The Performance Of Hong Kong Stock Sports Clothing Is Generally Better, But The Trend Of Differentiation Is Even More Obvious.

Scanning the latest operation of Hong Kong Stock apparel companies in the two quarter and the first half of this year, we can see that business performance is generally improving, but at the same time, the trend of differentiation is becoming more and more obvious. Enterprises also have many transformation, adjustment and optimization actions.

Anta sports retail sales continued to grow in the two quarter

In July 11th, Anta sports announced the latest business performance in the second quarter of 2019. The announcement shows that the retail sales of Anta brand products (calculated at retail value) in the second quarter of 2019 compared with the same period in 2018, and recorded a growth in the middle of 10%-20%. The retail sales of other brand products in the second quarter of 2019 (calculated by retail value) increased by 55%-60% compared with the same period last year. From the first half of 2019, the retail sales of Anta brand products (calculated by retail value) compared with the same period in 2018, recorded a low growth rate of 10%-20%; the retail sales of other brand products (calculated by retail value) compared with the same period in 2018 showed an increase of 60%-65%.

Anta stressed that the announcement was only related to group ANTA, FILA, DESCENTE, KOLONSPORT, SPRANDI and KINGKOW brand businesses, and did not include Amer Sports Corporation business.

Anta sports 2018 annual performance Bulletin shows that the company achieved operating income of 24 billion 100 million yuan in 2018, an increase of 44.4% over the same period last year, achieving a profit of 5 billion 700 million yuan, an increase of 42.9% over the same period last year, achieving a net profit of 4 billion 100 million yuan, an increase of 32.9% over the same period last year. As of December 31, 2018, there were 10057 Anta stores in mainland China (including Anta children's independent stores). There were 1652 FILA stores in mainland China, Hongkong, Macao and Singapore (including FILAKIDS and FILAFUSION independent stores), and 117 DESCENTE stores in mainland China. Anta sports said that the company will continue to push forward the "value retail" strategy launched in November 2018, and will master the consumption big data through smart retail applications. In addition, technology products including running new technology series, KT basketball shoes and other technology will drive growth. In terms of sales channels, the group will further increase the proportion of shops in shopping centers and department stores in Anta, and continue to promote the growth of the group in the business channel.

Since the beginning of the year, Anta sports shares have risen by more than 50%. By the end of July 19th, the company's market value was HK $151 billion 944 million.

Lining released earnings preview, stock prices hit a new high of nearly 10 years

In June 24th, Lining issued a notice of Earnings Preview. The announcement showed that the total profits of the company's equity holders should be increased by six yuan or 269 million yuan in the same period of 2018 as compared to June 30, 2019. The increase will be no less than 440 million yuan.

Li Ning Co said the group's performance improvement was mainly due to a profit increase of less than 240 million yuan or 90% yuan in continuing operations over the same period last year. The increase in net operating profit is due to the over 30% increase in revenue and the continuous improvement in operating profit margins. In addition, the one-time non operating profit (mainly from investment income) is no less than RMB 200 million yuan, due to a large increase in non operating profits of affiliates and other non operating special projects.

Lining's share price rose by 18.32% as a result of his pre performance. Lining's stock price has risen more than 130% since the beginning of the year, and its share price has recently exceeded 20 Hong Kong dollars, a new high since December 2010, with a market value of HK $45 billion. By the end of July 19th, Lining's market value was HK $44 billion 659 million.

Lining's 2018 annual report shows that in 2018, the turnover of the company was 10 billion 511 million yuan, an increase of 18.4% over the same period last year, and the profit for equity holders was 715 million yuan, an increase of 38.8% compared with the same period last year. The gross profit margin was 48.1%, compared with 47.1% last year. The company said that the main reason for the increase in revenue is that e-commerce has been developing rapidly in recent years, and the proportion of income has continued to rise. Although the growth rate has slowed down, it is still significantly higher than other business channels. Two, the market identity of Lining brand and products has been improved, and the sales performance of terminal has been good, so that both direct sales revenue and franchisee income have been increased by double-digit. Three, the basketball and sports fashion items that the company invested mainly has excellent performance, and the children's clothing has also gained a good market response, an obvious increase year by year.

According to another report, in May 22nd, Lining's Guangxi supply base was launched, locating as a cluster supply base including raw materials, sports shoes and sportswear. It is reported that this is the first time that the company has built factories to set foot in the manufacturing links of the upper reaches of the sporting goods supply chain.

XTEP's two quarter retail sales grew by 20% over the same period last year.

In July 12th, XTEP International announced the operation of mainland China in the second quarter of 2019. The bulletin showed that sales in the same store (at retail value) reached a double-digit growth rate over the same period last year, and retail sales (including online and offline channels) increased by more than 20% over the 3 months ended June 30th. Retail discount level is about 25% off to twenty percent off; retail inventory turnover is about four months.

XTEP international 2018 annual performance Bulletin shows that the company achieved revenue of 6 billion 383 million yuan in 2018, an increase of 24.83% over the same period last year, and the share holders of ordinary shares should earn 657 million yuan, up 60.86% over the same period last year. As of December 31, 2018, there were 6230 retail outlets in XTEP, and about 200 stores in China in 2018, mainly in shopping centres.

XTEP International said that it benefited from the completion of the three year strategic transformation. The company began to recover its growth momentum in 2018, mainly due to the good product mix and acceptability, the higher sales rate and the increase in the replenishment orders from the total agents. In addition, the group carried out the stock repurchase in 2017, and the demand for the replenishment of the total agent was greater; and the sales performance of the downstream retailers was strong due to the upgrading of the shops and the optimization of the retail network.

In May 2nd, XTEP International announced that the company entered into a share purchase agreement with its E-Land World Company, Ltd and E-Land USA HoldingsInc (collectively known as the "love and love group") through its wholly owned Affiliated Companies. XTEP will purchase all the shares issued by the ultimate holder of K-Swiss, Palladium and Supra such as K-Swiss, Palladium and Supra with a cash price of 260 million US dollars (about 1 billion 750 million yuan). XTEP International said in its announcement that the company plans to expand from a single Brand Company to a multi brand group. It believes that K-Swiss and Palladium have significant opportunities in China and plans to invest a lot of time and resources to support the growth of the two brands.

XTEP international stock price has risen 17% since the beginning of this year. By the end of July 19th, the company's market value was HK $12 billion 143 million.

China's trend in the two quarter, Kappa retail sales grew

In July 12th, China announced the second quarter operation in 2019. The announcement shows that in the second quarter of 2019, the group Kappa brand store (excluding Kappa children's clothing business and Japanese business) recorded an increase in the number of units in the retail sales of the entire platform. Among them, offline business recorded a low number of units growth, e-commerce business recorded 30%-35% growth. In the same store sales, the Kappa brand store (excluding Kappa children's clothing business and Japanese business), which was launched in the same quarter last year, was calculated. In the second quarter of 2019, the sales volume of the same platform decreased year by year. Among them, the offline business recorded a high number of units declined, e-commerce business recorded 30%-35% growth. In the second quarter of June 30, 2019, the number of Kappa brand shops in the group was 1228 (excluding Kappa children's clothing business and Japanese business), a 48 increase compared with the end of last year.

According to the announcement, the group Kappa brand business is in the transition period. In the second quarter of 2019, two new national logistics distribution centers were completed, and the forward and reverse commodity distribution schemes fell to the ground. At the same time, the group developed and deployed cloud storage system to improve the speed of all channel commodities. Group online business continued to grow. Although the performance of this quarter was affected by poor sales of short sleeved products, Kappa brand vulcanized shoes had strong sales performance this quarter, and footwear products accounted for a higher proportion.

China has changed its financial year settlement date from December 31st to March 31st and reported its financial performance for the 15 months ended 31 March 2019. China's trend 2018/2019 annual performance report shows that in the 15 months ended March 31, 2019, China's sales volume reached 2 billion 144 million yuan, up 15.4% over the same period last year, and the company's equity holders should earn 866 million yuan, down 27.2% from the same period last year. According to the report, the group set up brand head shop, shopping center store and OLE store, and expand the business development of PHENIX brand in China.

Since the beginning of this year, China's stock price has dropped by about 15.8%, and the company's market value ended at HK $5 billion 945 million as of July 19th.

The retail sales of main brands increased slightly in the two quarter.

In July 16th, 31st degree released the second quarter business summary, announcements showed that the retail sales of 31st degree main brand products in the second quarter of 2019 (at retail value) were lower than that in the same period in 2018. The retail sales of the 31st degree children's clothing brand (independent business unit) in the second quarter of 2019 (at retail value) were higher than that in the same period of 2018.

The 31st 2018 annual performance bulletin showed that the company achieved an income of 5 billion 187 million yuan in 2018, an increase of 0.57% over the same period last year, and realized that the equity holders should account for 304 million yuan in profit, down 33.51% from the same period last year. In 2018, Sino US trade war dragged down the global economy. The domestic and foreign economic prospects were full of uncertainties. The confidence of companies and consumers, and the reduction in exports and factory production, caused the loss of public wage income, resulting in a weak consumption desire, which was particularly obvious for the middle and low income groups of the group. Under the haze of China's economic slowdown and Sino US trade friction, the overall retail market is under pressure, and consumers are relatively conservative in the consumption of secondary necessities, which has slowed down the third quarter and fourth quarter of 2018.

In June this year, the brand plan was launched. The company plans to operate 1000 basketball courts in a second tier city in the next three years. The first plan will be completed in 15 first and second tier cities, 100 in 2020, 300 in 2021 and 1000 in 2022. The goal of brand remolding is to compete for young people and middle class consumers.

Since the beginning of this year, the share price has dropped by about 14.1%. By the end of July 19th, the company's market value was HK $2 billion 874 million.

Hua Shang observation: Sportswear enterprises' performance differentiation trend is more and more obvious, speeding up transformation and optimization.

Scanning the latest operation performance of Hong Kong stock sports apparel enterprises, we can find that in the two quarter and the first half of this year, the performance of sports apparel enterprises generally showed a good trend. It should be said that sportswear is still a good subdivision industry in the clothing industry.

However, under the good overall situation, the performance of sportswear enterprises also showed a more obvious trend of differentiation. Specifically, companies with larger revenue scale also appear to be more competitive. Anta sports and Lining in the two quarter and first half of the year's performance has continued to rise and exceeded some of the expected performance. The performance of Anta sports has even led to the "beating" of several short listed companies. Some of its operational indicators are "abnormal". Lining's expected performance in the first half of the year is considered to be completely strong. In terms of share price gains, Anta sports has risen by over 50% since the beginning of the year, while Lining's share price has risen more than 130% since the beginning of the year, and its share price has reached a new high of nearly ten years. In the second quarter and the first half of the year, the performance of China's two smaller companies was basically "slightly increasing", and both of them thought they were in the process of transformation. China's trend continued to be in the "transformation period".

What is worth mentioning is that although the trend of differentiation is obvious, some business trends of sportswear enterprises still have many similarities. For example, the e-commerce business of sports apparel enterprises are mostly in relatively fast growth, and they all plan to pay more attention to the expansion of e-commerce business. In the context of online channel expansion, sportswear enterprises will shift more to shopping mall channels and plan to open more stores. In brand operation, sportswear enterprises, whether single brand or multi brand strategy, are more concerned with cultivating core categories and superior single products, continuing to introduce more subdivided products and categories, and paying more attention to attracting young consumers in marketing strategies. In the market of overall performance and differentiation, sports apparel enterprises are speeding up the pace of optimization and transformation, hoping to get more consumption flow in the competitive sports goods market and occupy more market share in the increasingly subdivided consumption demand.