【行业研究报告】安踏体育-Fair guidance but decent inventory and margin

22Mar2023
CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdate
AntaSports(2020HK)
Fairguidancebutdecentinventoryandmargin
Thesharpdropininventorylevelfor2023YTDiscertainlyadecentsurprise,
andwedothinkthisisjustthebeginningoftheturnaround.Backedbybetter
marginimprovementandnetprofitgrowth,Antaremainsasoursectortoppick.
FY22resultslightlybeat.Anta’ssalesgrewby9%YoYtoRMB53.7bn,
inlinewithCMBI/BBGest.andnetprofitdecreasedby2%YoYtoRMB
inlinewithCMBI/BBGest.andnetprofitdecreasedby2%YoYtoRMB
7.59bn,5%/4%betterthanCMBI/BBGest.,mainlydrivenbyhigherthan
expectedgovernmentgrantsandnetfinanceincome.
PositiveretailsalesgrowthandstableretaildiscountsinJan-Feb2023.
ManagementstatedthatAntaandFILAretailsalesgrowthinJan-Feb2023
werepositive,farbetterthantheiroriginalexpectation,whichisfairlydecent
giventhehighbaseduringthe2022WinterOlympics.Moreover,retail
discountsin1Q23alreadyreturnedtoasimilarlevelto1Q22.
Inventorytosalesratiowasamajorbeatsofar.Inventorytosalesratio
fellsharplytoaprettyhealthylevelof4.5to5monthsinJan-Feb2023,
accordingtothemanagement,vsover5/about6monthsforAnta/FILA
backin4Q22,helpedby:1)moreconservativetradefairorderssince2H22,
2)cutinprevioustradeordersand3)betterthanexpectedretailsales
growthYTD.InventoryclearancewillstillbetheirtoppriorityinFY23E.
AfairFY23Esalesgrowthguidance.Managementistargeting10%+retail
sales/listedcosalesgrowthforbothAntaandFILA,whichisjustinlinewith
CMBIest.ofhigh-teens/10%+.Intheirview,FILA’sgrowthcouldbefaster
thanAnta,thankstoalowerbase(FILAwashitharderwithitshigherTier1-
2citiessalesmixduringthepandemic).WearealsoconfidentaboutFILA’s
guidanceasitsrecentreformsarequitesuccessful,including:1)launches
ofmoreprofessionalsportsproductsand2)moredifferentiationbetween
theFILAcoreandFILAfusion,whileAnta’sgrowthwillbedrivenby:1)ASP
growth,2)morenewandlargestores,3)surgeinstoreproductivitythrough
DTCreformsandclosuresofmoreunderperformingstore,and4)upcoming
AsianGames2023inHangzhou.
Butmarginimprovementiskeytowatch.WebelievetheOPmargincan
reboundmeaningfullyto21.9%inFY23E(from20.9%inFY22),drivenby:
1)normalizationofretaildiscounts,2)absenceofinventoryprovisions,3)
operatingleveragefromFILA’sturnaroundand4)continualrampupofother
brands(DescenteandKolon’sOPmarginwere10%+/~10%inFY22).But
ontheotherhand,wedoexpectA&Pexpensestoremainstable(at~10%
ofsales)andsoasthelabourcostsandR&DexpensesinFY23E.
MaintainBUYandraiseTPtoHK$126.05,basedon33xFY23EP/E(up
from31xabouttofasterNPgrowth),about1s.d.above5yearsaverageof
26x,supportedby14%/21%sales/netprofitCAGRduringFY22-25E.We
raisedFY23E/24Enetprofitforecastby3%/2%tofactorinbettermargins.