ANTA Sports Announces 2020 Interim Results
High-Quality Growth Maintained, Despite of the Pandemic Impact
Hong Kong, 25 August, 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, announced the Group’s unaudited interim results for the six months ended 30 June 2020 (the “period”).
- Despite the impact of COVID-19, the Group’s revenue decreased slightly by just 1.0% YoY to RMB14.67 billion. The revenue of ANTA Brand merely declined by 10.7% YoY to RMB6.78 billion while FILA maintained its revenue growth, increasing 9.4% YoY to RMB7.15 billion.
- The Group’s gross profit margin increased by 0.7 percentage points YoY to 56.8%, reaching a historical high.
- By adopting “All-Staff Retail” system, the Group countered the impact from COVID-19 on its offline stores with fast growth in online business.
- Led by the strong growth of DESCENTE, the revenue of the Group’s all other brands combined increased 8.3% YoY to RMB740 million with gross profit margin increasing significantly by 5.4 percentage points YoY to 64.5%. Its operating profit has turned into a profit from a loss, reflecting the best practice of synergistic incubation.
- Without the effect of share of loss of a joint venture, the profit attributable to equity shareholders decreased by just 20.1% YoY to RMB2.38 billion, with the effect of share of loss of a joint venture, the profit attributable to equity shareholders decreased by 28.6% YoY to RMB1.66 billion.
- Interim dividend is HK21 cents per ordinary share, or a distribution of 31.1% of the current period’s profit attributable to equity shareholders, maintaining a stable dividend payout ratio.
- As at 30 June 2020, the Group’s net cash generated from operating activities was RMB2.40 billion, and free cash inflow was RMB1.9 billion. Moreover, the Group’s total amount of cash and cash equivalents, fixed deposits held at banks with maturity over three months, and pledged deposits has reached RMB21.56 billion. Although the industry has been impacted by COVID-19, the Group still recorded stable and healthy cash flows, with sufficient cash on hand, and as such, has sufficient risk resistance capacity.
- The total number of ANTA stores (including ANTA KIDS standalone stores) in Mainland China and foreign countries stood at 10,197 (end of 2019: 10,516). The total number of FILA stores (including FILA KIDS and FILA FUSION standalone stores) in Mainland China, Hong Kong, Macao and Singapore reached 1,930 (end of 2019: 1,951). The total number of DESCENTE stores in Mainland China reached 145 (end of 2019: 136). The total number of KOLON SPORT stores reached 155 in Mainland China and Hong Kong (end of 2019: 185). The sales network of the Group continued to improve, helping to expand its brand awareness and promoting the Group’s sustainable development.
- ANTA and ANTA KIDS
- During the period, as the official sportswear partner of the COC, we maintained our support for Chinese athletes. We sponsored 27 Chinese national teams in winter sports, boxing, taekwondo, gymnastics, weightlifting, wrestling, judo, surfing, water polo, golf, etc. In January, the research laboratory for uniform and equipment for the Beijing 2022 Olympic and Paralympic Winter Games was officially opened. The opening of the laboratory led the preparation for the Winter Olympics staff uniform to a sprint stage. ANTA collaborated with the Beijing Institute of Fashion Technology and actively participated in the R&D and production of uniforms and equipment. Through a series of winter sporting competitions and Olympic testing events, we continuously reviewed the uniforms and equipment, which optimized and improved product performance, and ensured comprehensive and reliable uniform and equipment support are being provided for the Beijing 2022 Olympic and Paralympic Winter Games.
- In January, we kept up with the momentum of our collaboration with the Palace Museum by launching specialized products incorporating auspicious elements of Chinese New Year and the Palace Museum. ANTA also launched recyclable Dominance running shoes for the first time. In addition, the year 2020 marks a new era of Mars exploration. With this as inspiration, ANTA and NASA jointly launched the ANTA NASA A-CORE crossover running shoes. Using a new generation of A-FLASHFOAM material, the cushioning effect was better for running.
- In terms of basketball, ANTA continues to partner with ANTA basketball endorsers, namely Klay Thompson, Gordon Hayward, etc. During the period, ANTA held the “Shock the Game Basketball Tournament” in several cities including Guangzhou, Nanjing and Shanghai, in which professional basketball players were invited to participate in basketball competitions. In addition, we have launched a series of signature basketball shoes. Included the new colorways of GH1 and KT5 series, which had strengthened ANTA’s reputation in the basketball market.
- In April, ANTA upgraded the Hydrogen Running Shoes to version 2.0, which was equipped with FLASHLITE 2.0 ANTA Hydrogen Technology, in order to provide advanced support, breathability and abrasion resistance. Hydrogen Running Shoes 2.0 was extremely light weight and the sole came with additional non-slip rubber for improved grip, which effectively eliminated wrinkling and extended the life of the running shoes. The weight of ANTA’s ultra-light sports air windbreaker was just 29.8 grams. The product was made of ultra-light nylon fibre, which had excellent waterproof properties and breathability.
- Moreover, ANTA launched a crossover series with Sprite, which included footwear and apparel. With simple and casual designs, as well as popular elements from Sprite, the series aims to provide consumers with the cool, refreshing vibe associated with drinking Sprite on a hot summer day. Other sports footwear included ANTA National Tide Series in Tribute to Li Bai, the Dragon Ball Super series and the Jason Freeny x ANTA Running series. They were also popular among consumers and have been sold exceptionally well.
- In recent years, ANTA KIDS has been aiming to incorporate more of a “Fun” elements in the kids’ growing journey through an integrated experience. In doing so, ANTA KIDS has successfully enhanced the desirability of its products among consumers and built professional sportswear products. It has secured a dominant position in the market, and hopes to seize even bigger market opportunities in the future.
- During the period, the famous mixed-race child model, Ella Gross, officially became the new generation of ANTA KIDS’ endorsers, along with Zhang Yuexuan (Tian Tian), son of model Zhang Liang. They continued to encourage children to release their fun and energy and lead the future. During the period, we launched the enigmatic Black Panther crossover series “Panther Equipment”, which broke fashion boundaries.
- In June, ANTA Sports and the late legendary artist, Keith Haring’s foundation launched a crossover series of products with a unique street graffiti style. The collection was colorful and bold, speaking to the idea of summer, and radiated the innocence of children. The red heart by Keith Haring was a wellness blessing to children and a perfect interpretation of street trends. At the same time, ANTA KIDS’ first “Fun Sports Day” theme store in Yunnan opened. It continued to carry the spirit of “Fun” during the Pandemic and encouraged children to unleash their sporting talents; the sports accessories in the store could inspire children’s enthusiasm, triggered their imaginations and encouraged them to actively tackle challenges.
- FILA, FILA KIDS and FILA FUSION
- In addition to series like FILA WHITE, FILA BLUE and FILA ORIGINALE, we continued to work with the distinguished fashion designer Phillip Lim on the FILA X 3.1 Phillip Lim Puzzle series, which is leading the trend in high-end sportswear. With FILA becoming a cornerstone of the Chinese market, accompanied by its celebrity endorsers, Gao Yuanyuan, Huang Jingyu and Wu Jinyan, the brand launched a range of collections throughout the year that expressed the brand’s fashion philosophy while adapting to current trends and adding unique elements to its collections.
- FILA has launched a new series called FILA ORIGINALE, combining vintage and street elements to enhance the brand’s young and lively Italian style. FILA also launched a new series called FILA MODERN HERITAGE, using jacquard and luminous, mirage fabric, and water-soluble fabrics to create a ‘mix and match’ style.
- The FILA ATHLETICS YOGA collection gradually penetrated the yoga apparel market with functional designs and high-quality fabrics. The collection also launched a “Refreshing Cross Training Series”, which is equipped with elastic, quick dry and Z-FIT functions. FILA also arranged a live exercise session with celebrity Carman Lee.
- The MIND ONE 2.0 series was re-launched in a new season with adding a vintage fashion element targeted at setting sportswear fashion trends and becoming a must-have item for fashion hipsters.
- FILA KIDS has launched new collections of kidswear, including the new series FILA KIDS PERFORMANCE RUNNING, which allows kids to exercise in comfort. We believe that FILA KIDS will maintain its growth momentum and make a significant contribution to FILA’s overall sales.
- FILA FUSION established its own stores in 2017, with famous Japanese model Koki being FILA FUSION’s brand ambassador, marking its proper entry into the market for youths aged between 15 and 25. FILA FUSION is characterized by its style that blends youth, sunshine and trendy sports, and has launched crossover collections with multiple international renowned brands based on their unique styles, which have been warmly received by the market. FILA FUSION successfully further enhanced its brand image and recognition in the market.
- Since 2016, we have exclusively operated DESCENTE in Mainland China. In the past three years, with over 80 years of brand history, DESCENTE has swiftly established its position in China’s market as a functional and professional sportswear brand. We will continue to actively expand DESCENTE’s retail market share in China’s high-end sportswear market.
- During the period, DESCENTE cooperated with internationally renowned movie star Daniel Wu, famous Chinese actress Xin Zhilei and golf athlete Li Haotong to promote the brand’s most popular product series, including ALLTERRAIN and MOTION KNIT.
- In addition, DESCENTE promoted the spirit of challenge in sports with the slogan “DARE TO MOVE”.
- With the preparations for the Beijing 2022 Olympic and Paralympic Winter Games well underway, winter sports in China have been attracting worldwide attention. Under such favorable conditions, DESCENTE is focusing on the fast-growing winter sports market with its pioneering advantages and striving to seize huge business opportunities in winter sportswear, thus becoming one of the most successful sports brands in China prior to the Beijing 2022 Olympic and Paralympic Winter Games.
Looking ahead, never surrendering to the pandemic, overcoming difficulties and turning them into opportunities with resilience
- In the first half of 2020, the pandemic gradually came under control in China, with social and economic orders progressively restored. However, in some other countries and regions, the pandemic re-emerged, bringing back social distancing measures in order to contain and limit its spread. It is very likely that in the foreseeable future, the pandemic prevention and control will be normalized after the resumption of work, while the global economy will face many challenges.
- With economic and social recovery now in motion, the sports industry is re-entering people’s lives in a brand-new form. Although the pandemic is temporary, it will allow the sports and health industries to unleash the potential of long-term development, creating a historic opportunity for the industry and enterprises to reform and innovate.
- Against the crisis, an outstanding deficiency should be actively reviewing its own problems and accurately identifying where it falls short. It will also fearlessly exercise necessary reforms and grasp any new opportunities. Particularly, during sudden black swan events, an enterprise needs to adjust its operational direction in a timely manner, making swift changes and adopt dynamic management approach. Since the start of the COVID-19 outbreak in late January, we swiftly developed contingency plans and adopted proper measures. All of our employees proactively made qualitative change through being proactive. Looking forward to the second half of the year, we will continue to prepare for the long-term battle, while at the same time maintain our value. We will uphold our responsibility to our employees, the society and consumers, taking initiatives to promote necessary changes.
- The post-COVID-19 era creates opportunities or long-term change in economic status and consumption habits, giving enterprises impetus to redefine the concept of “Customers, Products and Channels”. However, the consumer-centric approach remains the only core element that will never change amid such reforms. Consumers expect to enjoy better consumption experiences, integrating online and offline channels, which creates a faster and more convenient experience and service. We will continue to make consumers our top priority, utilizing digitalization and the membership system to study the consumer matrix and their demands, which will accelerate our connection with different positioned target audiences. We will adopt various measures to enhance our communication with consumers, analyzing consumers’ characteristics in detail, including their price sensitivity, age, preferences and so on. This will be helpful to profile our customers, which allow us to create consumer experiences that are more closely integrated with what consumers want and need.
Ding Shizhong, Chairman and CEO of ANTA Sports, said, “The year 2020 is unlike any others. As a result, we needed to dig into the essence of the company by focusing on “consumer” demands, in order to accelerate our “Customers, Products and Channels” reform to achieve consumer orientation by enhancing our product power, brand power and retail power. We also needed to thoroughly understand the changes in consumer demands and behaviors to continuously improve our products. We regularly examined, reviewed, and fine tuned our strategies. For instance, we used the integrated wholesale and retail omni-channel model and digitalization to improve our brand experience and interact with consumers. Despite the severe challenges, ANTA Sports, as a leading corporation in the sportswear industry in China, had the confidence and capability to triumph through the difficulties with a fearless spirit. This attitude showcased our ‘Keep Moving‘ spirit.”
For more 2020 Interim Results-related documents and information about the Company, please visit our investor relations website http://ir.anta.com, follow our Twitter account@AntaInsight or visit our YouTube channel, ANTA Insight.
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. Its “Single-Focus, Multi-Brand, Omni-Channel” strategy has been fully implemented in recent years, with a focus on China’s sportswear market. By embracing an all-round brand portfolio including ANTA, FILA, DESCENTE, SPRANDI, KINGKOW, and KOLON SPORT, and by setting up an investor consortium to successfully acquire Amer Sports Corporation in 2019, a Finnish sportswear group that has internationally-recognized brands including Salomon, Arc’teryx, Peak Performance, Atomic, Suunto, Wilson and Precor etc. ANTA Sports aims to unlock the potential of both the mass and high-end sportswear markets.
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For further information, please contact:
ANTA Sports Products Limited
Investor Relations Department
Tel: (852) 2116-1660
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Citigate Dewe Rogerson
Linda Pui / Samuel Xiao
Tel: (852) 3103-0118/ (852) 3103-0128