Investment Summary
We highlight that 1) 2017 results remain robust; inventory level comes back to be normal; non-Anta brands kept high growth; expenses may continue to rise; product innovation may be key driver for future development. We estimate the expenses to go up in future and revise target price to HKD43.68 based on target PE 26x. (Closing price as at 13 Mar 2018)
Business Overview
2017 results kept strong. Anta reported 2017 revenue of RMB16.69bn implying YoY growth of 25%, higher than our previous expectation by 4.23%. Gross profit recorded RMB8.24bn growing by 27.59% YoY. Gross profit margin increased by 1% than 2016 GPM. We see that 2H17 GPM is higher than first half (1H17: 50.57%; 2H17: 48.4%), attributable to raw material price hike in second half. The management expects that in future gross profit margin will be stable.
Graduated from Hong Kong Polytechnic University, Master of Finance (Investment Management). Possess bachelor degree majoring in Financial Management from Southwestern University of Finance and Economics. Focus on industry prospect and corporate fundamentals to explore investment value and cover pharmaceutical and consumer industry.
