Will Anta Be The Next Samsonite With Blue Orca Sniping?

Stock speculation is a game running against information gap. This truth was once again confirmed in Anta (02020) today (May 30th).

Short selling Samsonite (01910) and PDD.US (Blue), a short seller, focused on Anta, triggering a drop in the intraday share price, and the short selling of Anta's stock price narrowed down after the short selling came out.

The influence of the short selling organization is fading away, and behind it is smarter investors.

At two o'clock in the afternoon, the mobile phone received a reminder of Anta's stock price change, a drop of over 10%.

I immediately went to find the reason, and then I saw a message shared by netizens:

From the time line, it can be seen that around 3 p.m. is the bottom of the deep V, and the stampede reached a high point. Anta's response to this news has dropped to 12%.

However, in the last hour of trading, the share price was gradually bottoming up, and it eventually fell by 5.53% today.

A short selling report seems to have broken the days of a company.

The short selling organization of Anta is Blue Orca, and investors in Hong Kong stock market should be familiar with him. Last year, it reported that it was a great deal of Samsonite and US stock.

It is not unusual for the market to become more open and empty eyed. Investors in the Hong Kong stock market are more sophisticated in dealing with this kind of news.

In a positive way, it is a good thing to supervise the market when there is a short supply. Inferior enterprises just step on one foot, and reasonably supervise excellent enterprises.

If there is a long-term follow-up of the company's business, it is possible not to be cut.

For enterprises, as long as there is no problem in the operation of the business, it is not the end of the day to be trampled on.

Such as new beauty because of poor performance, the current price has been lower than the Blue Orca short price; and many more strong by strong support, in March, the stock price hit a record high.

In the case of Anta, Blue Orca didn't seem to be doing enough homework.

Today, the founder and CIO Soren Aandahl of Blue Orca shared his short selling Anta report at the 2019 Sohn Hongkong Investment Forum in Hongkong (Sohn Hong Kong Investment Conference). At present, its official website has not published relevant documents, but there are live sharing flows on the Internet.

1, questioned Anta's FILA revenue.

1) you cheat, exaggerate 41%.

Anta's earnings report did not specifically disclose the specific performance data of FILA. It only referred to its strategic significance. It was estimated that the overall revenue growth of Anta in 2020 was 15-20% while FILA had 30%+.

Blue Orca seized this point, calling FILA inland income opaque.

Then you can figure out the logic and result of your calculation.

At present, FILA is the main retail business in China, accounting for 80% of the total.

Blue Orca gives a chart showing its formula for deriving retail income based on wholesale income.

See below:

He based on the wholesale income of FILA Korea, and the wholesale income of FILA in 2018 was 4 billion 700 million yuan.

According to the formula, the income of the FILA mainland should be around 51.16 yuan, which is 41% higher than the 8 billion 700 million yuan guideline issued by Anta, which means that Anta has exaggerated the revenue of the FILA mainland.

In the absence of a complete report, we can not judge the reliability of this formula.

However, it is difficult to convince investors that the sales data of Chinese Direct stores can be derived from the data of wholesale income of FILA in Korea.

2) too good to be true

Just as many people think beautiful women are always deceiving people, Blue Orca also thinks that too good performance is always a bit untrue.

This is one of the reasons why it attacks too much.

In terms of single store income, the mainland FILA is much higher than that of Korea and Taiwan FILA, and Blue Orca thinks the gap is too large.

As can be seen from the above picture, the single store revenue in mainland China in the 2017 fiscal year is about 5 million 100 thousand yuan, which exceeds 60% in the Korean region and 144% in the Taiwan area. In the 2018 fiscal year, FILA's single store income in the mainland was 6 million 300 thousand yuan, exceeding the 29% in the South Korean region and 134% in the Taiwan area. FILA

In the 2018 fiscal year, the income of single stores in mainland, South Korea and Taiwan increased by 24%, 53% and 29% respectively compared with the previous year. If the better the data is, the more likely the logic of problems will exist. Is there more reason to doubt the performance of FILA in Korea?

If so, is it possible to deduce the mainland's FILA income from the wholesale income of FILA in Korea?

Just because the mainland's single store income is higher than the other two regions, it is obvious that it is a little sloppy to doubt the income problem, or there is a deviation between Blue Orca's cognition of mainland consumers' ability.

From a macro level, China's GDP in 2018 increased by 6.6% compared with the previous year, and South Korea has increased by 2.7% to a new low of six years, and Chinese consumers are still in the trend of consumption upgrading. From the micro level, the large China region is still a growth point in many domestic and foreign enterprises, such as Nike, ADI and Lulu lemon (LULU.US), such as the Canadian geese (GOOS.US), which has recently released the slowest income growth in the 8 quarter, and the company is seeking to expand its growth in China.

In addition, Blue Orca also questioned FILA's pride in its role in the mainland, saying that no more than 40 thousand was expected to be more than 20 thousand.

This thing is a bit hard to falsify.

But on the whole, compared with other sports and functional brands, the price of FILA is much higher than that of other brands.

Take yourself experience as an example. Frequent shopping in a shopping mall in Shenzhen often involves Sketchers discount sales, with a pair of shoes as low as two hundred or three hundred, while FILA rarely promotes sales activities.

In addition, FILA has done a good job in women's product marketing, and women's purchasing power and frequency have been better. These may be one of the reasons that their Ping efficiency is higher than their counterparts.

2, questions about Anta's management.

Mainly from two aspects.

1) holding large amounts of cash and still raising funds several times.

2) the cash flow is steady, but the dividend rate has dropped from 70% to 45%.

The attack on Blue Orca is not convincing enough.

As we all know, Anta has made frequent acquisitions in recent years, especially the recent acquisition of Amer Sports.

According to the previously disclosed financing structure, Anta sports should at least inject 1 billion 543 million euros (about 11 billion 900 million yuan). As of the end of 2018, Anta accounts for about 10 billion yuan in cash and cash equivalents.

In addition to dividends, investors can also rely on share price gains to gain. Before May 30th, Anta rose 34%, while Hang Seng Index rose 7%.

To sum up, Blue Orca believes that Anta's net interest rate will not rise in 2019, still 17%, and the company's management will give 20% discount and PE to 17.8 times.

The target price in 2019 was HK $32.93, which was 34% lower than the closing price in May 29th.

For Chinese investors familiar with the Chinese market and Anta, this is not an excellent short selling report. There is too much speculation and lack of strong evidence. Today's stock price trend illustrates this point.

At present, Anta, Nike, ADI PE values are 27, 31 and 29 respectively. In the light of Anta's reliance on the domestic market position and the imagination brought by the acquisition of Amer, do you think Anta's current position is still safe?