excellent performance in a volatile environment, looking forward to long-term sustainable growth. In 2023, Anta Sports' revenue/operating profit increased 9.3%/13.6% year-on-year to 303.06 billion yuan. Despite the high base for the same period, the Anta brand's Q1 turnover showed steady growth in the number of units, and inventory was in a healthy state. 2024Q1 We believe that the current Anta brand is entering a stage of high-quality growth. Through channel and product structure optimization, combined with efficient marketing, the improvement of brand value will be promoted, leading to a high-quality increase in brand revenue scale. The company expects the Anta brand turnover CAGR to be 10% to 15% from 2023 to 2026.
Fila: Product+channel optimization has achieved remarkable results and entered a stage of high-quality growth. In 2023, Fila's revenue/operating profit increased 16.6%/61% year over year to 251/6.92 billion yuan. In 2024Q1Fila's turnover increased by a high number of units, and the inventory sales ratio was between 4-5, and the performance was excellent. We judge that Fila has now moved from a stage of rapid growth to a stage of high-quality growth. In the subsequent development process, Fila will continue to adhere to the high-end brand positioning, adjust the product structure according to changes in consumer demand, improve the quality and efficiency of offline channels, and grow rapidly online business. The company expects Fila's flow CAGR of 10% to 15% from 2023 to 2026.
Other brands: High track quality+high brand operation efficiency, continuous growth in performance. In 2023, the revenue/operating profit of other brands increased 57.7%/108% year-on-year to 69.5/1.89 billion yuan. Since 2020, other brand segments have contributed profits. Since then, with the rapid expansion of the revenue scale of other brands and the maturity of brand operating models, operating profit margins have increased significantly. Benefiting from the high quality of the racetrack and the excellent multi-brand operation capabilities of Anta Group, Descente and Kolon are currently developing smoothly, and long-term store efficiency improvements drive growth.
Amer Sports: Successful listing in 2024, profit contribution is worth looking forward to. In 2023, Amer Sports' revenue increased 23% year-on-year to US$4.37 billion, and the company's net loss from continuing operations was US$210 million. After the joint venture was listed in 2024, the optimization of the capital structure will drastically reduce financial expenses, compounded by the continued improvement of the company's own operating performance, which is expected to help Anta Sports's positive performance in the long term.
The platform+division management structure is excellent, and the DTC model enhances operational efficiency. The company has established a platform+division management structure to enable multi-brand growth. At the same time, during the long-term operation process, the company's management team has an excellent enterprising spirit, accurate and efficient strategy formulation. Furthermore, benefiting from the advancement of Anta DTC's transformation, the company's overall direct business ratio continues to increase. On the one hand, it enhances the company's ability to gain insight into terminal consumption and operational efficiency, and on the other hand, accelerates the speed of response to the implementation of company decisions and enhances the company's overall operating efficiency.
Investment advice: We expect the company's net profit to be 136/139.9/16.16 billion yuan in 2024/2025/2026. The current stock price corresponds to 17 times the company's PE in 2024. If the one-time income of 1.6 billion yuan obtained by the company in 2024 is excluded, the corresponding PE in 2024 will be 19 times, maintaining a “buy” rating.
Risk warning: Store expansion and rectification efforts fell short of expectations, consumer environment recovery fell short of expectations, multi-brand operations and overseas business development were uncertain, and changes in the RMB exchange rate led to performance fluctuations.