The latest: Sportswear retailer Anta Sports Products Ltd. (2020.HK) on Thursday announced that retail sales of its Anta-branded products rose by a high single-digit percentage amount in the third quarter, and its Fila-branded products recorded even higher growth in the low-teens range. Meanwhile, its other branded products recorded a 45%-50% surge during the quarter.
Looking up: After Anta announced the update, Morgan Stanley issued a research report saying the company’s data shows that demand for sportswear remains resilient despite the weak economy. Morgan Stanley said it expects Anta’s sales to record double-digit growth in 2024.
Take Note: The company’s Fila brand sales grew by a low-teen percentage in the second quarter, while all of its other brands grew 70% to 75% in that period, meaning the latest growth rates represent a slowdown from those levels.
Digging Deeper: China’s retail sector has started to rebound since the abandonment of the country’s “zero Covid” policy last December, benefiting names like Anta. The company has stated that it will continue to pursue a “single focus, multi-brand and globalization” strategy to maintain high quality growth going forward. In the first half of this year, its revenue rose 14.2% to 29.65 billion yuan ($4.07 billion), double its pre-pandemic level in 2019. Its net profit jumped nearly 40% to 5.26 billion yuan.
Market Reaction: Anta shares initially fell 2.8% on Friday, but later pared the losses and were down by a milder 0.3% at HK$91.25 by the midday break. The stock now trades in the middle of its 52-week range.
Translation by A. Au
Have a great investment idea but don’t know how to spread the word? We can help! Contact us for more details.
To subscribe to Bamboo Works weekly free newsletter, click here
