On March 26, China’s sportswear giant Anta Group (02020.HK) announced its full-year results for 2023: During the reporting period, the Group adhered to the strategy of “single focus, multi-brand, globalization,” and all its brands achieved growth, increasing the Group’s revenue by 16.2% year-on-year to 62.356 billion yuan. The Group ranked first in China’s sporting goods industry for two consecutive years (surpassing Nike China, Li-Ning, and Adidas China), and its net attributable profit increased by 34.9% year-on-year to RMB10.24 billion, surpassing the 10 billion mark for the first time.
It is worth mentioning that the revenue of the main brand, Anta, increased by 9.3% year-on-year to 30.306 billion yuan, becoming the first Chinese sports brand to surpass 30 billion yuan.
At the close of trading on March 26, the Group’s share price was up 3.15% to HK$83.55 per share, up 10.3% since the beginning of the year, with a total market capitalization of HK$236.7 billion.
Ding Shizhong, Chairman of the Group, wrote in the Chairman’s Statement that the Group has a clear mission – to integrate the spirit of surpassing oneself through sports into everyone’s life and that we aim to be not only a leading Chinese brand but also a leading global multi-brand sporting goods group, moving from “excellence” to “greatness.” We will be not only a leading Chinese brand, but also a world-leading multi-brand sporting goods group, moving from “excellent” to “great”. To realize this vision and mission, we have strengthened the Group’s three core competencies: “multi-brand synergistic management,” “multi-brand retail operations,” and “globalized operations and resource layout. “These capabilities are the foundation and strength of the Group’s ability to continue to win battles.
“As China’s economy enters a new normal, we need to have a broader vision in the face of new historical missions, tests and development responsibilities, so that our brands can walk on two legs, namely deepening our roots in China and going overseas to move to a broader horizon. I am confident that with the Group’s adherence to the spirit of long-termism, it will continue to support us in making more valuable changes, creating a century-old company and empowering everyone who loves sports.”
Through the remarks of the Group’s executives and the content of the latest financial report, we can clearly feel that “globalization” has indeed risen to the core strategic level of the Anta Group, and the Group’s pattern of “deep plowing in China” and “going overseas” has been taken into account. The pattern of “deep plowing in China” and “going overseas” has become clearer and clearer.
China market: Cross-brand profitability soars
In terms of brand-specific performance during the period
Anta: Revenue increased by 3% year-on-year to RMB30.31 billion (2022: RMB27.72 billion), with gross profit margin and operating profit margin increasing to 54.9% (2022: 53.6%) and 22.2% (2022: 21.4%), respectively.
FILA: Sales increased by 6% year-on-year to NT$25.10 billion (2022: NT$21.52 billion), with gross profit margin and operating profit margin improving significantly to 69.0% (2022: 66.4%) and 27.6% (2022: 20.0%), respectively.
DESCENTE and other brands such as KOLON SPORT: Combined sales increased significantly by 7% year-on-year to NT$6.95 billion (2022: NT$4.41 billion), with gross profit margin reaching 72.9% (2022: 71.8%) and operating profit margin improving significantly to 27.1% (2022: 20.6%).
–DESCENTE’s total retail sales exceeded RMB5 billion.
The Group said that during the period under review, DESCENTE achieved significant growth in store efficiency, with total retail sales exceeding RMB5 billion for the first time. The brand continues to focus on three elite mass sports: skiing, triathlon and golf:
Skiing: As the starting point of DESCENTE’s professional sports genes, in November 2023, DESCENTE announced that it had become the partner of the China National Snowboard U-Course Team and the China National Alpine Skiing Team, and launched the national team-inspired collection at the launch event in Altay, Xinjiang.
Golf: During the reporting period, DESCENTE GOLF opened stand-alone golf shops in China’s top 100 golf courses and partnered with Chinese and international golf stars such as Grand Slam winner Danny Willett, Li Haotong and Jiang Xiaolin.
Triathlon: During the period, DESCENTE pioneered its own event IP “Windbreaker Ride” and upgraded the AWAKEN Windbreaker series.
–KOLON SPORT opened its largest store in China.
In April 2023, KOLON SPORT held a 50th anniversary exhibition in Shanghai, showcasing the brand’s 50 years of exploring nature and launching limited edition commemorative products.
In terms of product design, KOLON SPORT has the advantage of having a high proportion of female customers and continues to expand its young and female product lines. In addition, the brand launched OBLIK, the first tent-inspired camping shirt, focusing on the two core scenarios of hiking and camping.
During the period under review, KOLON SPORT accelerated the upgrading of its terminal store image to create a new retail image and opened its first brand culture center store, KOLON 1973, in Shanghai Shangsheng Xinsho, which became the brand’s largest single store in China.
— Acquisition of MAIA ACTIVE to complete the women’s business segment
In October 2023, the Group announced the acquisition of MAIA ACTIVE business to strengthen its women’s market business and provide more differentiated product lines to meet consumers’ needs.
MAIA ACTIVE includes sports underwear, sports bottoms, sports tops and accessories, with the main product price range of RMB300-600. In addition, a children’s product line, MINI MAIA ACTIVE, was just launched in mid-May 2023, which mainly targets children aged 6 to 14 years and includes yoga pants, sunwear and T-shirts.
According to the Group, in terms of “single focus”, in addition to continuing to plow the popular sports footwear and apparel track, the Group will double its focus on vertical sports with high growth potential, and make significant breakthroughs in mental category construction and consumer awareness, so as to continuously maintain its competitive edge.
Going overseas: How Anta Group Embraces Globalization in Multiple Dimensions
According to the Group, in addition to penetrating deeply into the local market and building a leading position in the Chinese market, we are taking the initiative to participate in high-level competition in the international market, seizing broader business opportunities with a global perspective, and providing our products and services to consumers at home and abroad.
–The Group established the Southeast Asia International Business Unit, and the Anta brand landed in Singapore and Thailand.
In February 2023, the Group established the Southeast Asia International Business Unit to promote its “multi-brand” and “globalization” strategies. In June 2023, the Anta brand opened its first company-owned store in Singapore, marking an important milestone in the brand’s expansion into the Southeast Asian market.
During the period under review, the brand further expanded into the Southeast Asian market with the opening of its first specialty store in Thailand and continued to expand in core shopping districts in the Philippines and Malaysia.
Why Southeast Asia as a bridgehead? According to the Group, the Southeast Asian region is undergoing rapid economic development. These Asian economies have greatly benefited from the trend of globalization and urbanization, with the emergence of more and more middle classes, increasing consumption power and strong demand for quality products and services from local residents, providing huge potential business opportunities that are waiting to be fully explored.
–Anta Partners with Superstar Irving to Launch “Irving Generation” Sneakers in the U.S. and China
In July 2023, Anta Group announced that it had signed an agreement with American basketball superstar Kyrie Irving to be the spokesperson for Anta’s basketball products, and announced that it would create an exclusive personal product line for Irving.
In March this year, the first generation of Kyrie Irving’s signature Anta sneakers were launched simultaneously in the Chinese and US markets. In China, the Anta Irving Generation debuted at the Anta flagship store in Wangfujing, Beijing; in the U.S., the Anta Irving Generation debuted at Sneaker Politics in Deep Ellum, Dallas, where Kyrie Irving personally attended and which is considered the epicenter of local street culture.
After the U.S. debut, the Amer Sports Owen Generation kicked off global distribution in key cities around the world, including New York, San Francisco, Dubai, Singapore, Manila, Beijing, Shanghai, Guangzhou, Hangzhou, Xiamen, Chengdu and Wuhan.
–Amer Sports officially landed on the New York Stock Exchange, and Anta increased its investment.
On February 1 this year, Amer Sports, a Finnish sporting goods group under Anta Group, held a bell-ringing ceremony at the New York Stock Exchange, and Amer Sports started its listing journey with an issue price of US$13 per share, and its stock code is “AS”.
On the same day (February 1), Anta Group announced that Amer Sports had completed its initial public offering and that the Group, as a cornerstone investor, had decided to purchase 16.92 million common shares for a total investment of $220 million. Following the purchase, the Group will hold a total of 220 million shares of Amer Sports common stock, representing approximately 44.74% of the total number of Amer Sports shares outstanding.
According to Anta’s financial report, in 2023, the revenue of AS Holding, a joint venture of Amer Sports, will increase by 30.1% year on year to RMB31.248 billion (2022: RMB24.03 billion), while EBITDA will increase by 45.4% year on year to RMB3.745 billion (2022: RMB2.58 billion). During the reporting period, the “five billion” targets for the three core brands (Shizukuishi, Salomon and Wilsons), the DTC business and the China market were achieved one year ahead of schedule, and the momentum of global development was favorable.
As the largest shareholder of Amer Sports, we believe that Amer Sports will make a significant positive contribution to the Group in the future through the complementary strengths and strategies of both parties, and will be able to enhance our globalization strategy,” the Group said.
Looking ahead, the Group noted that it is cautiously optimistic about the business outlook for 2024 given the uncertainties in the global economy, the continued impact of geopolitical risks and the high base of comparison effect in the first half of 2023.
From high-end to mass, we believe China’s sporting goods will remain a quality track with medium to high growth at different consumption levels. The outdoor economy and niche sports continue to be popular, the women’s sports market has great growth potential, and youth sports also shows a rapid development trend, making sports consumption a basic choice for more people’s lifestyles. Therefore, we remain optimistic about the long-term prospects of the industry.
By the end of 2024, the Group expects,
- The number of Anta and Anta Kids stores in Mainland China and overseas will be 7,100 to 7,200 and 2,800 to 2,900, respectively (7,053 and 2,778 at the end of 2023).
- The number of FILA stores (including FILA KIDS and FILA FUSION standalone stores) in Mainland China, Hong Kong, China, Macau, China and Singapore will be 2,100 to 2,200 (1,972 at the end of 2023).
- The number of DESCENTE stores in Mainland China, Hong Kong, China and Macau, China is expected to be 220 to 230 (187 by the end of 2023).
- The number of KOLON SPORT stores in Mainland China and Hong Kong, China is expected to be 180 to 190 (164 by the end of 2023).
About Anta Group
Founded in 1991, Anta Sports Products Company Limited (Stock Code: 2020.HK), which was listed on the Main Board of the Hong Kong Stock Exchange in 2007, is a leading global sporting goods company. Over the years, Anta Sports has been principally engaged in the design, development, manufacture and marketing of sporting goods, providing consumers with specialized sporting goods, including sports footwear, apparel and accessories. Through a diversified portfolio of brands, including Anta, FILA, DESCENTE, KOLON SPORT and MAIA ACTIVE, as well as the formation of an investor consortium to successfully acquire Amer Sports, a Finnish sports brand group in 2019 – with internationally recognized brands such as Salomon, Arc’teryx, Peak Performance, Atomic and Wilson.
丨Source: Official financial report
丨Photo credit: Brand website, courtesy of Anta
丨Reporter：Wang Jiaqi
丨Editor：LeZhi
