PEAK Sports: Industry Downturn In Demand, Excellent Marketing Performance, Big Drop

A "PEAK player, take the NBA championship", let the main attack in recent years.

PEAK sports (01968.HK) in the market has become famous.

As the exclusive official market partner of the US professional basketball league (NBA) in China, PEAK has long been known.

However, according to the current earnings data, PEAK has no fame and fortune, but is still in the second tier of the domestic sports apparel brand.

PEAK sports is mainly engaged in design, manufacture and distribution.

"Brand sports products, including footwear, clothing and accessories.

It was listed on the main board of Hongkong stock exchange in 2009.

According to the 2011 earnings report, the turnover of the company during the reporting period was 4 billion 650 million yuan, an increase of 9.4% over the same period, and the net profit attributable to the shareholders of the listed company was 780 million yuan, down 5.4% compared with the same period last year.

During the reporting period, there were 7806 retail outlets, a net increase of 582, all over China's first tier, second tier and three tier cities, and the first PEAK store opened in the United States at the end of 2011.

In 2011, the company accounted for 90.1% of the total turnover in the Chinese market, while the overseas market accounted for 9.9% of the total turnover.

"Although the scale of PEAK is not as large as Lining and Anta, its popularity is no less than that of these industries. The classic advertising slogans have been deeply rooted in the hearts of the people."

Ceng Yanling, a researcher at the third financial Hong Kong stock exchange, said that from the perspective of brand promotion, PEAK sports strategy has been regarded as a success.

In February, after the Jeremy Lin rotation of American professional basketball, PEAK then joined in competing for Jeremy Lin as spokesperson.

Although Jeremy Lin finally signed a contract with Nike, PEAK's bid competition has already attracted consumers' attention to the company.

At this London Olympic Games, PEAK fishermen launched a net sponsorship of 7 national teams, less than 11 sponsored Adidas, and a Nike sponsor of the US national team.

It is worth noting that the company

The success of the company has limited practical contribution to the company.

Although advertising can bring brand benefits and intangible assets, the current situation that advertising costs account for more than income is common in sports stocks.

In the fourth quarter of 2012, PEAK ordered the amount of orders to get double-digit backwards (about 30%), and the same quarter sales growth in the first quarter of 2012 was flat, indicating that PEAK had no signs of performance recovery.

Ceng Yanling thinks, from the data that has been disclosed, PEAK sports is likely to lose 40% of its performance this year.

An analyst who asked not to be named told this reporter that PEAK sports has no investment value at present, the absolute valuation level is at a record low, and there is no possibility of a rise in the short term, only a flash in the pan.

He believes that from the current point of view, the company's retail system can not bring new results to the performance, because the industry is not good, the market demand has slowed down sharply, retail channels have long been overstocking.

Wind data showed that as of August 10th, PEAK sports's stock price fell 29.99% this year, closing at HK $1.33.

For the relatively low valuation of the company, Ceng Yanling believes that PEAK's share price is cheaper than Anta, either from the P / E ratio or the net market rate.

At present, PEAK's dynamic P / E and market rate are 2.9 times, 0.56 times, and Anta is 5.5 times and 1.49 times.

Liang Yuan, director of Research Department of Hang Ming securities (Hongkong) believes that PEAK sports has a short-term demand for technical callbacks, but believes there is little chance of a new low.

"At present, the valuation is reasonable, and the stock price has reflected the previous unfavorable factors.

The main risk of investment lies in the fact that if the industry continues to fall into a trough and sales can not be reversed, it may again crack down on investor confidence.