This week's special topic: viewing the sea going and sustainable development of national sports brands from Anta's ten-year "globalization" strategy
Event: on December 18, Anta Group held the theme activity of "Anta 30 +" and announced the group's new decade strategy and sustainable development goal of "single focus, multi brand and globalization". Compared with the five-year strategy of "single focus, multi brands and all channels", Anta has put forward a new strategy to realize the globalization of market position, brand layout, value chain layout and governance structure. We believe that behind the acceleration of domestic substitution of sports shoes and clothing brands and the acceleration of going to sea since 2021 is the narrowing of the gap between the brand strength and product strength of national sports shoes and clothing and major international brands. At the same time, it also reflects the global layout of national brands and the confidence and determination of long-term sustainable growth.
Globalization: behind the acceleration of national sports shoes and clothing brand leader to the sea, it is supported by product strength and brand strength. (1) Brand going to sea: the Chinese market pattern of national brands has been optimized, and the leading brands have accelerated to go to sea. The scale of the global sportswear market will reach 1.12 trillion yuan in 2020, and the CAGR is expected to be about 2% from 2021 to 2025. Under the background of increasing the market share of national sportswear brands in China and narrowing the gap with international famous brand products and brands in recent years, we will explore overseas markets in order to gain national competitiveness International leadership. Review the overseas journey of the head national brand: 1) Li Ning experienced twists and turns: he started the overseas process in 2000, built overseas channels by establishing branches, exclusive stores or authorized distribution stores overseas, suspended overseas operations in the middle of domestic and foreign troubles, and returned through e-commerce channels after 2016; 2) Anta is relatively stable: before 2019, it will sell through the existing channel network of overseas partners. In 2019, it will acquire amersports, a professional sports brand, and officially start the process of globalization, taking advantage of its channel advantages to take the road of internationalization; 3) Special step repeated exploration: overseas retail stores were set up in 2010, but the revenue of self built channels performed poorly. In 2013, although there were more than 200 overseas retail stores, the revenue accounted for less than 4%. In 2019, Tebu acquired fashion and sports brands gesevier and paladin, and achieved certain results in overseas Wuxi Online Offline Communication Information Technology Co.Ltd(300959) channel expansion. In 2020, overseas online retail sales increased by 45% and 52% respectively year-on-year. Review head brand (Li Ning, Anta and Tebu) in terms of their overseas journey and overseas layout, we believe that: 1) it is easier to integrate into the overseas market by using the existing dealers and e-commerce channels than by building their own channels overseas; 2) middle-income countries are the most suitable starting point for brands to go to sea. Developed countries have mature market channels and fixed consumption habits, so it is difficult to overcome them as a first mover market; Market access for low-income countries is relatively easy, but its global recognition is low, which is not conducive to subsequent market development. (2) Product strength: increase the investment in science and technology of running shoes, and the performance of leading products of national brands directly catch up with international brands. From the perspective of product strength, sports shoes and clothing are highly professional, and rely on scientific and technological innovation to improve the product strength. For example, running shoes need to improve the midsole material and its shock absorption and rebound performance for a breakthrough. From the perspective of national brands, Anta nitrogen technology has excellent midsole energy rebound performance and Li Ning's performance The technology midsole is outstanding in weight, resilience and durability. The power nest Pb material used in special professional racing shoes has low density and high resilience, and the gap with international brands continues to decrease. In addition, the head brand strengthened R & D and innovation around the long-term strategy of running shoe technology. Anta combined with sports app to launch big data running shoes after analyzing user needs, so as to correct running habits. Anta has formulated the development plan and ten-year strategy for the next five years to ensure an annual R & D investment of more than 800 million yuan in the next five years, with a cumulative investment of 20 billion yuan in 2030. The scientific and technological performance of domestic brands is not inferior to that of international brands. (3) Brand strength: taking advantage of "joint brand + national style" , the gap between the popularity of national brand leading fish and international brands has narrowed. From the perspective of brand power, national brands publicize with the help of star joint names and the concept of Chinese style, so as to narrow the popularity gap with international brands. For example, NBA stars Wade and Thompson successively launched a joint series with Li Ning and Anta after the expiration of their endorsement with Nike, which has attracted the pursuit of fans at home and abroad, and the national brand has also achieved a qualitative leap in the rejuvenation and internationalization of brand power. In addition, the number of overseas "national tide" consumers has increased, the oriental traditional culture has been popular, and national brands have taken advantage of the empowerment of Chinese culture to go to the world-famous fashion week to effectively enhance the brand influence. Sustainable development: "carbon reduction and environmental protection + DTC transformation" helps the long-term sustainable development of sports shoes and clothing leaders. (1) Carbon reduction and environmental protection: sports shoes and clothing brand leaders take the lead in meeting the trend of sustainable development. 1) brands win consumer recognition through the concept of environmental protection and sustainability and enter the overseas market faster. Taking Muji, a Japanese retail giant, as an example, its simple outer packaging and the natural and pollution-free brand culture publicized abroad are in line with the mainstream of the pursuit of ecological and environmental protection Values to succeed in overseas markets. 2) National brand leaders take the lead in the layout of carbon reduction materials and have the ability of sustainable development for a long time. Specifically: Anta: the company uses recycled plastic bottles to make recycled polyester fabrics, and the overall comprehensive cost of its products is 30% - 50% lower than that of international brands; Li Ning: the company applies eco circler fiber on a large scale in garment production to reduce carbon emission and energy consumption cost through recycling; Special step: committed to the R & D and application of plant derived polylactic acid materials, and strive to realize the coverage of the whole polylactic acid production line within three years. According to Tebu's calculation, if polylactic acid is fully used in all garment production, the company can save more than 3 million tons of steam every year, thus significantly reducing the production cost. 3) Traditional shoes and clothing products are labeled "sustainable" to obtain a high product premium and cater to the consumption preferences of generation Z. Deloitte's Research Report on millennials and generation Z in 2021 shows that environmental issues are the primary concern of generation Z. According to the data of IBM Business Value Research Institute, consumers are willing to pay higher additional fees for product sustainability in 2021 compared with 2019. Compared with millennials, generation Z pays more attention to product sustainability. (2) DTC Transformation: after the inventory crisis, the transformation of brand DTC contributes to sustainable growth. The core of DTC lies in the change of the relationship between brand and consumers, which is characterized by three aspects: reducing intermediate channels, consumer demand-oriented, story and digital new marketing methods. We believe that with the extensive growth of China's sports shoes and clothing into high-quality growth With the improvement of logistics supply chain, the importance of sports shoes and clothing dealers has been gradually weakened. The traditional wholesale model has disadvantages in reaching consumer demand, which has gradually become an obstacle to the development of sports shoes and clothing brands. DTC mode can help enterprises quickly respond to consumer demand, improve market sinking efficiency, comprehensively improve consumer experience and improve channel inventory. Referring to overseas experience, Nike, as a sports shoes and clothing enterprise with DTC transformation earlier, has achieved efficient innovation + user experience improvement through DTC transformation since 2015. From the perspective of China, the transformation of Chinese national sports shoes and clothing brand DTC began in the inventory crisis in 2011. After the inventory crisis, national brand leaders began DTC transformation one after another. Li Ning: the earlier DTC transformation helped the brand achieve rejuvenation and upgrading. The proportion of the company's self operated stores / self operated channels increased from 631 / 22% in 2012 to 1611 / 33% in 2016. Anta: gradually enter the dividend release period through DTC transformation. DTC mode brings high gross profit margin to the company. Anta plans to increase the proportion of DTC in the overall flow to 70% and the store efficiency to 40% in the next two years, invest more than 400 million yuan in digitization to promote the reform of DTC, and plan to double the number of effective members to 120 million by 2025. Special step: adopt the flat "quasi direct sales" mode, reduce the level, and realize the unification of store price + upgrading of inventory control. From 2015 to 2017, the company carried out channel flattening transformation, reducing the original multi-level distribution channels to no more than two levels. At the same time, the o2o platform shared inventory to achieve the unification of store prices and the improvement of inventory control ability. After three years of reform, the inventory turnover efficiency and collection ability have been significantly improved. The turnover days of accounts receivable in 2018 / 2019 decreased by 20.0% / 7.5% respectively year-on-year.
This week's view.
Household sector: in November, the national residential sales area decreased by 16.3% year-on-year to 127 million square meters, down 6.8% compared with the same period in 2019, and the monthly sales data continued to decline; In November, the completed residential area in China was 495 million square meters, a year-on-year increase of 13.23%, and the growth rate changed from negative to positive. And an increase of 9.51% over the same period in 2019. On December 8, the national development and Reform Commission proposed to encourage the implementation of subsidies for furniture and home decoration to the countryside, promote the upgrading of durable consumer goods for rural residents, and benefit the recovery of terminal demand in the home sector on the policy side. In addition, at the central economic work conference on December 10, it was once again emphasized that housing should not be speculation, accelerate the development of long-term rental housing market, promote the construction of indemnificatory housing, support the commercial housing market to better meet the reasonable housing needs of buyers, and promote the virtuous circle and healthy development of the real estate industry due to urban measures. With the gradual release of real estate credit risk and the recent reduction of reserve requirements by the central bank, the pessimistic expectation of the market for real estate will be alleviated, and the valuation of the home sector is expected to be repaired. Paper sector: (1) cultural paper: Recently, the price of cultural paper has remained stable. Large scale paper mills have a strong willingness to support the price, but the downstream transactions are limited, the power to make up for the price is insufficient, and the game situation between market supply and demand appears; the pulp price fluctuates and collates, and the cost side support remains. (2) Box tile paper: the price of box tile paper is affected by the cancellation of the price increase plan by the leader, and the market mentality is pessimistic. Recently, the demand for replenishment in the downstream is stable, and the packaging factory mainly digests the inventory. Subject to the no obvious improvement of downstream orders and the repeated local epidemic, there is great resistance to the rise of paper enterprises, and the rise of waste paper price has limited support for the cost side.
Textile and clothing: (1) Textile manufacturing: under the background of repeated epidemic, we believe that the textile manufacturing sector with high export prosperity and mainly export manufacturing may have structural opportunities, and its overall prosperity is better than that of brand clothing dominated by domestic demand, and the high prosperity of Q3 orders of leading companies continues. The overall expectation of the sector is pessimistic + the fund is in a low position state + the current valuation of the sector is low In comparison, we believe that the current market as a whole or the left layout of industry segmentation leaders is a better time point. (2) Sports shoes and clothing: Recently, the epidemic situation in some areas has been repeated, and the valuation of brand clothing has continued to decline under the exogenous impact of short-term lack of catalysis + repeated epidemic situation. We believe that the left layout can be appropriate at present. The overall prosperity of the follow-up plate needs to wait for the epidemic situation and economic catalysis. (3) Down jacket: from the online data, the market share of Q4 down jacket online sales category has increased significantly this year, the concentration of head brands has increased, and the subsequent cold winter is expected to boost down jacket sales. (4) Outdoor sports: the growth of overseas outdoor sports demand has led to the improvement of China's export volume of corresponding products. The performance of professional outdoor sports equipment and product enterprises in China has been outstanding since 2020, and the industry boom has been upward.
Investment advice
Continue to recommend Quzhou Wuzhou Special Paper Co.Ltd(605007) , a leading enterprise of high growth paper-based materials in the era of replacing plastic with paper. Based on the high prosperity and large space track, the leapfrog improvement of production capacity opens the bottleneck. At present, the company's valuation is close to the historical low, with a high safety margin and large repair space. It is recommended that wood pulp is the leading papermaking industry Shandong Sun Paper Co.Ltd(002078) . The company is diversified and leading in cost control. The current valuation has been at the bottom of history. It is recommended to configure it on the left; In addition, it is suggested to pay attention to the box board leading Shanying International Holdings Co.Ltd(600567) with overseas production line layout and national waste channel construction.
It is recommended that Shantou Wanshun New Material Group Co.Ltd(300057) . Lithium battery aluminum foil is put into operation in the high boom window period and is still in a valuation depression in the industrial chain. The current market has poor expectations, and the bottom is firmly recommended.
It is recommended to give priority to companies with strong ability to bring high growth through channel change and category expansion under the current industry background. It is recommended to pay attention to the leading Oppein Home Group Inc(603833) of customized home furnishings, maintain high growth of decoration income, continue to strengthen the front-end traffic entrance under the background of differentiation of home consumption traffic, and gradually smooth out the business model of new channels at present. Software home continues to recommend Jason Furniture (Hangzhou) Co.Ltd(603816) , and it is recommended to pay attention to Minhua holdings. Jason Furniture (Hangzhou) Co.Ltd(603816) the channel reform is gradually realized to the performance. Based on the original strong sofa channel, new categories such as mattresses and customized home began to increase; Minhua holdings is in the stage of continuous high-speed store opening in the domestic sales channel, the market share and performance are in a relatively strong upward channel, and there is still much room for improvement in the medium and long-term functional sofa penetration.
Risk statement
Macroeconomic growth is less than expected, resulting in the decline of residents' purchasing power; Local epidemic situation repeatedly affects terminal retail; The transformation effect of brand DTC is less than expected.
