First Shanghai: Maintain Anta Sports Buy Rating

In the two quarter of the latest 15 years, the order will achieve double-digit growth for three consecutive quarters (mainly increments, and ASP is basically flat).

The growth of the same store growth of Anta's main brand products has dropped to the highest number of units.

Benefiting from the Asian Games, sales revenue continued to grow in the three quarter, while channel sales remained at 4-5 months, and retail discounts remained above 30 percent off.

Fila and children's business also maintained a good growth momentum. It is expected that Fila will achieve profitability this year and will continue to maintain a total number of 500 stores in the end of the year.

This is the first time that the company has worked with NBA to become its NBA official market partner and NBA authorisation company. It is also the first time that NBA has launched a joint venture with China sports products company.

Products.

Under the agreement, Anta can design, produce and sell basketball shoes and accessories with NBA and 30 Logo teams.

Basketball is one of the most popular sports at home and abroad. NBA, as the most influential tournament in the world, has a large number of fans and charisma in China. This cooperation can not only increase revenue growth, but also further enhance Anta brand value, bring about the effect of cross selling with other products, and continue to consolidate its leading position in the industry.

Double "eleven" promotion to boost sales growth

"Double eleven" has become the shopping Carnival of large-scale discount sales promotion activities. Last year, the "double eleven" Alibaba completed 350 billion billion trading volume. This year is the first "double eleven" after the listing of Alibaba, and Alibaba must be more innovative.

Anta will benefit from the growth in the sales volume of "double eleven", but considering the limited inventory of the company, there will not be excessive sales, which will affect the profit margin.

The reduction of large shareholders causes short-term adverse effects of stock prices.

The largest shareholder recently placed 70 million shares, placing a price of HK $16.32, a discount of 8.2% compared to the closing price of the previous day, totaling 11.4 HK $100 million, and the cumulative decline of the company's stock price reached 14.6% after placing the shares. We believe that the rationing does not affect the Fundamentals of the company, and short term share price pressure provides a good opportunity for entry.

Adjust target price HK $17.6, maintain buy rating

In order to reflect the positive impact of NBA cooperation, we raised the earnings per share in 2014-2016 years by 2%/3%/5% respectively.

The target price of the company in the next 12 months will be HK $17.6, which is 15.9% higher than the current price. It will maintain the buy rating for earnings per share of 18 times earnings per share in 2015.

Important risk

1) foreign brands added to the industry competition, 2) the growth rate of Fila self operated retail business may not be as good as expected 3.

4) the effect of NBA cooperation with China may be less than expected.