[ET Net News Agency, 13 July 2020] Huatai Research lifted its target price for Anta
Sports Products (02020) to HK$90.6 from HK$73 and maintained its "buy" rating.
The research house estimated Anta's revenue decreased by 7% to RMB13.8bn and net profit
declined by 30% to RMB1.7bn in 1H. This implies a net margin of 12.6%, a contraction of
4.2pp, due to (1) worsened retail discount for the Fila brand owing to heavier promotions
and higher online sales; (2) remedial measures taken by the Anta brand to aid its
distributors; (3) substantial losses by Amer Sports, given the global pandemic; and (4)
operating deleverage.
That said, Huatai remains positive on Anta's earnings prospects and project net profit
growth to recover to 33% in 2H, mainly driven by the Fila brand. It stays optimistic about
Anta's multi-brand strategy to cater to consumers' demand for a healthier lifestyle in
the long run. (KL)