Aug. 26, 2019

ANTA Sports 2019 Interim Results Exceed Expectations Revenue Increases 40% and Reaches RMB14.8 Billion while Profit from Operations Increases 58% and Reaches RMB 4.2 Billion

Hong Kong, 26 August, 2019 – ANTA Sports Products Limited (“ANTA Sports” or the “Company”, stock code: 2020.HK, and its subsidiaries collectively the “Group”), a leading sportswear company in China, is pleased to announce its unaudited interim results for the six months ended 30 June 2019 (the “period”).

Financial Highlights

ANTA Group 2019 Interim Results Exceed Expectations

  • Revenue increased 40.3% to RMB 14.81 billion, in which ANTA brand’s revenue reached RMB 7.59 billion, up 18.3%. FILA brand’s revenue reached RMB 6.54 billion, up 79.9%.
  • Profit from operations increased 58.4% to RMB 4.26 billion, in which ANTA brand’s profit from operations reached RMB 2.44 billion, up 42.1%. FILA brand’s profit from operations reached RMB 1.89 billion, up 80.9%.
  • Profit for the period grew by 53.5% to RMB 3.07 billion (without the effect of share of loss of a joint venture), the fastest growth in the past six years.
  • Profit attributable to equity shareholders is RMB 2.48 billion, up 27.7%, which attained new heights, maintaining nearly 20% growth for the sixth consecutive year.
  • Interim dividend is HK31 cents per ordinary share. Dividend payout ratio is 30.5% of profit attributable to equity shareholders during the period.

Stable profitability and outstanding working capital management

  • Overall gross profit margin increased 1.8 percentage points to 56.1%.
  • Operating profit margin increased 3.2 percentage points to 28.7%.
  • Net profit margin up 1.8 percentage points to 20.8% (without the effect of share of loss of a joint venture).
  • Margin of profit attributable to equity shareholders was 16.8%.
  • Net cash generated from operating activities was RMB 3.44 billion.

Strong Retail Sales Performance

  • The total number of the Group’s store is 12,479. Among them, ANTA stores in China (including ANTA KIDS standalone stores) was 10,223. FILA (including FILA KIDS and FILA FUSION standalone stores) had a total of 1,788 stores in China, Hong Kong, Macao and Singapore.
  • Retail sales (in terms of the retail value) of ANTA branded products and other branded products during the period saw increases by low-teens and 60%-65% year-on-year respectively.

Operational Highlights

ANTA and ANTA KIDS

  • During the period, as the official sportswear partner of the COC, ANTA continued to support Chinese athletes. We sponsored 26 Chinese national teams in winter sports, boxing, taekwondo, gymnastics, weightlifting, wrestling, judo, surfing, water polo and golf, among other sports.
  • Meanwhile, with the Beijing 2022 Winter Olympic Games due in 1,000 days, ANTA collaborated with the Palace Museum’s “Culture Creativity”, in an initiative focusing on rebranding China’s traditional culture with a more modern approach, and launched a special Palace Museum edition of “ANTA X Winter Olympic Games” products. The series combined the classic colors of the Palace Museum with ANTA’s classic footwear and apparel, transforming history and tradition into youth and vitality.
  • In order to commemorate the 133rd birthday of Coca Cola, ANTA partnered with Coca-Cola to launch a number of collaborative footwear, apparel and travel products. The products aimed to evoke “happiness”, as Coca-Cola does.
  • In April, ANTA launched its brand-new “Hydrogen Running Shoes”. Based on FLASHLITE technology developed by ANTA, the product weighs a mere 110 grams. It is the first product line of running shoes by ANTA that focuses on light weight as its selling point. Its unique materials provide rigidity, sturdiness, support and durability, offering a unique and light sports experience to casual runners.
  • ANTA started to promote its ninth-generation stores in Chongqing and Shanghai. The new Shanghai ANTA ninth-generation store spans 2,000 square meters. ANTA upgraded the stores in terms of brand image, store appearance and consumer experience. “Digitalization”, “Youth” and “Professionalism” became the core concepts that powered ANTA’s new generation stores.
  • ANTA KIDS was the first domestic sportswear brand to enter the market and enjoys the advantage of being an early-entry trailblazer. The brand consistently promotes its philosophy to “Grow Up with Fun”. In recent years, ANTA KIDS has been aiming to incorporate more of a “fun” element in the kids’ growing journey through an integrated experience.
  • ANTA KIDS’ invited Zhang Yuexuan (Tian Tian), son of model Zhang Liang, to be the first endorser of the brand.
  • Following the Marvel heroes series last year, ANTA KIDS collaborated with Frozen during the period to launch crossover products, which have been welcomed and acclaimed by the general public.
  • As at 30 June 2019, the total number of ANTA stores (including ANTA KIDS standalone stores) in China stood at 10,223.

FILA, FILA KIDS and FILA FUSION

  • In addition to series like FILA RED, FILA WHITE, FILA BLUE and FILA ORIGINALE, we continued to work with renowned designer, Phillip Lim, on the FILA X 3.1 Phillip Lim series, leading the trends in high-end sportswear with collaborations with actors such as Huang Jingyu and Ma Sichun.
  • In March and April 2019, FILA launched the Classic Kiks and Disruptor Sandal shoe products respectively. Both of them ride on the continued focus on the classics, and became a must-have item for fashion icons.
  • FILA FUSION established its own standalone stores. Famous Japanese celebrity, Koki, became an endorser of the brand, marking its full entry into the market for youths aged 20 to 30.
  • During the period, FILA KIDS introduced several new series, namely FILA KIDS, RED LINE and FILA KIDS MODERN HERITAGE, expanding its infiltration into the high-end kidswear market.
  • Moreover, it launched the FILA KIDS DISRUPTOR SANDAL series, bringing fashionable and avant-garde elements to kidswear with its sandals.
  • As at 30 June 2019, the total number of FILA stores (including FILA KIDS standalone stores) in China, Hong Kong, Macau and Singapore reached 1,788.

DESCENTE

  • With nearly three years of development, DESCENTE has quickly established its brand position as a functional and professional sportswear brand in China.
  • DESCENTE and KH. TRAINING STUDIO jointly held a body building training session in Shanghai to encourage women to explore their own potential in sports, spurring them to build a fit body shape through professional sports.
  • DESCENTE also partnered with the famous British illustrator BEACH-O-MATIC to launch a summer crossover series. Based on the concept “DESCENTE MOVEMENT TEAM”, this series presented the four signature sports of DESCENTE – skiing, cycling, running and surfing – with vivid illustrations of carefree characters.
  • As at 30 June 2019, the total number of DESCENTE stores in China reached 115.

KOLON SPORT

  • KOLON SPORT has been promoting the development of an outdoor lifestyle, and will continue to expand the Group’s footprint in the outdoor sportswear market.
  • During the period, KOLON SPORT integrated existing stores and gradually increased the proportion of natural outdoor sports and urban outdoor sports products.
  • KOLON SPORT launched the Noach Project during the period, a series made of a natural fiber, eco-friendly hemp, which successfully attracted the interest of consumers.
  • As at 30 June 2019, the total number of KOLON SPORT stores in China reached 173.

SPRANDI

  • SPRANDI is a fashion sportswear brand that mainly focuses on the fashionable athletic footwear market.
  • SPRANDI relaunched its retro “Super Claw” shoes, but with brand-new elements added to the retro design that sparked a growing interest from customers in the product.
  • Leveraging the 60th anniversary of the classic toy Barbie, SPRANDI launched a limited edition crossover shoes series, enhancing the brand’s trendiness by becoming a hot topic on social media and further promoting a keen connection between its products and female customers.
  • As at 30 June 2019, the total number of SPRANDI stores in China reached 110.

KINGKOW

  • KINGKOW is a popular kidswear brand targeting the mid- to high-end market. The brand is an industry leader favored by kids and parents, and is dedicated to providing attractive designs and premium quality garments to kids aged 0 to 14.
  • During the period, KINGKOW successfully improved its store efficiency through optimizing its store network, while gradually improving its inventory turnover.
  • As at 30 June 2019, the total number of KINGKOW stores in China, Hong Kong, Macau and USA was 70.

Internationalization

  • ANTA Sports, together with other investors, set up an investor consortium to acquire Finland’s Amer Sports, with the brands of Salomon, Arc’teryx, Peak Performance, Atomic, Suunto, Wilson and Precor, among others.
  • The investment consortium will continue to closely cooperate with the Amer Sports team to complete the privatization, as well as unveiling its future potential by formulating potential expansion plans, in accordance to its goal to provide global consumers, sports enthusiasts and professional sports players with better sportswear products that promote better performance, experience and satisfaction.
     

Future prospect: Reorganization boosting the platform of synergistic incubation, grasping the opportunities of sports events

  • In the first half of 2019, ANTA Sports kicked off the “Year of Synergy and Value”, in which it implemented reorganization in order to improve the management’s effectiveness for synergistic incubation. ANTA Sports divided its brands into three categories for centralized management: Professional Sports, Fashion Sports, and Outdoor Sports. Each brand group cooperates closely with each functional department. Each brand group has dedicated teams for design, branding, and sales and distribution, and each brand group implements a “Category System”. Meanwhile, the Group set up an organization team for retail, sourcing, production and e-commerce functions to achieve the best synergistic effects.
  • ANTA Sports places emphasis on the quality of growth rather than its speed. It achieves this by providing high-quality consumer experience and service, and continuing to promote its “Value Retailing” strategy. Utilizing digitization to capture big data and examine changes in consumer demand helps in the adjustment of product designs and retail planning accordingly.
  • Major sporting events such as the Tokyo 2020 Olympic Games, the Beijing 2022 Olympic Winter Games and the 2022 World Cup Qatar are expected to become explosive growth catalysts for the sportswear market, providing unprecedented business opportunities over the next few years. As a leader in the sportswear industry, ANTA Sports is ready to seize these opportunities.
  • By the end of 2019, we expect the total number of ANTA stores (including ANTA KIDS standalone stores) in China to reach 10,300-10,400, and the total number of FILA stores (including FILA KIDS and FILA FUSION standalone stores) in China, Hong Kong, Macao and Singapore to reach 1,900-2,000. Meanwhile, It is expected to have 130-140 DESCENTE stores in China by the end of 2019. KINGKOW will have a total of 90-100 stores and SPRANDI will have 120-125 stores by the end of 2019, while KOLON SPORT will have a total of 170-180 stores.
     

Ding Shizhong, Chairman of ANTA Sports, said,

“In the first half of 2019, China’s sportswear industry has shown resilience under the volatile market, maintaining healthy and stable development. Although the sportswear industry has huge opportunities, the competition has also become increasingly fierce. Chinese enterprises need to take action in order to break out of the dilemma by constantly building up its own strengths through innovation and growth. Our determination and sense of responsibility will support the growth of ANTA Sports and turn us into a global brand to compete on the international platform. The evolution of Chinese brands from ‘Made in China’ to ‘Created in China’ marks a milestone in winning recognition from global consumers.”

“In order to take Chinese brands to a global level, product quality, value and branding are far more important than low prices. Moving from competing in prices to competing in value and innovation, is the way for Chinese brands to go global. Just as ‘It takes a good blacksmith to make steel’, Chinese brands need to strengthen their arsenal with quality products in order to enter bigger markets. In order for ANTA Sports to become a true ‘Great Brand’, we need to have a capacity for innovation that is able to compete on a global scale, and to become a brand that dares to create. By providing more professional, high-value and internationalized products to customers, the Group can then transform from ‘an affordable brand’ to ‘a desirable brand’.”

-End-

<BACK