ANTA Sports Announces 2008 Annual Results
Keep Moving Keep Growing - Impressive Growth Boosted by Strong Brand Recognition and Effective Distribution Network
(2 March 2009, Hong Kong) ANTA Sports Products Limited ("ANTA Sports" or the "Group", stock code: 2020) is pleased to announce the audited financial results of the Group for the year ended 31 December 2008 ("2008").
*Certain comparative figures have been restated as a result of the separate presentation of information of the discontinued operations. The results of continuing operations for the year ended 31 December 2007 represented the performance of ANTA branded business.
Following the success of 2007, the Group achieved strong growth during the year under review. In 2008, the Group's turnover recorded an impressive growth to RMB4,626.8 million, representing a surge of 54.8% compared to the previous year. Profit attributable to shareholders achieved a 66.4% year-on-year growth and reached RMB 894.8 million. Basic EPS was RMB 35.9 cents, an increase of 42.3% over 2007.
The Group's enhanced brand image and product mix, as well as effective cost control resulted in its gross profit margin surged to 40.0% -- an increase of 6.5 percentage points. Operating profit margin increased to 20.1%, a growth of 4.1 percentage points. Net profit margin grew 1.3 percentage points to 19.3%. The Group maintained a solid financial position. Cash and bank deposits reached RMB3.49 billion and cash generated from operations was RMB1.016 billion for the year.
The Board proposed a final dividend of HK10.0 cents per share and a special dividend of HK8.0 cents per share, together with an interim dividend of HK10.0 cents per share, making a total payout ratio of 68.6% of the profit for the year.
"ANTA has achieved remarkable performance in 2008. In May 2008, we opened the 5,000th ANTA store in China, which is a key milestone in growing the retail network. Our market leading position is also reaffirmed by our dedicated focus in strengthening R&D and product design capabilities to develop professional and quality sportswear," said Mr. Ding Shizhong, Chairman and CEO of ANTA Sports. "Thanks to those achievements, the Group has a leading position in the market share and has led in the "composite index on market share of sports footwear" in China rated by the China General Chamber of Commerce and the China National Commercial Information Centre for seven consecutive years." He added.
In 2008, the Group dedicated itself to strengthening sponsorship resources in order to accentuate brand differentiability. Expenditure on advertising and marketing represented 13.6% of the turnover, compared to 12.4% in 2007.
Significant expansion of sponsorship resources
Since 2004, the Group has been the sole sponsor of equipment and gear for CBA. In 2008, in an effort to enhance basketball sponsorship, the Group endorsed two international players, Luis Scola and Steve Francis. Reaching out beyond just basketball, the Group sponsored various popular sporting activities in China, including table tennis, volleyball and the marathon.
Further strengthening of extensive distribution network
The Group continues to maintain its leading presence in second and third-tier cities. The following table shows the development of distribution network for ANTA brand (excluding Kids sportswear and trendy sneaker series):
Enhanced R&D and production capabilities
In 2008, the Group upgraded "A-Cozel" to "A-Cozel II" with improved shock-resistant capabilities on shoe soles. "A-Cozel" has been applied to the "Hydrogen Running Shoes" with weights only 180 grams, the CBA designated shoes and other basketball shoes. In addition, the Group also introduced more than 2,200 new footwear styles, 2,500 new apparel styles and 2,000 new accessory styles throughout the year. Footwear production line was increased to 23 at the end of the year, from 15 at the end of 2007.
Despite the shadow of weakening of economic growth in China, the Group still sees enormous potential in the sportswear market.
New product series for strong market penetration
The Group will enhance its brand equity, strengthen its R&D capabilities and expand its distribution network. Tennis, an increasingly popular sport in China, will be one of the focuses for the Group in the coming year. The Group will also continue to develop the Kids sportswear series as well as the trendy sneaker series.
Strategic sponsorships and partnerships
In January 2009, the Group signed an endorsement contract with Jelena Jankovic, one of the world's top tennis players. This will help strengthening the group's sponsorship resources and its exposure in the international market. Jankovic's dedicated tennis sportswear line, the "Jelena Jankovic" series will be launched in the second half of 2009.
The Group is also looking to endorse other potential Chinese and international athletes, and to cooperate with sports associations.
Further expansion of distribution network
The Group aims to increase the number of prime-location stores in key markets and further enhance the image and size of stores. ANTA sportswear products, including the trendy sneaker and Kids sportswear series, will be launched in selected regions with increasing spending power and growth potential.
Long-term investment in R&D
The Group will continue to enhance R&D capabilities and closely collaborate with international and locally-renowned design and R&D institutions. Resources will also be allocated to R&D functions at the Product R&D Centre and the Sports Science Laboratory.
Mr. Ding Shizong said, "Looking ahead, we will continue to embrace the "Keep Moving" spirit, by striving to strengthen our branding strategy and R&D capabilities, as well as enhancing the professionalism and desirability of the ANTA brand to create greater value for the Group and our shareholders."
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About ANTA Sports Products Limited
As one of the leading branded sportswear enterprises in China, ANTA Sports Products Limited primarily designs, develops, manufactures and markets sportswear, including sports footwear, apparel and accessories. The Group has established extensive distribution network and nationwide retail outlets in China under the management of the distributors. The Group places great emphasis on branding by integrating the resources from sports leagues' sponsorships, placement of advertisements, interaction with consumers through internet and endorsement of elite athletes with the featured products to enhance product differentiation. For the past seven years, its footwear has been enjoying a leading position in the composite index on market shares in China.
For further information, please contact:
Hill & Knowlton Asia Limited
Tel: (852) 2894 6239 / 9652 9002
Tel: (852) 2894 6251 / 9050 5406