ANTA Sports Announces 2009 Interim Results
Healthy Growth Boosted by Strong Brand Equity and Effective Distribution Network
(17 August 2009, Hong Kong) ANTA Sports Products Limited ("ANTA Sports" or the "Group", stock code: 2020) is pleased to announce the interim results of the Group for the six months ended 30 June 2009 (the "period").
Despite the economic recession, the Group managed to deliver a sustained and healthy growth during the period. For the six months ended 30 June 2009, the Group's turnover reached RMB 2.82 billion, representing a 27.7% growth compared to the same period of last year. Profit attributable to shareholders achieved a 40.1% year-on-year growth and reached RMB 608.3 million. Basic earnings per share was RMB 24.43 cents, an increase of 40.1% over last year.
The Group's enhanced brand equity and product offering resulted in its gross profit margin improving to 41.5%, an increase of 2.6 percentage points. Operating profit margin increased by 5.2% points to 24.2 %. Net profit margin grew 1.9% points to 21.6%.
The Group maintained a solid financial position with strong free cash inflow of over RMB537.3 million during the period.
In view of the satisfactory performance, the Board proposed an interim dividend of HK12 cents per share (2008 1H: HK10 cents), making a dividend payout ratio of 43.3% of the profit for the first half of 2009.
"ANTA has achieved remarkable performance and satisfactory growth during the period amid the challenging environment. At 30 June 2009, our network comprised of 6,129 ANTA stores and 10 flagship stores in China, with 462 ANTA stores added to our retail network during the period. Moreover, the Group is honoured to become the strategic partner of COC. This privilege will further cement our leading position in the Chinese sportswear industry." said Mr. Ding Shizhong, Chairman and CEO of ANTA Sports.
Strengthen professional image of ANTA brand
To further strengthen professional image in the performance-based sportswear market and enhance brand differentiation, the Group strategically focuses on sponsoring elite athletes, popular sports leagues and influential sports associations. The Group endorsed Jelena Jankovic and Zheng Jie, two of the world's leading female tennis players during the period to capture the growing tennis market in China. The Group also entered into a strategic alliance agreement with the COC. In the coming four years, the China Sports Delegation will be wearing sportswear sponsored by ANTA Sports to 11 influential international competitions.
Further expanded the nationwide distribution network
With a leading position in second and third tier cities in China, the Group strategically expanded its retail network in high growth and less penetrated areas during the period. The following table illustrated the expansion of distribution network of the Group:
* The comparative figures of eastern and northern regions have been restated as the Group has strategically moved Henan market from the eastern to the northern region to balance the efforts on market development among the regions.
Enhanced R&D and quality control
The Group constantly invests to foster product quality and differentiation. A blend of local & international talents and institutions facilitate dynamic inspiration. During the period, the Group received the Gold award for "Footwear Design Competition 2009 ?V Professional Category, Sports Leisure Shoes" organised by the China Leather Association. The award recognised our professionalism and creativity in sportswear design. Furthermore, the Group further strengthened quality control procedures and helped suppliers to improve the quality. In addition, the Group strategically optimised the in-house and outsourced production mix. During the period, approximately 35.5% of footwear and 14.8% of apparel sold were produced in-house.
Looking ahead, riding on the increasing domestic demand and fast growing sportswear market, the Group believes that there is enormous growth potential ahead.
Sponsorships and endorsement
The strategic partnership with the COC will help gain brand exposure in China and worldwide. China Sports Delegation will be outfitted by ANTA sportswear at awards ceremonies in Hanoi Asian Indoor Games and Hong Kong East Asian Games which are going to be held in the second half of 2009.
Tennis products will be a key focus of the Group in the coming years. The endorsement of the "Tennis Duo", Jelena Jankovic and Zheng Jie, empowers the Group's drive to raise the popularity of tennis in the domestic market. Endorsers' designated tennis series will be introduced to the mass market in China. Furthermore, the Group is going to sponsor a number of tennis events to nurture future tennis stars in China. The Group will also continue to work closely with existing sponsorship resources and consider sponsoring outstanding athletes in the future.
Diversification of market and product
While ensuring a further penetration in our core markets, the basketball and running segments, the Group will enrich our tennis sportswear products. The Group will also introduce more trendy and personalized products to the Sports Lifestyle series to fulfill demands of young and trendy consumers.
Expansion in distribution network
The Group will further expand and optimise the retail network in the second and third-tier markets. The Group will also dedicate to strengthen its brand presence in cities with high growth potential and continue to enhance the store image.
Enhancement in R&D and Quality Control
The Group will continue to upgrade existing and launch new technologies, and constantly refresh product portfolio to target the latest trends in the market, while imposing a stringent quality control.
"China's economy and domestic demand have gradually recovered since the implementation of stimulus measures. We are optimistic but with added caution when facing the market uncertainties and intensifying competition in the post-Olympic sportswear market. Looking ahead, the Group will leverage our brand equity, strong R&D capabilities, extensive distribution network, and to reinforce our competitive advantages so as to create greater value and return for our shareholders." concluded Mr. Ding.