Industry status
In 2021, the performance of local sports leaders achieved rapid growth, and the net profit of Anta sports / Li Ning / Tebu international increased by 50% / 136% / 77% respectively. However, the epidemic in March had a certain impact on terminal sales. We believe that the government's continued attention to national fitness will help the sports shoes and clothing industry maintain rapid growth.
Commentary
The leader of local sports shoes and clothing will come to a successful end in 2021. Benefiting from the rise of domestic consumption and other factors, the international revenue of Anta sports / Li Ning / Tebu increased by 39% / 56% / 23% year-on-year respectively in 2021, of which 2h21 increased by 27% / 50% / 31% year-on-year respectively. The high attention of local sports brands brought good retail discount performance, driving the group's gross profit margin to increase by 3.5ppt/4.0ppt/2.6ppt respectively year-on-year Operating leverage driven profit growth faster than revenue, profitability continued to improve, and the net profit attributable to the parent increased by 50% / 136% / 77% respectively year-on-year, of which Li Ning's net profit margin hit a new high since listing. At the same time, good terminal sales and inventory management also promote the inventory of various brands to maintain a healthy level.
At the beginning of 2022, the consumption of sports shoes and clothing has a good momentum, and the epidemic has a great impact after mid March. Driven by the traditional consumption peak season of the Spring Festival and the Beijing Winter Olympics, the terminal sales of all brands achieved good growth from January to February, and the performance of Anta sports brands was better than the company's expectation. The offline / online flow of Li Ning brand increased by more than 35% / more than 65%, and the flow of special step brand increased by more than 30% (e-commerce increased by more than 35%). However, the epidemic since mid March has affected store passenger flow and product transportation, and has a certain impact on terminal sales performance. Considering the uncertainty of the epidemic situation, the management of each company remained relatively cautious about the annual performance guidance. The main brand of Anta Sports increased by more than 20% and FILA increased by 15-20%; Li Ning guides the income to increase by double digits to the low segment of 20-30%; The revenue of main brands under Tebu international guidelines increased by 25-30% at the same time.
National Fitness policy support is expected to help the rapid development of sports shoes and clothing industry. On March 23, the general office of the CPC Central Committee and the general office of the State Council jointly issued the opinions on building a higher level public service system for national fitness, which clearly stated that "by 2035, a public service system for national fitness suitable for socialist modern countries will be fully established, and the proportion of people who regularly participate in physical exercise will reach more than 45%, and further deployed and improved the system and mechanism to support social forces to develop national fitness Promote the balanced development of public services for national fitness in urban and rural areas, and consolidate the mass base for extensive participation in national fitness. Since the first mention of national fitness in 1995, national fitness has continued to become one of the key points of the government's work. We believe that the government's support for public health and national fitness will continue to stimulate residents' sports enthusiasm, promote residents' sports participation rate, and drive the rapid development of sports shoes and clothing industry.
Valuation and recommendations
It is recommended that Anta sports, Li Ning and Tebu international, the leaders of high view bearing sports, and Shenzhou International and Huali Industrial Group Company Limited(300979) , the leaders of textile and clothing manufacturing. Shenzhou International's performance in 2021 was affected by the overseas epidemic, but the personnel stability, efficiency improvement and new customer cooperation in 2022 are in order. We have some confidence in the company's performance recovery in 2022. Maintain the profit forecast, investment rating and target price of the above companies unchanged. It is suggested to pay attention to 361 degrees of sports shoes and clothing brands (not covered) in the deep middle and low line market.
Risk
The epidemic continued repeatedly, the terminal retail environment was less than expected, and the price of raw materials rose.
