After domestic sports brands such as Li Ning and Xtep released their 2021 interim reports, Anta also ushered in its “highlight moment.”
At noon on August 24, ANTA Sports (2020.HK) disclosed its 2021 interim results. As of June 30, Anta Sports achieved revenue of 22.812 billion yuan, a year-on-year increase of 55.5%; net profit attributable to shareholders (including shares of joint venture profits and losses) was 3.84 billion yuan, a year-on-year increase of 131.6%. This also means that Anta’s average daily net profit is 21.21 million yuan.
“In the sporting goods industry, we should be the best-performing company.” Zheng Jie, executive director and president of Anta Group, said bluntly at the performance exchange meeting on August 24
As of the close of trading on August 24, Anta Sports’ share price closed up 0.65% at HK$171.2 per share. In the past 250 days, Anta’s stock price has increased by 107.9%, and its current total market value is HK$462.8 billion.
However, the capital market’s reaction to Anta’s outstanding performance has been relatively conservative. Huang Kai, an independent analyst in the fashion industry, believes that Anta has already released a signal of high growth in the first half of the year on July 8, with a gain of nearly 7 points on the 9th. Combined with Anta’s size and the overall increase this year and over With a price-to-earnings ratio of 50 times, it is normal that the financial report did not make waves in the stock market on the day it was released.
1 Anta = 2.2 Li Ning
In the first half of this year, Many indicators of Anta hit historical records.
As of June 30, the revenue of the Anta brand in the first half of the year increased by 56.1% year-on-year to 10.578 billion yuan; the revenue of the FILA brand increased by 51.4% year-on-year to 10.827 billion yuan, and the revenue of other brands Revenue increased by 90.1% year-on-year to 1.407 billion yuan, both record highs.
In addition, its gross profit margin also exceeded the historical level in the same period, reaching 63.2% in the first half of the year. Among them, the gross profit margins of the main brands Anta, FILA and other brands were 52.8%, 72.3% and 70.4% respectively, a year-on-year increase of 11.2, 1.8 and 5.9 percentage points.
It is worth mentioning that Anta is also far ahead of its peers in important indicators such as revenue scale, net profit scale and gross profit margin.
As of June 30, Anta’s revenue of 22.812 billion yuan was approximately 2.2 times that of Li Ning (10.197 billion yuan), 5.5 times that of Xtep (4.135 billion yuan), 361 7.3 times that of 3.107 billion yuan. From the perspective of net profit, Anta’s net profit was 3.84 billion yuan, which was approximately 2 times that of Li Ning’s 1.962 billion yuan, 9 times that of Xtep’s 427 million yuan, and 10 times that of 361 Degrees.
In terms of gross profit margin, Anta’s overall profit margin in the first half of 2021 was 63.2%, which was higher than Li Ning and Xtep’s 55.9% and 41.8% in the same period.
Huang Kai believes that the improvement in Anta’s overall gross profit margin is mostly attributed to the main brand Anta. “First, better domestic epidemic control has led to a steady recovery in consumption; second, Anta has accelerated the establishment of a complete DTC model; third, the Xinjiang cotton incident has led to a return of consumption; fourth, Generation Z, which recognizes domestic brands more, has become the main consumer. The last two points This has made consumers more receptive to ANTA products sold at regular prices.”
Image source: Anta official Weibo
In terms of the number of stores , Anta also far surpasses brands such as Li Ning and Xtep. As of June 30, there were 9,788 ANTA brand stores, 1,979 FILA brand stores, 151 KOLON brand stores, and 178 DESCENTE brand stores. During the same period, the number of Li Ning and Xtep stores was 6,745 and 6,015 respectively.
Exceeding Adidas and catching up with Nike
In China’s sports shoes and apparel market , in addition to competing with local brands, the gap between Anta and international brands is also narrowing.
In the first half of 2021, Adidas Greater China revenue was 2.405 billion euros (approximately 18.3 billion yuan), gross profit margin was 54%, and operating profit was 758 million euros (58 billion yuan). In the first half of 2021, Anta has overtaken Adidas in these three indicators. In addition, Tmall platform data also shows that from January to July this year, the total transaction volume of Anta Group’s brands ranked first in the “Sports and Outdoors” category in terms of corporate dimensions.
After the “Xinjiang Cotton Incident” in March this year, foreign sports brands were boycotted by Chinese consumers, leading to a periodic decline in sales. Anta took the opportunity to high-profile sign Wang Yibo, who originally endorsed the Nike brand.
“In the context of the booming development of domestic sports brands, we have Wang Yibo’s blessing to promote Anta’s main brand to achieve such results in the first half of 2021.” Zheng Jie expressed at the performance meeting.
Having completed its overtaking of Adidas Greater China, is Anta’s growth trend sustainable? Huang Kai thinks it is possible, but the growth rate will slow down. “Compared with Li Ning, which is a single brand, Anta Group, which has multiple brands and is all in good growth momentum, will be more stable. Overtaking Adidas China is just the beginning. In the next five years, Anta Sports will grow to the size of Nike China, or even surpass it.”
However, Cheng Weixiong, a brand management expert in the footwear and apparel industry and general manager of Shanghai Liangqi Brand Management Co., Ltd., has a more conservative growth forecast for Anta. He believes that it is possible to surpass Nike with the Anta brand’s consolidated statement indicators, but Anta’s future also depends on whether the digestion of the acquisition meets expectations. “If not, it will very likely drag down Anta’s overall development in the future. The main brand Anta has strong growth, but…Local competitor Li Ning also faces considerable challenges. ”
According to Euromonitor data, although Anta’s market share in the domestic sportswear market reached 22.3% in 2020, it surpassed Adidas (19.6%) and Nike (16.4%), which have led in the past many years. Ranked first. However, in terms of the overall domestic sports shoes and apparel market share, it is still second to Nike and Adidas.
In addition, according to Times Finance Observation, “Xinjiang Cotton Incident “The impact on international brands is also decreasing. On July 29 this year, a pair of Nike’s Barb co-branded basketball shoes with a retail price of 1,599 yuan were snapped up by consumers. On the Dewu platform, the highest price of this pair of sneakers was 29,999 yuan. In the past three days, more than 100 pairs of this sneaker have been sold on the platform.</p
