Comparison of Anta and Lining

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Comparison Since 2008, ANTA, one of the major sportswear makers on the mainland and one of the main competitors of Li Ning, has boosted its market share in china from 5.3 percent to 5.8 percent according to research firm Euromonitor International, outperforming Nike, Adidas and Li Ning which all posted declines. Li Ning, nonetheless, is seeing considerable earnings downgrades over the last several years. By looking back at the financial report in 2010, we can observe that ANTA’s revenue grew 26.1% year-on-year to RMB7.41bn, only second to Li Ning’s among domestic sportswear brands. The revenue growth was primarily driven by its continued national distribution network expansion and higher product ASPs. Moreover, under strong cost control, its full-year 2010 net profit attributable to shareholders increased 24% y-o-y to RMB1.55bn, compared to Li Ning’s RMB1.11bn. Table. Comparison of Anta and Lining RMB in BN | Company | 2010 | 2011 | 2012 | 2013E | 2014E | 2015E | Revenue | Li Ning | 9.48 | 8.93 | 6.74 | 5.44 | 5.85 | 6.75 | | Anta | 7.41 | 8.91 | 7.62 | 6.66 | 7.33 | 8.06 | %Change Y/Y | Li Ning | 13% | (6%) | (25%) | (19%) | 7% | 15% | | Anta | 26% | 20% | (14%) | (13%) | 10% | 10% | Gross Margin | Li Ning | 47.3% | 46.1% | 37.8% | 44.1% | 44.5% | 44.5% | | Anta | 42.8% | 42.3% | 38% | 40.6% | 41.5% | 42% | Operating Margin | Li Ning | 15.3% | 7.1% | (24.6%) | (2.8%) | 3.6% | 10.8% | | Anta | (0.3%) | 22.6% | 20.5% | 22.1% | 22.0% | 22.1% | EPS growth | Li Ning | 16.6% | (65.0%) | (614.1%) | (88.7%) | (114.3%) | 807.5% | | Anta | 23.9% | 11.5% | (21.4%) | (8.5%) | 8.4% | 9.9% | Source: Company data, Bloomberg, J.P. Morgan estimates. According to 1H10 reported data, ANTA had already become No. 1 in terms of sales volume of both footwear (18.0 mn pairs sold) and apparel (32.5 mn pieces sold) among all domestic brands by
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