Anta's first-half net profit fell 17% year-on-year, not the pain of one person, sports brands have reached an impasse

In spite of the year-on-year decline in performance and orders, Anta was slightly better than Li Ning (02331.HK), which was once at the forefront of the storm. Anta yesterday afternoon rose nearly 20%, and eventually closed up 17.15%, stimulated by this, Li Ning, Peak, Xtep, 361 degrees and other domestic sports brand stock prices have soared.

Data shows that the three major ANTA businesses have experienced different degrees of decline, including accessories business revenue decreased by 15.9% year-on-year, footwear and apparel business revenue decreased by 12.3%, 10.6%. In terms of gross profit margin, the accessories business declined by 4.9 percentage points, while the gross profit margins of the other two categories of services declined slightly. In addition, due to the increase in staff costs, R&D costs and effective tax rates of Anta in the first half of the year, the decline in the company's interim results was greater than the decline in revenue (11.6%).

Anta attributed the decline in performance to downward pressure on the economy and intensified competition in the industry. In order to reduce the impact of the industry on the company and reduce the potential inventory and discount risk of the retail channel, ANTA has adopted a more flexible compensation arrangement this year and adopted a new discount rate policy in the first quarter of next year. After this arrangement, Anta's orders fell by 20% to 30% in the first quarter of next year. Otherwise, Anta's orders will be even worse.

In recent years, domestic sports brands have repeatedly suffered setbacks. The “Golden Ten Years” from 2000 to 2009 have been gone forever. After Li Ning’s performance plummeted 65% last year, the company’s chief executive, Zhang Zhiyong, resigned this year and the company’s Spanish subsidiary was also mistakenly passed on bankruptcy. 361 Degrees was downgraded by the Bank of America Merrill Lynch investment rating in July this year. The Bank of America Merrill Lynch believes that 361 degrees will be affected by the general discount in the retail market. Sales and profitability will not be too optimistic in the next 6 to 9 months.

In fact, foreign brands such as Nike, Adidas and other foreign companies have also entered a business dilemma. Adidas has shut down its last factory in China and may even terminate its cooperation with 300 domestic businesses. In the context of sharply rising labor costs and intensifying competition with the industry, Adidas The brand's shuffling process is inevitable.