[ET Net News Agency, 9 February 2018] Daiwa Research lifted its target price for Anta
Sports Products (02020) to HK$40 from HK$36.1, and maintained its "buy" rating.
The research house said Anta's share price has corrected by 8% since early February. As
it believes Anta is set for its highest YoY earnings growth since 2009, the correction is
unjustified. Daiwa recommended that investors take advantage of share-price weakness.
It forecast 30% YoY net profit growth in 2017, driven by gross margin expansion and
operating leverage, due to strong revenue-growth momentum for its higher-margin
businesses, FILA and Anta brand's e-commerce. Daiwa believes Anta's multi-brand approach
and omni-channel expansion will drive gross margin expansion of 2.4pp YoY to 50.8% in
2017.
As for 2018, Daiwa believes Anta will sustain robust high-teen top-line and double-digit
net profit growth momentum in 2018. Furthermore, with over CNY10bn in net cash and intent
to pursue M&A to strengthen its portfolio, the research house would not rule out the
possibility of an acquisition/JV in 2018. (KL)