ANTA's net profit increased by 40% last year, with the revenue of its main brand surpassing the 30 billion mark. The stock rose by over 4% after the performance report | Financial Report Insights

On Tuesday, March 26, Anta Sports announced its 2023 annual report.

The financial report shows that Anta Group's annual revenue reached 62.356 billion yuan last year, exceeding the market's expectation of 62 billion yuan, with a year-on-year growth of 16.2%, reaching a new historical high. Excluding the impact of joint venture company profits and losses, the net profit was 10.954 billion yuan, a year-on-year increase of 44.9%; including the impact of joint venture company profits and losses, the net profit was 10.236 billion yuan, a year-on-year increase of 34.9%. The company's gross profit margin was 62.6%, exceeding the market's expectation of 61.8% and the 60.2% of the same period in 2022.

The company plans to distribute HKD 1.15 per share at the end of the 2023 fiscal year, with a full-year dividend payout ratio of 50.7% of net profit, surpassing 44.3% in 2022.

As of the time of writing, Anta's stock price has risen by over 4%.

The main brand's revenue exceeded 30 billion yuan, while the combined revenue of other brands increased by nearly 60%.

In 2023, Anta's revenue reached a new historical high, growing by 16.2% to 62.36 billion yuan, establishing a leading position for Chinese sports brands. The overall gross profit margin and operating profit margin showed significant improvements compared to 2022, with the overall gross profit margin increasing by 2.4 percentage points to 62.6%, further improving operational efficiency, and the overall operating profit margin increasing by 3.7 percentage points to 24.6%. Based on a comprehensive benchmark, Anta's net profit last year, including the share of joint venture company profits and losses, exceeded 10 billion yuan for the first time, a significant increase of 34.9% to 10.24 billion yuan.

Looking at each brand, Anta's main brand revenue was 30.306 billion yuan, a year-on-year increase of 9.3%; the operating profit margin was 22.2%, an increase of 0.8 percentage points year-on-year, becoming the first domestic sports brand to exceed 30 billion yuan in revenue.

FILA brand revenue increased by 16.6% year-on-year to 25.103 billion yuan, with the operating profit margin increasing by 7.6 percentage points to 27.6% year-on-year. The brand launched the "Lighthouse Plan" to seek brand elevation, with multiple operational indicators surpassing business targets. E-commerce sales performed well, achieving historic breakthroughs in live streaming and social platforms, and significant growth in professional sports and footwear sales All other brands collectively saw a significant increase in revenue by 57.7% to RMB 6.95 billion, with a gross profit margin of 72.9%. The operating profit margin rose by 6.5 percentage points year-on-year to 27.1%, maintaining a high-speed growth momentum.

The joint venture company Amer Sports (including brands such as Salomon, Wilson, Peak Performance, and Atomic) saw a year-on-year revenue growth of 30.1% to RMB 31.248 billion. Profitability at the operational level increased, with EBITDA growing significantly by 45.4% to RMB 3.745 billion.

Inventory Balance Reduction, Financial Stability, and Ample Net Cash

By establishing multiple inventory operation standards, managing the entire product lifecycle from procurement to sales, Anta reduced its average inventory turnover days by 15 days, a decrease of nearly 11%. The inventory balance further decreased compared to the end of 2022, demonstrating the recovery of the retail market and Anta's ability to degrade off-season inventory.

Furthermore, thanks to optimized accounts receivable management and the transformation to a DTC model, Anta's average accounts receivable turnover days decreased by 1 day compared to 2022, while average accounts payable turnover days decreased by 3 days, with turnover ratios at a healthy level.

In 2023, Anta Group's financial position remains robust, with strong cash generation capability and ample net cash. Operating cash inflow amounted to RMB 19.63 billion, and free cash flow reached RMB 17.82 billion.

As of the end of the reporting period, Anta held a total of RMB 48.52 billion in cash and cash equivalents, bank time deposits exceeding three months, and pledged deposits.

For the 2023 performance, Lai Shixian, Executive Director and Co-CEO of Anta Group, stated:

"The Group will steadfastly adhere to the development strategy of 'single focus, multi-brand, globalization', and continue to explore the globalization process with the unique business model of 'brand + retail'. The multi-brand approach aligns with the multi-level and multi-scenario consumer demands in the Chinese sports goods market, and we are confident in the future development prospects of the Chinese market and the company.

As the 2024 Paris Olympics approaches, Chinese athletes will once again wear Anta's jersey to compete on the Olympic stage. We will continue to strengthen the three core competencies of 'multi-brand synergistic management capability', 'multi-brand retail operation capability', and 'global operation and resource integration capability', adhere to a long-term mission-driven approach, focus on creating consumer value through differentiation, steadily move towards becoming the 'world's leading sports goods group', and make Anta a global brand."