Anta Sports delivers strong first-half results

Anta Sports Products Ltd posted strong half-year results underpinned by the strong growth of its fashion sports brand Fila, reorganization efforts to improve efficiency and the booming sports industry in the country.

Anta Group, the world's third-largest sportswear company by revenue, saw revenue increase 40 percent to 14.8 billion yuan ($2.07 billion) and profits increase 58 percent to 4.2 billion yuan in the first six months, according to its half-year financial report, which was released in late August.

Fila's revenue climbed 79.9 percent to 6.54 billion yuan in the first six months, and gross profit grew 79.2 percent to 4.7 billion yuan or 71.5 percent of the company's total revenue, up 10 percentage points compared to last year.

It is the first time that the company has released Fila's key data since its acquisition 10 years ago.

Many have speculated that the revelation was made in response to attacks on the Hong Kong-listed company by short sellers three times in the past year. Most critics have centered on Fila's sharp growing performance. Anta's stock price has risen, from HK$37.15 at the start of the year to close on Monday at HK$63.05, up almost 70 percent this year.

Zheng Jie, president of Anta Group, said the increase in the share price was due to the company's corporate governance and management, which are in accordance with rules for listed companies.

Anta's latest financial report shows that Anta Group has 12,479 stores, of which 10,223 are Anta branded stores and 1,788 are Fila stores.

By the end of 2019, it is expected that the total number of Anta branded stores in China will reach 10,300-10,400, and the total number of Fila stores will reach 1,900-2,000, according to the report. Anta branded products saw revenue reach 7.59 billion yuan, up 18.3 percent in the first six months.

The group is expected to have 130-140 outdoor brand Descente stores in China by the end of 2019.Children's apparel company Kingkow will have a total of 90-100 stores and fashion sports brand Sprandi will have 120-125 stores by the end of 2019, with Kolon Sport having a total of 170-180 stores, according to the report.

While most sports brands performed well in the first half of this year - Lining achieved revenue of 6.2 billion yuan, Xstep 3.4 billion yuan and 361 degrees 3.2 billion yuan - Fila is the market leader.

Innovative marketing has been a key part of Anta's stimulation strategies. In the first half year, Anta partnered with Coca-Cola to launch a number of collaborative footwear, apparel and travel products. Following the Marvel hero series last year, Anta Kids collaborated with Disney's iconic hit animation movie Frozen.

In April, Anta launched its new brand Hydrogen Running Shoes, which weigh a mere 110 grams.

In terms of retail format, Anta has renovated its physical stores. Its multilevel store launched in July in Shanghai spans 2,000 square meters and includes more digitalization, youth and professionalism concepts to appeal to younger consumers.

Zheng said the company has once again exceeded last year's performance, boosted by the growing sports industry that has been fueled by the upcoming 2022 Winter Olympics in Beijing and the Tokyo Olympics in 2020.

Zheng said the operational reorganization earlier this year has seen the company divide its brands into three categories for centralized management - professional, fashion, and outdoor sports.