On behalf of the Board, I am pleased to present our interim results for the six months ended 30 June 2018.
Reached Ambitious KPIs, Carried Out Transformational Innovations
In the first half of 2018, the global economy continued to perform steadily despite political uncertainties and challenges. Meanwhile, the sportswear industry in particular continued to prosper amid favorable policies from the government. Taking advantage of market opportunities, the Group grew stronger with the support from every employee. The celebration of the Company’s 10th anniversary of going public also served as a marching call for all of us to embark on a new course of development and advancement. China has set itself the goal of becoming a sports powerhouse and the sportswear industry is entering a golden era of rapid growth with unprecedented infrastructure development. Whether or not the brands can seize these opportunities will be the key to the success of each company. For years, the Group always stays innovative and prepared to embrace ourselves for these opportunities and challenges.
In addition, we benchmark ourselves against the high standards of distinct international enterprises in order to identify the gaps between us and to seize development opportunities. We understand the innovation of business model, products and services, etc. are beneficial for long term sustainability. Facing the unique characteristics of Chinese sportswear market, instead of facing just the distributors previously, we learned the importance of dealing with the end consumers directly while transforming our business from “Wholesale Model” to “Retail Brand”. Capturing exponential growth in the era of e-commerce, it led us to a path of new retail that has given an exploration to the relationship between shoppers, products, and point of sales.
During the period, ANTA’s online and offline businesses have been continuously developing and in addition to shining results achieved by other brands under our Group, revenue has increased 44.1% to RMB10.55 billion (2017: RMB7.32 billion) and profit attributable to equity shareholders has increased 34.0% to RMB1.94 billion (2017: RMB1.45 billion), both hitting record highs. The gross profit margin of the Group has increased to a record high of 54.3% (2017: 50.6%), while the operating profit margin and the margin of profit attributable to equity shareholders were 25.5% and 18.4%, respectively (2017: 25.9% and 19.8% respectively). Basic earnings per share amounted to RMB72.44 cents (2017: RMB55.98 cents). In terms of the volume sold, the Group has remarkable results by selling 32 million pairs of shoes and 56 million of apparel during the period.
Consumer Centric and “New-retail” Transition
With innovation in our DNA, we will continue to be agile and adapt to the marketplace as we transform ourselves into a “new retailer”. While delivering our multi-brand strategy, we also leverage technology in product design, retail and inventory management, store optimization, membership and employee management, among other areas, to upgrade and improve customer experience of all the brands across the board. More importantly, our innovation is based on the needs from consumers. In 2005, we set up the first Athletics Science Laboratory in China’s sportswear industry. ANTA’s self-developed technologies including A-Jelly, Super Flexi and A-Loop, etc. have been key components of some of the most popular products.
The year of 2018 will be the year of “Innovation Unleashed and Delivering on our Multi-brand Strategy”. During the period, we have continued to restructure our internal systems and processes to improve efficiency in logistics, as well as to strengthen our collaboration in the research and development of material and technology with external partners. Using international brands as our benchmark, we are upgrading our brands and build up our capabilities in innovation. With the goal of representing “Made in China” brands to the world, we will start by becoming the favorite “Made in China” brand in China first.
Delivering on our “Single-Focus, Multi-Brand and Omni-Channel” Strategy and Integrating Resources for Globalization
We are dedicated to the mission of becoming a company that can lead China’s sports industry to new heights, representing the “Made in China” brand with its global standards and vision on the international stage. To enhance the influence in the global market, Chinese brands must go beyond winning on low price; they must compete on quality, value and brand, and ultimately on innovation. This will be the new – but also the only – road to the world. At the PyeongChang 2018 Olympic Winter Games, ANTA supported the Chinese national teams to compete in the Olympic games. Through the Olympic platform, we showcased ANTA’s culture globally, building a stepping stone for our internationalization strategy. Looking ahead, in order to become a true “Great Brand”, ANTA must build up our capacity to innovate to ensure that we can rival international brands. We must be brave and daring when it comes to being creative and innovative, so that we can create and produce sportswear products with value for money and the highest international standards, transforming ANTA from “the brand you can buy” to “the brand you want to buy”.
Meanwhile, we will continue to perfect the execution of our multi-brand strategy through FILA, DESCENTE, SPRANDI, KOLON SPORT and KINGKOW, the new additions to our brand portfolio in recent years. These additional brands will continue to realize the synergies among our various distribution and sales channels, generating additional market share within their target segments.
I always believe that we are a company with dreams! Riding on our strong execution skill and “ Keep Moving” spirit, it will definitely deliver us to another ten years, and more, of glory, which ultimately turn the Group into a global sportswear company.
On behalf of the Board, I sincerely thank all shareholders for their long-term support, and our staff whose contributions have been invaluable. Going forward, we will continue to focus on delivering sustainable growth for our suppliers and partners, distributors and franchisees, as well as increase returns for our shareholders.
Ding Shizhong Chairman Hong Kong, 14 August 2018