Anta Sports Products has experienced a significant increase in its shares after announcing a surge in first-half earnings. The Chinese sports-products manufacturer saw its shares rise by 11%, reaching HKD 86.15 (USD 10.99) per share, marking the largest intraday gain since March 2023. Despite this positive development, Anta’s stock is still down by 16% year-to-date.
Anta disclosed on Tuesday, after the market closed, that its net profit for the first half, including the share of profit or loss from a joint venture, rose to CNY 4.75 billion (USD 651.3 million) compared to CNY 3.59 billion in the previous year. Additionally, the company achieved an all-time high gross profit margin of 63%, reflecting a 1.3% increase.
According to a research report by Citigroup, Anta’s net profit exceeded expectations by 5%. The analysts Xiaopo Wei and Vincent Yang from Citi attributed this success to the operating profit margin of Anta’s Fila business, which rose by an impressive 7.2% year-on-year, reaching a record level of 29.7%.
Despite these positive figures, Anta’s management acknowledged weaker-than-expected retail sales in May and June, which persisted into July and August. As a result, management anticipates that Fila’s operating profit margin will normalize to a range of 25%-30% in 2023.
Looking ahead, analysts forecast a significant moderation in the company’s second-half earnings growth compared to the first half due to uncertain topline growth and a lower Ebit margin.