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ANTA Sports Announces 2019 Annual Results

Revenue Reached a New High to close to RMB34 Billion, Strong Revenue Growth of 40% for Two Consecutive Years

Hong Kong, 24 March, 2020 – 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 audited annual results for the year ended 31 December 2019 (the “year”).

Financial Highlights

ANTA Sports Maintains Double-Digit Growth in Revenue and Profit for the Sixth Consecutive Year

  • Revenue increased by 40.8% to RMB33.93 billion, reflecting a strong growth of over 40% for two consecutive years, of which revenue of ANTA brand reached RMB17.45 billion, up 21.8% and revenue of FILA brand reached RMB14.77 billion, up 73.9%.
  • Profit from operations increased by 52.5% to RMB8.69 billion, of which profit from operations of ANTA brand reached RMB4.68 billion, up 26.2% and profit from operations of FILA brand reached RMB4.02 billion, up 87.1%.
  • Profit attributable to equity shareholders was RMB5.34 billion, up 30.3%, reaching a new high and maintaining a growth of 30% or above for three consecutive years.
  • Final dividend is HK36 cents per ordinary share. Total dividends of HK67 cents per ordinary share.


Stable and Healthy Cashflow and Cash Conversion Ability

  • Overall gross profit margin was 55.0%, operating profit margin was 25.6%, margin of profit attributable to equity shareholders was 15.8%.
  • Free cash inflow was RMB6.43 billion.


Strong retail performance

  • The Group has a total of 12,943 stores, among which number of ANTA stores (including ANTA KIDS standalone stores) in Mainland China stood at 10,516, number of FILA stores (including FILA KIDS and FILA FUSION standalone stores) in Mainland China, Hong Kong, Macao and Singapore stood at 1,951 and the number of DESCENTE in Mainland China reached 136.
  • Retail sales (in terms of the retail value) of ANTA and FILA branded products for the full year of 2019 increased by mid-teens and 55-60%, respectively, compared to the same period of 2018.


Operational Highlights

ANTA and ANTA KIDS

  • During the year, as the official sportswear partner of the Chinese Olympic Committee (COC), ANTA continued to support the Chinese athletes. We sponsored 27 Chinese national teams in winter sports, boxing, taekwondo, gymnastics, weightlifting, wrestling, judo, surfing, water polo and golf, among other sports.
  • ANTA launched brand-new “Hydrogen Running Shoes”, Challenge202/2.0 running shoes and “ANTA X Winter Olympic Games” products, attracting more attention from consumers.
  • We also launched the KT5 PRO STARS, the new addition to the range of KT series shoes by renowned NBA player Klay Thompson. With the new A-WEB 3.0 technology that produces vamp with reflective 3M® material, KT5 PRO STARS uses double carbon plates, which complement its midsole with A-Flashfoam tech, bringing the best rebound cushioning experience for players.
  • 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.
  • The products of ANTA KIDS are technology-oriented. In addition to running, soccer, basketball, outdoor and cross-training product series, ANTA KIDS has been enriching its product portfolio with the launch of crossover products featuring various cartoon characters. The cooperation with Marvel and Frozen series have been well-received and acclaimed by the general public.
  • ANTA KIDS officially debuted in the 2020 New York Fashion Week under the theme “Playmaker”, becoming the first Chinese kidswear brand landing at New York Fashion Week.
  • ANTA KIDS not only organized “Fun Sports Day”, but also introduced the 4.0 stores, with the theme of “WILD PARK”. The store was designed based on an inspiration of a skate park. The products focus on professional and trendy sports, as well as babies and kids. Products and store atmosphere were integrated based on the characteristics of kids’ ages and gender.
  • As at 31 December 2019, the total number of ANTA stores (including ANTA KIDS standalone stores) in Mainland China stood at 10,516.


FILA, FILA KIDS and FILA FUSION

  • In addition to series like FILA ATHLETICS, 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.
  • FILA launched its new sportswear collection CLUB ALPINO, FILA MODERN HERITAGE series and FILA ATHLETICS YOGA collection, FILA’s Classic Kicks, Disruptor Sandals, and FILA Jagger series, to continue to demonstrate the classic element of the brand, and become a must-have item for fashion hipsters.
  • FILA became the exclusive and official sportswear partner of the China Tennis Open 2019-2021. Through this cooperation, FILA aims to help cultivate more tennis enthusiasts and players, and fully supports and promotes the development of China’s tennis industry.
  • During the year, FILA KIDS launched a collection of new kidswear, WHITE LINE, which blends winter elements with the characteristics of Italian fashion and aims to lead the winter fashion market. In order to bring in new products, FILA KIDS continued to launch crossover collections, including FILA KIDS X WONNIE FRIENDS, FILA KIDS X STAPLE and FILA KIDS X CHUPA CHUPS.
  • FILA FUSION engaged Japanese model Kōki, as endorser of the brand, marking its official entry into the market for youths aged 15 to 25.
  • As at 31 December 2019, the total number of FILA stores (including FILA KIDS and FILA FUSION standalone stores) in Mainland China, Hong Kong, Macao and Singapore reached 1,951.


DESCENTE

  • DESCENTE collaborated with internationally renowned movie star Daniel Wu and famous renowned actress Xin Zhilei to promote a number of popular series, of which the ALLTERRAIN and MOTION KNIT series have been particularly popular amongst customers.
  • In addition, DESCENTE became an exclusive official apparel sponsor of WGC-HSBC Champions, the Golf as 'Asia's Major'. DESCENTE provided official staff members with quality garment, leading to widespread brand recognition and extensive attention from high-end consumer groups.
  • As at 31 December 2019, the total number of DESCENTE in Mainland China reached 136.


Omni-Channel Management, Improving Retail Management Capabilities

  • We have optimized our retail management capability while enhancing our retail channels in China, including street stores, shopping malls, department stores, outlet stores and e-commerce platforms. On the other hand, based on the characteristics of different brands and stores, we have made more detailed settings with differentiated packages and prices tailored to that specific setting, and manage them all differently.
  • With a consumer-centric and retail-oriented strategy, we have successfully improved our retailers’ competitiveness, store efficiency and responsiveness to the ever-changing market. During the year under review, we continued to work closely with our retailers to optimize our retail management capability. Also, by obtaining real-time sales performance of all our retail stores, we were able to create a comprehensive plan for logistics routes, which helped shorten delivery times and increase flexibility in stock replenishment, and as a result improve overall business performance.


Remarkable growth in e-commerce, solidifying ANTA’s leading position in the industry

  • In response to hot online topics, we launched a number of crossover products, including popular IP products storylines, such as the brand-new ANTA NASA series, Huang Jingyu FILA series and Daniel Wu DESCENTE products. These IP products with storylines continue to generate topics online.
  • We have strengthened the collaboration with various renowned e-commerce platforms, including Tmall, JD, Vipshop etc., to further boost the performance of our e-commerce business.
  • During the year, we launched a few hundred live streaming events, which attracted consumers to chat and buy while watching the demonstrations and displays of anchors, as well as live interaction between the anchors and fans.
  • By standardizing all our online product, launch schedules, priorities and styles, we promoted synergy among our online and offline retailers.
  • We provide comprehensive customer services, including secure payment systems, a well-established supply chain, fast and reliable delivery services, VIP membership, and product return guarantees. We believe that positive feedback from our customers will help us to establish good reputation.


Taking Prompt and Determined Measures to Tackle the Covid-19 Outbreak, Minimizing Potential Risks

  • Although the Pandemic will inevitably affect the financial performance of the industry and us in the first half of 2020, by the second half of 2020 at the earliest, the situation is expected to return to normal.
  • Since the early stage of the Pandemic outbreak, we have already communicated with distributors to follow closely their sales performance, to review their trade fair orders made in coming quarters in light of the actual situation as well as to take appropriate measures to minimize any potential risk.
  • We believe that as the industry leader, the Group has the risk resistance capacity and proven track record, hence, the impact of the Pandemic to us is controllable.
  • As a market leader, we always uphold our values and responsibilities to our staff, the society, and consumers. We have made the best of our strong execution power and managerial capability to adopt various methods to tackle the Pandemic. We also launched a brand-new online marketing model by leveraging our brand endorsers and endorsed athletes to record short videos on sports, widely promoting indoor sports for consumers and interacting with them. Meanwhile, we not only drove sales performance in our e-commerce channel, but also stimulated the Company’s different teams to proactively keep in touch with consumers and better understand their demands. This was helpful in our formulation of future strategic ideologies and ways of conducting our business, pushing the team to pave a path of innovation through the crisis.


Looking Ahead, Reaffirming Confidence to Overcoming Current Difficulties Together, Paving the Way for Globalization

  • The year of 2020 is rife with challenges, with black-swan events such as the trade war and novel coronavirus epidemic expected to impact the Chinese and global economy. Amid uncertainties, we must seek chances for high-quality growth in order to mitigate the risks and turn them into opportunities. With innovation supporting us, we will “Re-construct” our organization and business models. We are confident that this year, we will unfurl a brand-new chapter of more glory moments.
  • Last year, investor consortium acquired Amer Sports, and quickly compiled its future growth plan. We will work with other investors of the consortium and management to accelerate the development of Amer Sports. We see this as the path towards globalization, as well as the path towards victory. We will also establish our global retail headquarters in Shanghai to accelerate the pace of globalization.
  • By the end of 2020, we will optimize the number of ANTA stores and improve store quality. We expect the total number of ANTA stores (including ANTA KIDS standalone stores) in Mainland China to reach 10,200-10,300, and the total number of FILA stores (including FILA KIDS and FILA FUSION standalone stores) in Mainland China, Hong Kong, Macao and Singapore to reach 2,000-2,100. Meanwhile, DESCENTE is expected to have 160-170 stores in Mainland China.


Ding Shizhong, Chairman and CEO of ANTA Sports
, said, “The unexpected coronavirus outbreak in 2020 has undoubtedly brought unprecedented challenges to the global consumer market. However, the more challenging it is, the more we should hold on to our core values. Under the ongoing changes in industry and consumer environments, this presents an excellent window for the Group to improve efficiency and carry forward effective reforms. We will reconstruct our mindset around consumer-orientation, believe in long-term development and pursue high-quality growth. We will also uphold the principle of organic business operation to achieve effective management and actively seek opportunities in various crises. In the face of more lurking ‘black swan’ incidents, enterprises should not just rely on prompt and decisive executions, but they should also assess whether their regular operations are reliable and solid. Back in 2012, we were the first among the industry to recover from inventory risk successfully. Our persistence and resilience against risks and swift strategy adjusting ability have been fully validated under environment full of uncertainties. Weathering the inventory crisis helped us to accumulate a lot of practical experiences. The current coronavirus outbreak will push the health and sports industry to the next level and create critical opportunities for reforms and innovation in the industry. We are fully confident about the recovery of the sports market after the epidemic and the Group’s long-term growth. Given the status quo, brands under the Group will join hands together and provide better services in innovative ways for global consumers. Our goal of achieving retail sales value of RMB 200 billion by 2025 remain the same.”

-End-

For more 2019 Annual Results-related documents and information about the Company, please visit our investor relations website http://ir.anta.com.


About ANTA Sports

ANTA brand was established in 1991, while ANTA Sports Products Limited, a leading sportswear company in China, was listed on the Main Board of Hong Kong Stock Exchange in 2007 (Stock code: 2020.HK). For many years, ANTA Sports has been principally engaging in the design, development, manufacturing and marketing of ANTA sportswear series to provide the mass market in China with professional sporting products including footwear, apparel and accessories. By embracing an all-round brand portfolio including ANTA, FILA, DESCENTE, SPRANDI, KINGKOW, and KOLON SPORT, and by seizing every opportunity arising in various important retail channels, ANTA Sports aims to unlock the potential of both
the mass and high-end sportswear markets in China.

IR website: http://ir.anta.com

For further information, please contact:
ANTA Sports Products Limited
Investor Relations Department
Tel: (852) 2116-1660
Fax: (852) 2116-1590
E-mail: ir@anta.com.hk

Citigate Dewe Rogerson
Linda Pui / Samuel Xiao
Tel: (852) 3103 0118/ (852) 3103 0128
Email: AntaSportsIR@citigatedewerogerson.com