Anta Sports Announces Performance And Next Year'S Trend &Nbsp; Calls For Buying

On September 14th, although Anta's gross profit margin fell 4.28% in the first half of the year, its performance was still in line with the expectations of the public, and its revenue growth was strong, mainly due to the increase in the average price by more than 10% and the three quarter order will be shipped in June. In addition, Anta The same quarter sales growth, and the growth of orders in the first quarter of next year, there are signs of slowing down, I believe. market The next few quarters will focus on the same store sales growth and orders.

Although the medium-term performance is better than expected, the order growth in the first quarter of next year will be lower than we expected. Based on the increase in the risk of industry and order growth, plus the effective tax rate increase in the next two fiscal years, the expected profit margins will be reduced. We have correspondingly lowered the 5.6% and 7.9% 2012/13 earnings in the corresponding period. However, the overall performance of the group continued to be ideal. We continued to maintain its "buy" investment rating with a target price of 12.59 yuan.

A key:

Performance summary: net profit growth of 22% to 927 million yuan in the first half of the year. The overall performance is in line with our expectations, with a strong growth in revenue of 28.9%. This is mainly due to the increase in the average price by over 10% and the three quarter order will be shipped in June, but the gross margin will fall to 42.8%, which is within our expectation. The gross profit margin of the whole year is similar to that of 2010. The main benefit is that the price rises more than 10% in the second half of the year, which will offset the impact of raw materials and taxes.

Retail level: Anta's same store sales growth in the second quarter was in the middle (5%-7%), slightly higher than the first quarter of the single digit growth, mainly affected by the weather instability during the period. The number of high unit numbers continued to grow throughout the year (7%-8%). In the first half of this year, the group added 295 retail stores (excluding Anta children's stores and Sports Life Series), accounting for 45% of the annual target, and the inventory level and discount level maintained at the retail level during the period. The group also maintains the goal of adding 650 Anta brand retail stores by the end of this year, when the group retails stores up to 8200.

Orders slowed in the first quarter of 2012: orders for the first quarter of 2012 increased by 15% year-on-year, compared with an average of 22% in 2011, mainly due to an increase in the average price of products over 10%, supporting orders growth. Although the London Olympics are approaching, we believe that the risks of the industry and the experience of the 2008 Olympic Games in Beijing do not anticipate that wholesalers will buy large quantities of stocks. Therefore, we believe that the growth of orders for the next quarter will be similar to the 15% growth in the first quarter.

Valuation: Although we think Anta's inventory and marketing management capabilities are better than those of the same industry, industry The backlog of inventory remains uncertain for 2012-13 years of revenue growth. Based on the increase in the risk of industry and order growth, plus the effective tax rate increase in the next two fiscal years, the expected profit margins are under pressure. We correspondingly lowered the 5.6% and 7.9% earnings of Anta 2012/13 for the year, and the compound annual growth of 13% in the 2011-2013 year earnings per share. The current price of Anta is equal to 10.9 times and 9.7 times of the forecast price earnings ratio in the past two years (2011 and 2012), which is lower than that in the past 3 years. It is 14 times higher than the forecast price earnings ratio in the past 3 years. As Anta's inventory and marketing management capabilities are better than that of its peers, we have continued to maintain its "buy" investment rating, and the target price has been reduced from HK $13.84 to HK $12.59, which is equivalent to the 14 forecast price earnings ratio of 2011, with a potential increase of 28.6%.