Anta expects sales boost on new stores

10:22, April 28, 2010      

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Anta Sports Products Ltd, China's largest maker of athletic shoes, said sales may grow by at least 15 percent this year as it opens more stores.

"We expect sales growth to be around 15 to 20 percent, and we want to execute our plan even better," Chief Financial Officer Paul Ling said. "We expect net profit to grow even more than the sales growth because we can achieve operating efforts to save some expenses."

Anta, which sponsors China's Olympic Committee as well as women's tennis players Jelena Jankovic and Zheng Jie, is benefiting as Chinese consumers buy more casual shoes and clothing. Retail sales in China rose 17.9 percent in the first quarter from a year earlier.

The Chinese shoemaker's net income last year rose 40 percent to 1.25 billion yuan ($183 million), and sales gained 27 percent to 5.87 billion yuan. Anta is based in Jinjiang, Fujian province.

Anta, which has more than doubled in market value over the past year, dropped 1.3 percent to HK$13.96 in Hong Kong on Tuesday.

The benchmark Hang Seng Index, which fell 1.5 percent on Tuesday, has gained 44 percent over the past year.

"The macroeconomic environment in China this year is improving and is supporting local consumption," Jessica Hong, a Hong Kong-based analyst at Mirae Asset Securities Ltd who recommends buying Anta, said.

"Retailers are also holding low inventory this year and have been increasing product orders to meet demand."

Same-store sales

Same-store sales, a measure that strips out the effect of recently opened outlets, will probably accelerate this year after growing by between 5 percent and 10 percent in 2009, James Zheng, Anta's executive director, said on Feb 24.

Anta plans to increase its outlets by 8.5 percent to 7,200 this year, Claudia Lo, vice-president for investor relations, has said.

Anta expects product orders this year to increase as retailers replenish stock. The company plans to increase spending on marketing and branding in China, Ling said.

Anta may consider raising prices in the fourth quarter as raw material costs such as cotton rise, he said.

"We're improving our design capability," Ling said. "We also want to have more international players to represent us." He said his sales growth forecast was a "conservative estimate".

The company added 924 stores in China in 2009, taking the total to 6,591, it said in its 2009 earnings statement. Footwear sales rose 29 percent to 34.6 million pairs of shoes.

Having 10,000 stores in China is an achievable target, Ling said. Anta may open outlets in overseas markets in the next three years as the mainland becomes "saturated", starting possibly in Singapore and Southeast Asia, he said.

Anta will only expand overseas after it has completed work on trademark protection, Ling said.

Source: China Daily


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