HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>1Q25 sales for <a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports Products (2020 HK)</a> continue the trend in 4Q24, with ANTA and FILA brands recording a healthy high-single-digit YoY increase.</li>
<li>With the US-China trade war, the negative impact on consumer appetite is uncertain. It is difficult to project the 2Q-4Q25 revenue and margin outlook. </li>
<li>Its associate, <a href="https://www.smartkarma.com/entities/amer-sports-inc" target="_blank" data-smartkarma-citation="entities:21751:1" rel="noopener">Amer Sports (AS US)</a>, has 36% of revenue from the Americas, while the Jack Wolfskin acquisition has limited contribution. Its 50% premium to sector caps upside.  </li>
</ul>


1Q25 sales for Anta Sports Products (2020 HK) continue the trend in 4Q24, with ANTA and FILA brands recording a healthy high-single-digit YoY increase.
With the US-China trade war, the negative impact on consumer appetite is uncertain. It is difficult to project the 2Q-4Q25 revenue and margin outlook. 
Its associate, Amer Sports (AS US), has 36% of revenue from the Americas, while the Jack Wolfskin acquisition has limited contribution. Its 50% premium to sector caps upside.  


Anta Sports (2020 HK): 1Q25 Stable, yet the Margin Remains Our Concern

<ul>
<li>
<a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports Products (2020 HK)</a>'s strong FY24 result is masked by one-offs and <a href="https://www.smartkarma.com/entities/amer-sports-inc" target="_blank" data-smartkarma-citation="entities:21751:1" rel="noopener">Amer Sports (AS US)</a>. Without them, its earnings would have declined by an alarming 5.4% in 2H24. </li>
<li>Its ANTA and FILA brands have seen YoY operating profit drop in 2H24, with heavy margin pressure. Their revenue growth has also showed meaningful slowdown sequentially.</li>
<li>The 18.6x PER for FY25 is at a 50% premium to the sector, but the market expectation of 15% growth looks challenging. The YTD rally has opened room for profit-taking.</li>
</ul>



Anta Sports Products (2020 HK)'s strong FY24 result is masked by one-offs and Amer Sports (AS US). Without them, its earnings would have declined by an alarming 5.4% in 2H24. 
Its ANTA and FILA brands have seen YoY operating profit drop in 2H24, with heavy margin pressure. Their revenue growth has also showed meaningful slowdown sequentially.
The 18.6x PER for FY25 is at a 50% premium to the sector, but the market expectation of 15% growth looks challenging. The YTD rally has opened room for profit-taking.


Anta Sports (2020 HK): Need to Exercise Caution

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>The FY24 results were inline with BBG estimates and mgmt. guidance and so do the numbers in 2025 YTD.</li><li>Management’s FY25E guidance was quite conservative (slightly faster if we adjust for DTC transformation) and we do concur with them.</li><li>However, thanks to the improved macro (favorable policies) and industry trend, we are still positive on Xtep. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The FY24 results were inline with BBG estimates and mgmt. guidance and so do the numbers in 2025 YTD.Management’s FY25E guidance was quite conservative (slightly faster if we adjust for DTC transformation) and we do concur with them.However, thanks to the improved macro (favorable policies) and industry trend, we are still positive on Xtep. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Xtep (1368 HK) - Building a More All-Round Company in Long Run

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">7&amp;I (3382 JP)</a>'s MBO is off. Itochu has apparently not been able to agree with Ito-san on board composition/representation and management control. That the MBO is off isn't surprising.</li>
<li>
<a href="https://www.smartkarma.com/entities/yangzijiang-shipbuilding-holdings-limited" target="_blank" data-smartkarma-citation="entities:660:1" rel="noopener">Yangzijiang Shipbuilding (YZJSGD SP)</a> is sucking wind as United States Trade Representative’s (USTR) office proposed a raft of fees and other shipping restrictions on Chinese vessels</li>
<li>
<a href="https://www.smartkarma.com/entities/pentamaster-international-ltd" target="_blank" data-smartkarma-citation="entities:31099:1" rel="noopener">Pentamaster International (1665 HK)</a>'s Scheme comfortably gets up after a wild week of trading. </li>
</ul>



7&amp;I (3382 JP)'s MBO is off. Itochu has apparently not been able to agree with Ito-san on board composition/representation and management control. That the MBO is off isn't surprising.

Yangzijiang Shipbuilding (YZJSGD SP) is sucking wind as United States Trade Representative’s (USTR) office proposed a raft of fees and other shipping restrictions on Chinese vessels

Pentamaster International (1665 HK)'s Scheme comfortably gets up after a wild week of trading. 


Last Week in Event SPACE: Seven & I, Yangzijiang Shipbuilding, Pentamaster Int'l, T'Way Holdings

<ul>
<li>The data in this insight is collated from the "shareholding disclosure" link on the HKEx website.</li>
<li>Often there is a corresponding HKEx announcement on the increase - or decrease - in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.</li>
<li>The key stocks mentioned in this regular series include: <a href="https://www.smartkarma.com/entities/mobvista" target="_blank" data-smartkarma-citation="entities:27574:1" rel="noopener">Mobvista (1860 HK)</a>, <a href="https://www.smartkarma.com/entities/xtep-international-holdings" target="_blank" data-smartkarma-citation="entities:18118:1" rel="noopener">Xtep International (1368 HK)</a>, <a href="https://www.smartkarma.com/entities/onewo-inc" target="_blank" data-smartkarma-citation="entities:36204:1" rel="noopener">Onewo (2602 HK)</a>, and <a href="https://www.smartkarma.com/entities/bonny-international-holding-limited" target="_blank" data-smartkarma-citation="entities:44451:1" rel="noopener">Bonny International Holding (1906 HK)</a>.</li>
</ul>


The data in this insight is collated from the "shareholding disclosure" link on the HKEx website.
Often there is a corresponding HKEx announcement on the increase - or decrease - in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
The key stocks mentioned in this regular series include: Mobvista (1860 HK), Xtep International (1368 HK), Onewo (2602 HK), and Bonny International Holding (1906 HK).


HK CEO & Director Dealings (28th Feb 2025): Mobvista, Xtep, Onewo, Bonny International

China

Xtep International Holdings Limited designs, develops, manufactures, markets, and sells sportswear, including footwear, apparel, and accessories for adults and children. The company operates a multi-brand portfolio, featuring its core Xtep brand alongside international brands such as Saucony and Merrell. It was founded in 1987 and is headquartered in Xiamen, Fujian, China.

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Xtep (1368 HK)

Anta Sports (2020 HK): 1Q25 Stable, yet the Margin Remains Our Concern

Anta Sports has a healthy 1Q25, but uncertainty looms due to the US-China trade war and Amer Sports' exposure. The Jack Wolfskin acquisition will...

Osbert Tang, CFA

Anta Sports (2020 HK): Need to Exercise Caution

Anta's strong FY24 result was overshadowed by one-offs and Amer's impact, with earnings declining by 5.4% in 2H24. ANTA and FILA brands facing...

Osbert Tang, CFA

Xtep (1368 HK) - Building a More All-Round Company in Long Run

The FY24 results were inline with BBG estimates and mgmt. guidance and so do the numbers in 2025 YTD. Management’s FY25E guidance was quite...

CMB International

Last Week in Event SPACE: Seven & I, Yangzijiang Shipbuilding, Pentamaster Int'l, T'Way Holdings

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

HK CEO & Director Dealings (28th Feb 2025): Mobvista, Xtep, Onewo, Bonny International

The data in this insight is collated from the "shareholding disclosure" link on the HKEx website. These insights also flag those companies where...

David Blennerhassett

Price Gauge

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Anta Sports (2020 HK): 1Q25 Stable, yet the Margin Remains Our Concern

​Anta Sports has a healthy 1Q25, but uncertainty looms due to the US-China trade war and Amer Sports' exposure. The Jack Wolfskin acquisition will...

Osbert Tang, CFA

Anta Sports (2020 HK): Need to Exercise Caution

​Anta's strong FY24 result was overshadowed by one-offs and Amer's impact, with earnings declining by 5.4% in 2H24. ANTA and FILA brands facing...

Osbert Tang, CFA

Xtep (1368 HK) - Building a More All-Round Company in Long Run

The FY24 results were inline with BBG estimates and mgmt. guidance and so do the numbers in 2025 YTD. Management’s FY25E guidance was quite...

CMB International

Last Week in Event SPACE: Seven & I, Yangzijiang Shipbuilding, Pentamaster Int'l, T'Way Holdings

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

HK CEO & Director Dealings (28th Feb 2025): Mobvista, Xtep, Onewo, Bonny International

The data in this insight is collated from the "shareholding disclosure" link on the HKEx website. These insights also flag those companies where...

David Blennerhassett

Anta Sports has a healthy 1Q25, but uncertainty looms due to the US-China trade war and Amer Sports' exposure. The Jack Wolfskin acquisition will...

Anta's strong FY24 result was overshadowed by one-offs and Amer's impact, with earnings declining by 5.4% in 2H24. ANTA and FILA brands facing...