Anta Sports Shares Rise on Strong First-Half Results

By Sherry Qin

Anta Sports Products shares rose sharply early Wednesday after the Chinese sports-products maker reported a jump in first-half earnings.

Anta's shares were up 11% at 86.15 Hong Kong dollars (US$10.99), their biggest intraday rise since March 2023. However, the stock was still down 16% year to date.

Anta said Tuesday after the market closed that its first-half net profit with the effect of share of profit or loss of a joint venture rose to 4.75 billion yuan (US$651.3 million) from CNY3.59 billion a year earlier. The company's gross profit margin gained 1.3% to an all-time high of 63%.

Citigroup said in a research report that Anta's net profit was 5% above their expectation. The company's operating profit margin for its Fila business, which rose 7.2% on year to a high of 29.7%, contributed to the higher net profit, Citi analysts Xiaopo Wei and Vincent Yang said.

Despite the stellar results, management said retail sales were weaker than expected in May and June and such sales weakness continued into July and August. Management expects Fila's operating profit margin to normalize to 25%-30% in 2023.

The analysts expect the company's second-half earnings growth to significantly moderate from the first half, with uncertain topline growth and lower Ebit margin.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

August 22, 2023 23:04 ET (03:04 GMT)

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