[ET Net News Agency, 27 August 2020] Goldman Sachs raised its target price for Anta
Sports Products (02020) to HK$93 from HK$82 and maintained its "buy" rating.
The research house said Anta's 1H net income of Rmb1,658mn was better than the profit
warning comment earlier and 6% higher versus Goldman's estimates, due to better gross
margin and government grant.
Goldman views the entire announcement set as neutral to a slight positive: earnings and
free cash flow should be deemed as positive result while the shift in channel strategy
should be profit accretive but margin diluting in 2021.
Goldman fine-tuned its 2021-22 net income. It expects Anta can still deliver a 24% net
income CAGR in 2019-22.
With global sportswear brands seeing healthy growth rate and re-rating, Goldman thinks
Anta's growth rate versus valuation remains attractive at 27x 2021 P/E versus global
sportswear brands' 33x P/E. (KL)