Nikeq3 revenue rebounded slightly, and the scale of Greater China continued to narrow. Nike released fy2022q3 financial report. According to the company’s disclosure, fy2022q3 company achieved a total operating revenue of 108 US $7.1 billion, a year-on-year increase of + 4.96%, an increase of 8% on the basis of currency neutrality. The net profit attributable to the parent company was US $1.396 billion, a year-on-year increase of – 3.66%, and the gross profit margin was slightly + 1.05 PCT, reaching 46.61%. By region, the key revenue of Nike brand North America / EMEA (Europe, Middle East and Africa) / Greater China / APLA (Asia Pacific and Latin America) was + 8.92% / + 6.52% / – 5.22% / + 11.10% year-on-year respectively. It can be seen that the key revenue scale of Greater China continued to narrow, but decreased by – 19.5% year-on-year compared with the previous quarter 76% eased, mainly because Nike focused its limited supply on the North American market. In terms of products and brands, the sales of Nike’s main brands increased by + 8% year-on-year to US $10.323 billion, including + 2.38% year-on-year for shoes, + 8.97% year-on-year for clothing and + 31.5% year-on-year for equipment 76%； Converse brand sales rose – 1% year-on-year to $567 million. The annual revenue is expected to increase by single digits compared with the previous year. Due to higher macro input costs, supply chain costs and the company’s strategic action to speed up the delivery of products in North America, the gross profit margin is expected to decrease by 150pct compared with the previous year.
Digital unsustainability continues to be promoted, and new environmental protection technologies and NFT products are released. In the third quarter, rtfkt released the first official Nike brand NFT, marking Nike’s first step in the creation of digital products. In terms of technological innovation, the company released ispalink technology, which can realize Italic manufacturing without glue, heating, cooling and conveyor belt system, and it takes only about 8 minutes to assemble a pair of shoes. This technology is expected to be available in June 2022.
Supply chain problems persist, and consumer demand cannot be fully met for the time being. In the third quarter, the company’s inventory increased by 15% year-on-year to US $7.7 billion. All Vietnamese factories of the company have started operation, the production capacity will be gradually restored and the inventory supply will be gradually improved. However, the company still faces major logistics problems, especially the continuous deterioration of key transportation in North America. However, with the efforts of all parties of the company, the transportation delay is nearly 4 weeks shorter than the industry average. Supply chain problems are expected to ease in the fourth quarter.
Nike’s digital business is growing rapidly. In the third quarter, Nike’s digital business sales increased by 19% year-on-year, with double-digit growth in North America, Greater China and EMEA (Europe, the Middle East and Africa). Among them, the growth of key in North America is the strongest. Nike direct sales increased by 27% compared with last year, and Nike digital business increased by 33% compared with last year, which is mainly due to the growth of double-digit traffic, the strong growth of new members and member participation, and the increase of member purchase frequency. Nike digital has the highest penetration rate in the North American market, accounting for one-third of the total revenue of the North American market.
Fashion clothing: from January to February, the flow was steady, and the monthly growth rate was first high and then low, which was mainly due to the early consumption peak driven by the early season, resulting in different base numbers. The flow of mass clothing fluctuated greatly, and the performance of medium and high-end clothing was stable. The core recommendation [ Biem.L.Fdlkk Garment Co.Ltd(002832) ], corresponding to 18 times of PE in 22 years.
Sports sector: there are fluctuations in the short-term flow warning. We estimate that Anta brand / FILA / Li Ning / special step flow will increase rapidly by 20% + / 15% + / 30% + / 30% + from January to February. We judge that from March to April in the future, it is expected that with the arrival of high base, there will be some pressure on water growth. In the medium and long term, the rise of track growth + ice and snow and other segments is expected to bring investment opportunities. We judge that the share of national brand market is expected to increase. According to the development plan of ice and snow sports, the scale of ice and snow sports industry is expected to be 1 trillion yuan / driving 300 million people to participate in ice and snow sports in 2025. We are firmly optimistic about high growth sports tracks in the medium and long term, and recommend [Li Ning, Anta sports, Tebu international and Shenzhou International], corresponding to 29 / 24 / 21 / 24 times of PE in 22 years, paying attention to Huali Industrial Group Company Limited(300979) , corresponding to 25 times of PE in 22 years.
Jewelry sector: Festival demand + investment hedging demand has increased, and gold jewelry sales are hot. Gufajin and other products are sought after by the market, and the leading channels continue to sink. In the jewelry sector, we recommend [ Lao Feng Xiang Co.Ltd(600612) ], corresponding to 11 times of PE in 22 years.
[Anta Sports]
The company issued the annual performance announcement of 2021. In 2021, the company achieved a revenue of 49.328 billion yuan, a year-on-year increase of + 38.9%, a gross profit margin of + 3.4pct to 61.6%, a sales expense ratio of + 5.7pct to 36% and a management expense ratio of 6% year-on-year. In conclusion, the net profit attributable to the parent company was + 1.2pct to 15.7% year-on-year, and the net profit attributable to the parent company was + 49.6% to 7.720 billion yuan year-on-year (including a share of the loss of the joint venture company of about 81 million yuan, and the net profit attributable to the parent company after excluding it was + 35.4% year-on-year).
[Anta Sports]
The company issued a final dividend announcement for the year ended December 31, 2021. The company announced that the final dividend of 2021 is an ordinary dividend of HK $0.68 per share, and the dividend payment date is May 26, 2022.
[Li Ning]
The company issued a final dividend announcement for the year ended December 31, 2021. The company announced that the final dividend of 2021 is an ordinary dividend of RMB 0.4597 per share, and the dividend distribution date is June 30, 2022.
\u3000\u3 Shengda Resources Co.Ltd(000603) 558
The company issued a progress announcement on the guarantee provided by the parent company for its subsidiaries. On March 22, 2022, the company signed the guarantee contract for Guizhou Dingsheng no Industrial And Commercial Bank Of China Limited(601398) Jiangshan sub branch, with the guarantee amount not exceeding RMB 75 million; Signed the guarantee contract for Guizhou Jiansheng Industrial And Commercial Bank Of China Limited(601398) Jiangshan sub branch, with the guarantee amount not exceeding 65 million yuan. As of the disclosure date of this announcement, the company has provided guarantee for Guizhou Dingsheng with a total amount of 75 million yuan and Guizhou Jiansheng with a total amount of 65 million yuan.
Anta Sports: strong multi brand operation ability, marching into the new decade
Investment highlights:
The company’s revenue / performance in 2021 increased by 39% / 50% year-on-year, with a brilliant performance.
Anta brand: the Olympic cycle superimposes product upgrading, promotes brand influence, and DTC’s transformation is smooth; FILA brand: consolidate the positioning of “top-level goods, top-level brands and top-level channels”, and achieve remarkable results in product channel optimization; Other brands: Descente does not kolonsport continues to grow at a high speed, and the profit quality has improved significantly.
Amer’s losses narrowed and the long-term development plan was steadily promoted.
The company operates steadily with abundant cash flow. Looking forward to 2022, we expect the company’s revenue / performance to increase by 21% / 18%. Investment suggestion: we expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 9.101109.58/13.092 billion, corresponding to 25 times of PE in 2022, maintaining the “buy” rating. Risk warning: the scope and duration of the epidemic exceed expectations; Decline in terminal demand; The development of multi brand and overseas business is not smooth; The launch of RMB exchange rate has brought performance fluctuations. Industry and topic: focus on medium and long-term investment opportunities in sports shoes and clothing
Investment highlights:
Sports track: it fluctuates in the short term and still grows rapidly in the medium and long term.
Brands: the strength of domestic brand products is strengthened, and the market share is expected to increase.
Manufacturer: industry resources are concentrated to the head, and the strong are stronger to stabilize the supply chain.
Investment suggestion: we recommend Li Ning, Anta sports, Tebu international and Shenzhou International. The current price corresponds to 30 / 25 / 22 / 24 times of 22-year PE respectively. Pay attention to Huali Industrial Group Company Limited(300979) , 26 times of 22-year PE and 12 times of 22-year PE.
Risk warning: the impact of covid-19 epidemic exceeded expectations; Low end consumption risk; The store expansion of each company is less than expected; The development of new business is not smooth, etc.
