Anta Sports ap­parel maker seeks in­ter­na­tional M&A

China Daily (USA) - - BUSINESS - By BLOOMBERG

Anta Sports Prod­ucts Ltd, China’s largest ath­let­ics ap­parel com­pany, said it is seek­ing to buy in­ter­na­tional sports­wear brands as the coun­try’s grow­ing mid­dle class be­comes more health­con­scious and phys­i­cally ac­tive.

The com­pany is look­ing for brands with “history” to com­ple­ment its own of­fer­ing, Chief Fi­nan­cial Of­fi­cer Jim Lam said in an in­ter­view in Hong Kong on Mon­day. “Anta’s brand is fa­mous enough in China’s mass mar­ket, so we are more in­ter­ested in ac­quir­ing higher-end brands.”

China’s sports­wear in­dus­try is see­ing a boom even as the econ­omy slows as more Chi­nese en­gage in sports. Anta, which has a mar­ket value of about HK$49 bil­lion ($6.3 bil­lion), formed a joint ven­ture with Des­cente Ltd and Itochu Corp ear­lier this year to des­ig­nand­sel­lDes­cente-branded items in China.

Anta is ex­pected “to main­tain solid growth mo­men­tum” af­ter its re­sults beat es­ti­mates, ICBC In­ter­na­tional Re­search Ltd an­a­lyst Yixin Luo wrote in a note on Tues­day. The an­a­lyst main­tained a “buy” rec­om­men­da­tion and raised the stock’s price tar­get to HK$21.30 from HK$20.80.

The shares rose as much as 8.3 per­cent to HK$21.20 in Hong Kong trad­ing on Tues­day, reach­ing the high­est level since April. The bench­markHang Seng Index rose 1 per­cent.

Anta ac­quired the rights to the nearly cen­tury-old pre­mium sports­wear brand Fila in 2009, and sales from those prod­ucts have grown more than 30 per­cent each year, Lam said. The com­pany plans to open five to 10 Des­cente stores by the end of the year, and an­other 40 to 50 in China in 2017, he added.

The ac­quired brands are ex­pected to con­trib­ute more than30per­cent of Anta’s to­tal sales by 2020, Chair­man and Chief Ex­ec­u­tive Of­fi­cer Ding Shizhong said dur­ing a postre­sult brief­ing onMon­day.

Anta re­ported first-half profit in­creased 17 per­cent to 1.13 bil­lion yuan ($170 mil­lion), ex­ceed­ing an­a­lysts’ ex­pec­ta­tions of 1.11 bil­lion yuan. Sales in­creased al­most 20 per­cent.

Anta, the com­pany’s self­owned brand, will con­tinue to fo­cus on the lower-priced seg­ment since more than 90 per­cent of the com­pany’s rev­enue comes from con­sumers liv­ing out­side of ma­jor Chi­nese ci­ties, Lam­said.

mar­ket value of Anta Sports Prod­ucts Ltd

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