July 13, 2016

ANTA Sports Products (2020 HK) Not Rated Share Price HKD 16.02 1Q17 fair takeaways

Takeaways from company visit Company Description ANTA Sports designs, develops, manufactures and We recently attended Anta’s 1Q17 trade fair in Jinjiang and visited Anta markets ANTA sportswear, including sports footwear, and Fila stores in Xiamen. Despite Anta’s increasingly conservative apparel and accessories. outlook, which is similar to peers, there were clearly strong interests in the company’s new functional sportswear products as distributors build up their 1Q orders. Customer traffic was clearly healthier in shopping Statistics malls vs. street-level stores. Anta has already taken the initiative to shift 52w high/low (HKD) 24.05/14.24 more stores into malls in a bid to increase store efficiency. Key catalysts: 3m avg turnover (USDm) 17.0 1) rising contribution from Fila brand and sales via e-commerce channels; Free float (%) 38.2 2) product mix upgrade; and 3) improving sales efficiency through store Issued shares (m) 2,504 Market capitalisation HKD40.1B Consumer Disc. upgrades and utilization of new logistics centre. USD5.2B Product mix upgrades continue into 1Q17 Major shareholders: Anta International Group Holdings Ltd. 54.9% Anta continues to roll out more functional sportswear products, with a DING YA LI 6.4% strong focus on the sole technology of running shoes, basketball shoes, Norges Bank Investment Management 1.1%

and water repelling/ wind-breaking jackets for the quarter. Note that Price Performance since the company first introduced its smart running shoes (19 Jun 16; ~CNY369) it remained top 5 in footwear sales every week. 26.0 220 China 24.0 200 Takeaways from store managers 22.0 180 Our visit to Anta’s 7th generation stores was encouraging. Retail discounts 20.0 160 normalized to around 30% vs. 30%+ the previous quarters, according to 18.0 140 the store managers. Operators are now able to achieve high single-digit EBIT margin for the stronger performing stores vs. the nationwide 16.0 120 average of MSD %. Store managers attributed the stronger performance 14.0 100 th th to the 7 generation stores compared to the 6 generation stores. Anta 12.0 80 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 has ~7,000 core stores. It has upgraded ~1,000 stores so far and management expects to upgrade another 2,000 this year. ANTA Sports - (LHS, HKD) ANTA Sports / Hang Seng Index - (RHS, %) Valuations -1M -3M -12M Absolute (%) (0) (15) (9) ANTA is trading at 14.1x/12.2x FY16/17E PE, according to Bloomberg Relative to index (%) (1) (18) 7 consensus, below its three-year average of 15.1x. The counter is at a 10% Source: FactSet premium to H-listed sportswear peers (FY16E: 12.7x) or 53% discount to international peers’ average (FY16E: 30.0x). Consensus currently expects an EPS CAGR of 22% for FY15-17E.

FYE Dec (CNY m) FY11A FY12A FY13A FY14A FY15A Anta is the largest sportswear company in Revenue 8,905 7,623 7,281 8,923 11,126 China EBITDA 2,025 1,536 1,578 2,066 2,606 Retail sales (CNYm) Core net profit 1,730 1,359 1,315 1,700 2,041 Core EPS (CNY) 0.69 0.54 0.53 0.68 0.82 Others Nike Core EPS growth (%) na (21.5) (3.2) 29.1 19.9 Net DPS (CNY) 0.42 0.39 0.38 0.48 0.57 Core P/E (x) 19.9 25.3 26.2 20.3 16.9 Peak P/BV (x) 5.4 5.1 4.8 4.4 4.0 Net dividend yield (%) 3.1 2.8 2.8 3.5 4.1 Converse adidas ROAE (%) na 20.7 18.9 22.7 24.9 Erke ROAA (%) na 14.9 13.0 15.8 17.1 EV/EBITDA (x) 7.0 6.3 9.1 11.0 15.1 361 Net debt/equity (%) net cash net cash net cash net cash net cash Degrees Anta

New Li Ning Balance Xtep

Source: Euromonitor, Maybank Kim Eng

Benjamin Ho Ka Leong Lo [email protected] [email protected] (852) 2268 0632 (852) 2268 0630

THIS REPORT HAS BEEN PREPARED BY KIM ENG SECURITIES (HK) LTD. SEE PAGE 8 FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS ANTA Sports Products

Appendix

Fig 1: Anta’s 7th generation store footwear section layout Fig 2: Anta’s latest smart running shoes (released 19 June)

Source: Maybank Kim Eng Source: Maybank Kim Eng

Fig 3: Anta Kid’s store layout Fig 4: Fila store layout inside shopping mall

Source: Maybank Kim Eng Source: Maybank Kim Eng

July 13, 2016 2

ANTA Sports Products

Fig 5: ANTA Sports 12m forward PE band (HKD)

30.0 24x

25.0 20x

20.0 16x

15.0 12x

10.0 8x

5.0 4x

0.0 Jul 09 Apr 10 Jan 11 Oct 11 Jul 12 Apr 13 Jan 14 Oct 14 Jul 15 Apr 16

Source: Bloomberg, Maybank Kim Eng

Fig 6: ANTA Sports 12m forward P/B band (HKD) 30.0 6.0x

25.0 5.0x

20.0 4.0x

15.0 3.0x

10.0 2.0x

5.0 1.0x

0.0 Jul 09 Apr 10 Jan 11 Oct 11 Jul 12 Apr 13 Jan 14 Oct 14 Jul 15 Apr 16

Source: Bloomberg, Maybank Kim Eng

July 13, 2016 3

July 13, 2016 ANTAProducts Sports

Fig 7: Sportswear and apparels sector peer valuation comparison (as of 11th July 2016) Px FY15-17F Net Market 3m Performance PER P/BV ROE ROA EV/EBITDA Dividend Yield EPS CAGR PEG GPM NPM Gearing Price Cap ADTV 1m 3m FY16E FY17E FY16E FY17E FY16E FY17E FY16E FY17E FY16E FY17E FY16E FY17E 3m chg EPS FY16E FY16E 2015

Company Ticker (lcy) (USDm) (USD) (%) (%) (x) (x) (x) (x) (%) (%) (%) (%) (x) (x) (%) (%) (%) (%) (x) (%) (%) (%)

H-listed sportswear footwear and apparel Anta Sports 2020 HK 15.22 4,907 17.4 (5.1) (21.3) 14.1 12.2 3.5 3.1 25.7 26.7 19.1 20.4 8.6 7.5 4.9 5.6 0.0 22.0 0.6 46.9 17.9 Net cash Belle Int’l 1880 HK 4.55 4,947 10.9 3.4 1.3 9.0 9.2 1.2 1.2 14.2 13.1 11.5 10.8 4.6 4.7 7.0 6.8 (6.4) (13.8) (0.7) 54.4 8.9 Net cash

Pou Sheng Int’l 3813 HK 2.20 1,512 1.8 (1.8) 25.0 14.9 12.9 1.5 1.4 10.4 11.2 7.2 7.9 9.3 8.0 0.4 1.1 35.7 n.a. 34.2 3.9 5.9 .

Xtep Int’l 1368 HK 3.98 1,133 2.4 (3.6) (6.4) 10.5 9.4 1.5 1.4 14.2 15.6 8.8 10.3 5.0 4.5 5.6 6.2 0.6 17.2 0.6 42.7 12.2 Net cash China Dongxiang 3818 HK 1.41 1,006 1.8 1.4 (7.1) 11.9 10.9 0.7 0.7 5.7 6.5 6.2 6.4 8.2 7.4 5.1 5.8 0.0 (10.1) (1.2) 55.1 27.3 Net cash C.Banner Int’l 1028 HK 2.85 765 0.9 (5.0) 2.5 22.3 20.5 2.1 1.9 12.4 12.5 7.0 7.2 14.0 13.1 1.6 2.0 0.0 n.a. 58.6 6.8 21.7 Li Ning 2331 HK 3.99 970 4.3 20.9 11.8 21.8 13.7 2.0 1.7 10.2 14.8 4.9 7.3 8.2 5.8 0.5 1.3 (4.2) n.a. n.a. 46.0 4.2 Net cash Peak Sport 1968 HK 2.19 674 2.5 0.9 5.3 10.4 9.4 0.9 0.8 8.5 9.0 6.4 6.6 2.3 2.0 6.7 7.3 0.0 13.1 0.8 38.8 12.6 Net cash Hosa Int’l 2200 HK 2.60 556 0.2 1.6 13.0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Net cash 361 Degrees Int’l 1361 HK 2.07 552 0.5 (8.0) (22.2) 6.5 5.7 0.6 0.6 10.9 11.5 6.0 6.8 1.8 1.6 6.4 7.4 (2.5) 22.0 0.3 41.0 11.2 Net cash Market-weighted average 8.9 (0.1) (3.3) 10.6 11.3 1.9 1.8 15.9 16.4 11.7 12.2 6.9 6.2 4.8 5.3 1.1 4.5 0.0 48.3 12.1 11.2 Average 3.9 (0.1) 2.2 0.1 12.1 1.4 1.3 11.2 12.4 7.7 8.6 6.8 5.8 3.9 4.5 2.6 8.4 0.1 47.6 10.5 13.8 A-listed sportswear footwear and apparel Kingnet Network 002517 CH 45.01 4,553 25.2 6.0 (7.2) 33.8 30.4 20.6 13.3 55.4 44.5 36.2 32.2 43.0 35.4 0.3 0.5 (14.0) 16.9 2.0 61.7 26.1 Net cash Guirennia 603555 CH 25.02 2,296 9.7 (2.1) (13.9) 43.7 39.2 6.0 5.5 14.5 15.1 9.5 9.8 27.3 25.0 0.7 0.7 (12.3) 16.9 2.6 44.3 16.7 13.1 Metersbonwe Fashion002269 CH 4.45 1,680 12.7 (5.9) (13.1) 111.3 70.6 3.5 3.3 3.0 4.6 0.6 1.4 23.2 20.2 n.a. 0.2 (55.6) n.a. n.a. 43.8 1.5 50.7 Septwolves 002029 CH 10.11 1,142 11.9 4.4 (4.4) 26.9 23.6 1.4 1.4 5.4 5.9 4.3 4.7 17.6 15.1 0.7 0.8 (2.1) 15.8 1.7 41.8 11.1 Net cash Market-weighted average 17.8 1.8 (9.5) 48.8 38.7 11.9 8.3 30.7 26.0 19.9 18.3 32.8 27.9 0.5 0.5 (19.4) 16.8 2.1 52.1 17.8 29.0 Average 14.9 0.6 (9.6) 53.9 41.0 7.9 5.9 19.6 17.5 12.6 12.0 27.8 23.9 0.6 0.5 (21.0) 16.6 2.1 47.9 13.9 31.9 International sportswear footwear and apparel Nike NKE US 56.72 95,557 596.2 2.9 (1.8) 23.5 20.5 7.6 2.9 32.0 34.3 18.7 22.1 15.8 13.9 1.3 1.4 (2.0) 32.2 0.7 46.7 11.7 Net cash Adidas ADS GR 128.60 29,690 105.1 8.9 28.1 29.8 25.6 4.3 3.9 14.8 16.2 8.5 9.5 16.0 14.0 1.5 1.7 7.1 34.6 0.9 47.9 4.6 5.3 Under Armour UA US 40.43 16,793 272.7 5.3 (1.7) 67.2 50.8 8.8 7.6 14.3 15.9 8.0 10.5 28.8 22.1 0.0 0.0 (6.7) 39.7 1.7 47.9 5.5 32.3 Lululemon Athletica LULU US 76.72 10,509 140.9 8.8 25.3 35.8 30.3 8.3 6.9 25.0 23.7 21.9 20.8 20.1 17.7 0.0 0.0 0.4 25.6 1.4 49.7 12.5 Net cash Skecher SKX US 30.79 4,869 83.0 3.5 17.3 14.7 12.4 2.9 2.5 21.0 21.3 17.3 18.2 8.5 7.3 0.0 0.0 0.6 40.7 0.4 45.4 9.0 Net cash Asics Corp 7936 JP 1,694.00 3,312 26.2 (25.1) (11.0) 24.8 17.2 1.5 1.4 6.7 9.6 5.0 6.7 11.3 9.8 1.4 1.4 (29.0) 45.5 0.5 42.0 3.3 5.9 Columbia Sportswear COLM US 59.47 4,143 18.0 4.6 3.0 22.2 20.2 2.7 2.6 12.7 13.1 9.8 10.1 11.6 10.6 1.2 1.2 1.6 14.7 1.5 46.4 7.7 Net cash Puma PUM GR 204.00 3,395 0.8 (2.7) 5.5 53.2 35.5 1.8 1.8 3.6 5.3 3.8 6.0 15.7 12.6 0.3 0.5 (0.5) 79.7 0.7 45.6 1.6 Net cash Abercrombie & Fitch ANF US 19.09 1,291 68.7 1.8 (31.4) 22.5 17.9 1.0 1.0 4.0 5.1 2.4 2.7 3.7 3.4 4.2 4.5 (29.8) (3.2) (7.0) 62.1 1.7 Net cash Market-weighted average 394.0 4.0 5.5 30.0 25.0 6.6 3.7 24.7 26.5 15.1 17.5 16.9 14.5 1.1 1.2 (1.3) 33.7 0.8 47.2 9.3 14.4 Average 145.7 0.9 3.7 32.6 25.6 4.3 3.4 14.9 16.1 10.6 11.9 14.6 12.4 1.1 1.2 (6.5) 34.4 0.1 48.2 6.4 14.5

Asia ex-Japan upstream suppliers and manufacturers Shenzhou Int’l 2313 HK 39.75 7,168 16.2 5.6 3.2 17.3 15.4 3.3 3.0 20.9 21.1 14.5 14.9 14.2 12.7 2.8 3.1 0.1 17.2 1.0 31.2 20.0 12.4 Yue Yuen Industrial 551 HK 31.70 6,738 6.7 2.1 17.0 14.3 12.8 1.4 1.3 10.7 11.1 7.1 7.5 8.3 7.6 3.8 4.1 (0.3) 20.7 0.7 23.7 5.6 Net cash Feng Tay Enterprise 9910 TT 146.50 2,714 7.4 12.3 (10.9) 18.6 15.9 5.8 4.9 32.3 32.8 17.5 19.0 11.2 9.5 3.6 4.2 (3.4) 19.4 1.0 21.2 7.5 2.3 Eclat Textile C 1476 TT 302.50 2,527 22.7 (8.6) (24.2) 19.0 15.4 5.6 4.7 32.4 32.8 23.7 25.1 12.7 10.5 3.5 4.1 (13.9) 20.2 0.9 27.9 15.4 Net cash Pacific Textiles 1382 HK 10.18 1,898 2.5 8.5 (1.9) 13.1 12.6 4.4 4.4 32.8 35.0 20.7 21.2 12.6 11.0 7.9 8.2 (6.2) 4.3 3.0 18.8 16.2 Net cash Hansae Co 105630 KS 38,600.00 1,344 0.7 (2.3) (26.5) 13.5 11.5 2.9 2.4 23.9 22.6 11.6 12.3 8.4 7.2 0.6 0.7 (11.3) 27.7 0.5 21.5 6.7 Net cash Regina Miracle Int’l 2199 HK 8.05 1,270 2.6 (25.5) (33.7) 16.3 12.3 3.1 2.5 20.7 22.6 12.5 13.9 10.7 8.4 1.5 1.8 (5.7) n.a. n.a. 25.0 10.1 85.6 Texwinca Holdings 321 HK 5.85 1,042 1.6 (19.0) (21.8) 11.8 11.4 1.3 1.3 11.2 11.4 7.3 7.4 11.0 6.9 10.6 9.4 (26.9) (4.4) (2.7) 34.0 11.2 Net cash Makalot Industrial 1477 TT 150.50 930 8.5 (5.0) (19.1) 14.7 13.0 3.3 3.1 22.1 24.5 15.6 17.1 9.9 8.6 5.9 6.1 (14.6) 9.4 1.6 22.0 8.3 Net cash Texhong Textile 2678 HK 8.47 966 0.4 8.6 6.6 8.4 7.0 1.5 1.3 18.5 19.2 6.0 6.5 5.1 4.5 3.6 4.3 0.0 24.6 0.3 18.0 6.6 52.1 Weiqiao Textile 2698 HK 5.69 876 0.7 2.2 0.5 4.4 2.4 0.3 0.3 7.6 12.9 4.4 7.8 1.1 0.7 6.7 12.6 0.0 n.a. n.a. 5.5 13.7 Net cash Best Pacific Int’l 2111 HK 5.17 684 0.7 (0.4) 16.7 14.1 13.6 2.7 2.4 20.2 18.6 10.1 9.0 8.7 8.2 2.7 2.8 1.8 6.5 2.2 33.1 16.3 Net cash Kingmaker Footwear 1170 HK 1.75 157 0.2 (2.8) (24.2) 8.3 6.7 0.9 0.8 7.4 8.2 1.7 1.9 2.6 2.1 9.1 11.4 0.0 54.5 0.2 15.4 4.9 Net cash Victory City 539 HK 0.39 138 0.7 (2.5) (24.5) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 33.0 Market-weighted average 9.1 1.1 (2.3) 15.2 13.3 3.1 2.8 20.6 21.3 13.0 13.8 10.7 9.3 3.9 4.4 (4.3) 17.3 0.9 25.1 12.1 21.1 Average 5.1 (1.9) (10.2) 13.4 11.5 2.8 2.5 20.0 21.0 11.7 12.6 9.0 7.5 4.8 5.6 (6.2) 18.2 0.8 22.9 11.0 37.1 International fast fashion entities Inditex ITX SM 30.02 103,142 305.0 3.7 6.2 29.2 25.8 7.5 6.7 26.2 26.7 17.5 18.3 17.0 15.2 2.2 2.5 0.0 27.1 1.1 57.5 13.8 Net cash Hennes & Mauritz HMB SS 254.70 49,036 102.1 3.2 (8.7) 21.1 18.7 6.8 6.2 33.2 35.1 22.4 25.4 12.7 11.1 3.9 4.0 (5.5) 8.6 2.4 55.8 10.1 Net cash Fast Retailing 9983 JP 26,845.00 27,840 238.0 (10.0) 0.1 47.0 27.5 3.8 3.5 7.8 13.5 6.3 9.2 15.8 11.5 1.3 1.4 (2.2) 2.3 20.4 47.8 3.2 Net cash Gap Inc GPS US 22.70 9,034 164.0 21.3 (4.3) 12.2 11.1 3.3 3.1 27.7 28.8 9.6 10.2 5.1 5.0 4.0 4.2 (16.1) (12.2) (1.0) 35.0 4.8 Net cash Market-weighted average 235.8 2.4 0.9 28.9 23.5 6.6 5.9 25.3 27.0 16.7 18.4 15.2 13.1 2.6 2.8 (2.5) 16.8 4.2 54.5 10.9 Net cash Average 202.3 4.6 (1.7) 27.4 20.8 5.4 4.9 23.7 26.0 13.9 15.8 12.7 10.7 2.8 3.0 (6.0) 6.5 5.7 49.0 8.0 Net cash Source: Bloomberg consensus, Maybank Kim Eng 4

ANTA Sports Products

FYE 31 Dec FY11A FY12A FY13A FY14A FY15A Key Metrics P/E (reported) (x) 19.9 25.3 26.2 20.3 16.9 Core P/E (x) 19.9 25.3 26.2 20.3 16.9 P/BV (x) 5.4 5.1 4.8 4.4 4.0 P/NTA (x) nm 5.0 4.7 4.3 3.9 Net dividend yield (%) 3.1 2.8 2.8 3.5 4.1

FCF yield (%) 4.0 3.9 3.1 4.3 4.2 EV/EBITDA (x) 7.0 6.3 9.1 11.0 15.1 EV/EBIT (x) 7.4 6.8 9.8 11.7 16.0

INCOME STATEMENT (CNY m) Revenue 8,904.8 7,622.8 7,281.3 8,922.7 11,125.9 Gross profit 3,762.4 2,893.2 3,039.3 4,026.8 5,185.4 EBITDA 2,024.5 1,536.2 1,578.4 2,066.1 2,606.1 Depreciation (67.2) (68.7) (85.0) (101.9) (102.3) Amortisation (20.3) (32.5) (30.1) (31.3) (34.2) EBIT 1,937.1 1,435.0 1,463.3 1,932.9 2,469.6 Net interest income /(exp) 148.6 166.2 187.2 223.8 132.6 Associates & JV 0.0 0.0 0.0 0.0 0.0 Exceptionals 0.0 0.0 0.0 0.0 0.0 Other pretax income 74.4 128.3 102.3 86.0 227.1 Pretax profit 2,160.1 1,729.5 1,752.8 2,242.7 2,829.3 Income tax (436.0) (373.7) (423.2) (510.1) (741.1) Minorities 6.0 2.9 (14.7) (32.3) (47.7) Discontinued operations 0.0 0.0 0.0 0.0 0.0 Reported net profit 1,730.1 1,358.7 1,314.8 1,700.3 2,040.6 Core net profit 1,730.1 1,358.7 1,314.8 1,700.3 2,040.6

BALANCE SHEET (CNY m) Cash & Short Term Investments 4,443.0 5,212.3 5,054.7 6,244.1 6,733.4 Accounts receivable 1,708.6 1,372.8 1,933.1 1,700.7 2,207.2 Inventory 618.1 687.4 689.3 867.2 1,016.1 Property, Plant & Equip (net) 680.2 917.5 935.0 1,067.8 1,165.7 Intangible assets 540.6 528.9 506.9 489.3 464.1 Investment in Associates & JVs 0.0 0.0 0.0 0.0 0.0 Other assets 203.8 1,317.2 999.1 1,014.6 915.4 Total assets 8,194.3 10,036.1 10,118.1 11,383.8 12,502.0 ST interest bearing debt 0.0 996.5 490.2 1,348.3 1,330.0 Accounts payable 1,471.5 1,774.0 1,889.3 1,654.0 1,989.9 LT interest bearing debt 0.0 0.0 0.0 0.0 0.0 Other liabilities 304.0 333.0 390.0 377.0 368.0 Total Liabilities 1,775.8 3,103.4 2,769.0 3,379.2 3,687.7 Shareholders Equity 6,371.9 6,752.2 7,154.0 7,795.2 8,579.7 Minority Interest 46.7 180.5 195.1 209.4 234.6 Total shareholder equity 6,418.6 6,932.7 7,349.1 8,004.6 8,814.2 Total liabilities and equity 8,194.3 10,036.1 10,118.1 11,383.8 12,502.0

CASH FLOW (CNY m) Pretax profit 2,160.1 1,729.5 1,752.8 2,242.7 2,829.3

Depreciation & amortisation 87.5 101.2 115.1 133.2 136.4 Adj net interest (income)/exp 148.6 166.2 187.2 223.8 132.6 Change in working capital (535.6) (433.6) (119.2) (215.1) (230.3)

Cash taxes paid (395.0) (379.7) (360.9) (521.2) (682.9) Other operating cash flow 202.8 1,067.1 (172.8) 106.1 25.5 Cash flow from operations 1,447.6 1,965.0 1,128.1 1,685.9 1,902.9 Capex (65.1) (629.9) (59.9) (189.3) (447.0) Free cash flow 1,382.5 1,335.1 1,068.2 1,496.6 1,455.9 Dividends paid (1,056.9) (973.7) (952.2) (1,208.3) (1,428.0) Equity raised / (purchased) 0.0 0.0 0.1 0.1 0.3 Change in Debt 0.0 996.5 (506.3) 858.0 (18.3) Perpetual securities distribution 0.0 0.0 0.0 0.0 0.0 Other invest/financing cash flow (675.5) (371.4) 730.9 (563.5) 186.2 Effect of exch rate changes (23.0) 2.8 (3.9) 6.5 36.0 Net cash flow (372.9) 989.3 336.7 589.5 232.1

July 13, 2016 5

ANTA Sports Products

FYE 31 Dec FY11A FY12A FY13A FY14A FY15A

Key Ratios Growth ratios (%) Revenue growth na (14.4) (4.5) 22.5 24.7 EBITDA growth na (24.1) 2.7 30.9 26.1 EBIT growth na (25.9) 2.0 32.1 27.8 Pretax growth na (19.9) 1.3 28.0 26.2

Reported net profit growth na (21.5) (3.2) 29.3 20.0 Core net profit growth na (21.5) (3.2) 29.3 20.0

Profitability ratios (%) EBITDA margin 22.7 20.2 21.7 23.2 23.4 EBIT margin 21.8 18.8 20.1 21.7 22.2 Pretax profit margin 24.3 22.7 24.1 25.1 25.4 Payout ratio 60.9 71.6 72.3 71.0 69.9

DuPont analysis Net profit margin (%) 19.4 17.8 18.1 19.1 18.3 Revenue/Assets (x) 1.1 0.8 0.7 0.8 0.9 Assets/Equity (x) 1.3 1.5 1.4 1.5 1.5 ROAE (%) na 20.7 18.9 22.7 24.9 ROAA (%) na 14.9 13.0 15.8 17.1

Liquidity & Efficiency Cash conversion cycle na (1.1) (15.3) 0.3 9.9 Days receivable outstanding na 72.8 81.7 73.3 63.2 Days inventory outstanding na 49.7 58.4 57.2 57.1 Days payables outstanding na 123.5 155.4 130.3 110.4 Dividend cover (x) 1.6 1.4 1.4 1.4 1.4 Current ratio (x) 4.2 2.8 3.2 2.9 2.9

Leverage & Expense Analysis Asset/Liability (x) 4.6 3.2 3.7 3.4 3.4 Net debt/equity (%) net cash net cash net cash net cash net cash Net interest cover (x) na na na na na Debt/EBITDA (x) 0.0 0.6 0.3 0.7 0.5 Capex/revenue (%) 0.7 8.3 0.8 2.1 4.0 Net debt/ (net cash) (4,443.0) (4,215.8) (4,564.5) (4,895.8) (5,403.4) Source: Company; Maybank

July 13, 2016 6

ANTA Sports Products

Research Offices

REGIONAL HONG KONG / CHINA INDONESIA Surachai PRAMUALCHAROENKIT (66) 2658 6300 ext 1470 Sadiq CURRIMBHOY Howard WONG Head of Research Isnaputra ISKANDAR Head of Research [email protected] Regional Head, Research & Economics (852) 2268 0648 (62) 21 8066 8680 • Auto • Conmat • Contractor • Steel (65) 6231 5836 [email protected] [email protected] [email protected] • Oil & Gas - Regional • Strategy • Metals & Mining • Cement WONG Chew Hann, CA Suttatip PEERASUB (66) 2658 6300 ext 1430 Regional Head of Institutional Research Benjamin HO Rahmi MARINA (852) 2268 0632 [email protected] (62) 21 8066 8689 [email protected] (603) 2297 8686 [email protected] • Media • Commerce

• Consumer & Auto [email protected] ONG Seng Yeow • Banking & Finance Regional Head of Retail Research Jacqueline KO, CFA Sutthichai KUMWORACHAI (65) 6231 5839 (852) 2268 0633 [email protected] Aurellia SETIABUDI (66) 2658 6300 ext 1400 [email protected] • Consumer Staples & Durables (62) 21 8066 8691 [email protected] [email protected] • Energy • Petrochem TAN Sin Mui Ka Leong LO, CFA • Property (852) 2268 0630 [email protected] Director of Research Termporn TANTIVIVAT • Consumer Discretionary & Auto Pandu ANUGRAH (65) 6231 5849 [email protected] (66) 2658 6300 ext 1520 (62) 21 8066 8688 [email protected] Mitchell KIM [email protected] ECONOMICS • Property (852) 2268 0634 [email protected] • Infra • Construction • Transport• Telcos Suhaimi ILIAS • Internet & Telcos Chief Economist Janni ASMAN Jaroonpan WATTANAWONG Ning MA (62) 21 8066 8687 (66) 2658 6300 ext 1404 Singapore | Malaysia (852) 2268 0672 [email protected] (603) 2297 8682 [email protected] [email protected] [email protected] • Insurance • Cigarette • Healthcare • Retail • Transportation • Small cap Luz LORENZO Philippines Sonija LI, CFA Adhi TASMIN (63) 2 849 8836 (852) 2268 0641 [email protected] (62) 21 8066 8694 VIETNAM • Gaming [email protected] [email protected] LE Hong Lien, ACCA • Plantations Tim LEELAHAPHAN Stefan CHANG, CFA Head of Institutional Research (84) 8 44 555 888 x 8181 Thailand (852) 2268 0675 [email protected] Anthony LUKMAWIJAYA [email protected] (66) 2658 6300 ext 1420 • Technology – Regional (62) 21 8066 8690 • Strategy • Consumer • Diversified • Utilities [email protected] [email protected] Warren LAU • Aviation JUNIMAN (852) 2268 0644 [email protected] THAI Quang Trung, CFA, Deputy Manager, Chief Economist, BII • Technology – Regional PHILIPPINES Institutional Research Indonesia (84) 8 44 555 888 x 8180 (62) 21 29228888 ext 29682 INDIA Luz LORENZO Head of Research [email protected] [email protected] (63) 2 849 8836 • Real Estate • Construction • Materials Head of Research Jigar SHAH [email protected] STRATEGY (91) 22 6623 2632 [email protected] • Strategy Le Nguyen Nhat Chuyen • Oil & Gas • Automobile • Cement • Utilities • Conglomerates • Telcos (84) 8 44 555 888 x 8082 Sadiq CURRIMBHOY [email protected] Global Strategist Anubhav GUPTA Lovell SARREAL • Oil & Gas (65) 6231 5836 [email protected] (91) 22 6623 2605 [email protected] (63) 2 849 8841 • Metal & Mining • Capital Goods • Property [email protected] NGUYEN Thi Ngan Tuyen, Head of Retail Research Willie CHAN • Consumer • Media • Cement (84) 8 44 555 888 x 8081 Hong Kong / Regional Vishal MODI [email protected] Rommel RODRIGO (852) 2268 0631 [email protected] (91) 22 6623 2607 [email protected] • Food & Beverage • Oil&Gas • Banking (63) 2 849 8839 • Banking & Financials MALAYSIA [email protected] TRINH Thi Ngoc Diep • Conglomerates • Property • Gaming (84) 4 44 555 888 x 8208 WONG Chew Hann, CA Head of Research Abhijeet KUNDU • Ports/ Logistics (91) 22 6623 2628 [email protected] [email protected] (603) 2297 8686 [email protected] • Technology • Utilities • Construction • Strategy • Consumer Katherine TAN (63) 2 849 8843 Desmond CH’NG, ACA Neerav DALAL [email protected] PHAM Nhat Bich (603) 2297 8680 (91) 22 6623 2606 [email protected] • Banks • Construction (84) 8 44 555 888 x 8083 [email protected] [email protected] • Software Technology • Tel co s • Banking & Finance Michael BENGSON • Consumer • Manufacturing • Fishery (63) 2 849 8840 LIAW Thong Jung SINGAPORE (603) 2297 8688 [email protected] [email protected] NGUYEN Thi Sony Tra Mi • Conglomerates • Oil & Gas Services- Regional Gregory YAP (84) 8 44 555 888 x 8084 (65) 6231 5848 [email protected] [email protected] ONG Chee Ting, CA Jaclyn JIMENEZ • SMID Caps • Port operation • Pharmaceutical (603) 2297 8678 [email protected] (63) 2 849 8842 • Technology & Manufacturing • Tel co s • Food & Beverage • Plantations - Regional [email protected] • Consumer Mohshin AZIZ YEAK Chee Keong, CFA TRUONG Quang Binh (603) 2297 8692 [email protected] (65) 6231 5842 THAILAND (84) 4 44 555 888 x 8087 • Aviation - Regional • Petrochem [email protected] [email protected] • Offshore & Marine YIN Shao Yang, CPA Maria LAPIZ Head of Institutional Research • Rubber plantation • Tyres and Tubes • Oil&Gas Dir (66) 2257 0250 | (66) 2658 6300 ext 1399 (603) 2297 8916 [email protected] Derrick HENG, CFA [email protected] • Gaming – Regional • Media (65) 6231 5843 [email protected] • Consumer • Materials • Ind. Estates TAN Chi Wei, CFA • Transport • Property • RE ITs (Office) (603) 2297 8690 [email protected] Joshua TAN Sittichai DUANGRATTANACHAYA • Power • Telcos (65) 6231 5850 [email protected] (66) 2658 6300 ext 1393 WONG Wei Sum, CFA • REITs (Retail, Industrial) [email protected] (603) 2297 8679 [email protected] • Services Sector • Transport • Property John CHEONG, CFA (65) 6231 5845 [email protected] Yupapan POLPORNPRASERT LEE Yen Ling • Small & Mid Caps • Healthcare (66) 2658 6300 ext 1394 (603) 2297 8691 [email protected] [email protected] • Building Materials • Glove • Ports • Shipping Ng Li Hiang • Oil & Gas

CHAI Li Shin, CFA (65) 6231 5840 [email protected] (603) 2297 8684 [email protected] • Banks Tanawat RUENBANTERNG • Plantation • Construction & Infrastructure (66) 2658 6300 ext 1395 [email protected] Ivan YAP • Banks & Diversified Financials (603) 2297 8612 [email protected] • Automotive • Semiconductor • Technology Sukit UDOMSIRIKUL Head of Retail Research (66) 2658 6300 ext 5090 Kevin WONG (603) 2082 6824 [email protected] [email protected] • REITs • Consumer Discretionary Mayuree CHOWVIKRAN LIEW Wei Han (66) 2658 6300 ext 1440 (603) 2297 8676 [email protected] [email protected] • Consumer Staples • Strategy

LEE Cheng Hooi Regional Chartist Padon VANNARAT (603) 2297 8694 (66) 2658 6300 ext 1450 [email protected] [email protected] Tee Sze Chiah Head of Retail Research • Strategy (603) 2297 6858 [email protected] Cheah Chong Ling (603) 2297 8767 [email protected]

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APPENDIX I: TERMS FOR PROVISION OF REPORT, DISCLAIMERS AND DISCLOSURES

DISCLAIMERS This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from the relevant jurisdiction’s stock exchange in the equity analysis. Accordingly, investors’ returns may be less than the original sum invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report. The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Berhad, its subsidiary and affiliates (collectively, “MKE”) and consequently no representation is made as to the accuracy or completeness of this report by MKE and it should not be relied upon as such. Accordingly, MKE and its officers, directors, associates, connected parties and/or employees (collectively, “Representatives”) shall not be liable for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice. This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”, “intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information currently available to us and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forward-looking statements. MKE expressly disclaims any obligation to update or revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events. MKE and its officers, directors and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law, from time to time participate or invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit business from such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. MKE may, to the extent permitted by law, act upon or use the information presented herein, or the research or analysis on which they are based, before the material is published. One or more directors, officers and/or employees of MKE may be a director of the issuers of the securities mentioned in this report. This report is prepared for the use of MKE’s clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of MKE and MKE and its Representatives accepts no liability whatsoever for the actions of third parties in this respect. This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. This report is for distribution only under such circumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may apply based on geographical location of the person or entity receiving this report. Malaysia Opinions or recommendations contained herein are in the form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis. Singapore This report has been produced as of the date hereof and the information herein may be subject to change. Maybank Kim Eng Research Pte. Ltd. (“Maybank KERPL”) in Singapore has no obligation to update such information for any recipient. For distribution in Singapore, recipients of this report are to contact Maybank KERPL in Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of this report is not an accredited investor, expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), Maybank KERPL shall be legally liable for the contents of this report, with such liability being limited to the extent (if any) as permitted by law. Thailand The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey may be changed after that date. Maybank Kim Eng Securities (Thailand) Public Company Limited (“MBKET”) does not confirm nor certify the accuracy of such survey result. Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the prior written permission of MBKET.

MBKET accepts no liability whatsoever for the actions of third parties in this respect. US This third-party research report is distributed in the United States (“US”) to Major US Institutional Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) only by Maybank Kim Eng Securities USA Inc (“Maybank KESUSA”), a broker-dealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended). All responsibility for the distribution of this report by Maybank KESUSA in the US shall be borne by Maybank KESUSA. All resulting transactions by a US person or entity should be effected through Maybank Kim Eng Securities USA Inc. This report is not directed at you if it is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it that Maybank KESUSA is permitted to provide research material concerning investments to you under relevant legislation and regulations. UK This document is being distributed by Maybank Kim Eng Securities (London) Ltd (“Maybank KESL”) which is authorized and regulated, by the Financial Services Authority and is for Informational Purposes only. This document is not intended for distribution to anyone defined as a Retail Client under the Financial Services and Markets Act 2000 within the UK. Any inclusion of a third party link is for the recipients convenience only, and that the firm does not take any responsibility for its comments or accuracy, and that access to such links is at the individuals own risk. Nothing in this report should be considered as constituting legal, accounting or tax advice, and that for accurate guidance recipients should consult with their own independent tax advisers.

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DISCLOSURES

Legal Entities Disclosures Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938-H) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This material is issued and distributed in Singapore by Maybank KERPL (Co. Reg No 197201256N) which is regulated by the Monetary Authority of Singapore. Indonesia: PT Kim Eng Securities (“PTKES”) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM LK. Thailand: MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission. Philippines: Maybank ATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange

Commission. Vietnam: Maybank Kim Eng Securities JSC (License Number: 71/UBCK-GP) is licensed under the State Securities Commission of Vietnam.Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (“KESI”) is a participant of the National Stock Exchange of India Limited (Reg No: INF/INB 231452435) and the Bombay Stock Exchange (Reg. No. INF/INB 011452431) and is regulated by Securities and Exchange Board of India. KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM 000011708) US: Maybank KESUSA is a member of/ and is authorized and regulated by the FINRA – Broker ID 27861. UK: Maybank KESL (Reg No 2377538) is authorized and regulated by the Financial Services Authority.

Disclosure of Interest Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies.

Singapore: As of 13 July 2016, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report.

Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the research report. Therefore, Investors should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connected parties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report.

Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.

As of 13 July 2016, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.

MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment and may receive compensation for the services provided from the companies covered in this report.

OTHERS Analyst Certification of Independence The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the subject securities or issuers; and no part of the research analyst’s compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

Reminder Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its own professional advisers as to the risks involved in making such a purchase.

No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.

Definition of Ratings

Maybank Kim Eng Research uses the following rating system BUY Return is expected to be above 10% in the next 12 months (excluding dividends) HOLD Return is expected to be between - 10% to +10% in the next 12 months (excluding dividends) SELL Return is expected to be below -10% in the next 12 months (excluding dividends)

Applicability of Ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies.

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 Malaysia  Singapore  London  New York

Maybank Investment Bank Berhad Maybank Kim Eng Securities Pte Ltd Maybank Kim Eng Securities Maybank Kim Eng Securities USA (A Participating Organisation of Maybank Kim Eng Research Pte Ltd (London) Ltd Inc Bursa Malaysia Securities Berhad) 50 North Canal Road PNB House 777 Third Avenue, 21st Floor 33rd Floor, Menara Maybank, Singapore 059304 77 Queen Victoria Street New York, NY 10017, U.S.A. 100 Jalan Tun Perak, London EC4V 4AY, UK 50050 Kuala Lumpur Tel: (65) 6336 9090 Tel: (212) 688 8886 Tel: (603) 2059 1888; Tel: (44) 20 7332 0221 Fax: (212) 688 3500 Fax: (603) 2078 4194 Fax: (44) 20 7332 0302

Stockbroking Business:  Hong Kong  Indonesia  India Level 8, Tower C, Dataran Maybank, Kim Eng Securities (HK) Ltd PT Maybank Kim Eng Securities Kim Eng Securities India Pvt Ltd No.1, Jalan Maarof Level 30, Sentral Senayan III, 22nd Floor 2nd Floor, The International, 59000 Kuala Lumpur Three Pacific Place, Jl. Asia Afrika No. 8 16, Maharishi Karve Road, Tel: (603) 2297 8888 1 Queen’s Road East, Gelora Bung Karno, Senayan Churchgate Station, Fax: (603) 2282 5136 Hong Kong Jakarta 10270, Indonesia Mumbai City - 400 020, India

Tel: (852) 2268 0800 Tel: (62) 21 2557 1188 Tel: (91) 22 6623 2600 Fax: (852) 2877 0104 Fax: (62) 21 2557 1189 Fax: (91) 22 6623 2604

 Philippines  Thailand  Vietnam  Saudi Arabia Maybank ATR Kim Eng Securities Inc. Maybank Kim Eng Securities Maybank Kim Eng Securities Limited In association with 17/F, Tower One & Exchange Plaza (Thailand) Public Company Limited 4A-15+16 Floor Vincom Center Dong Anfaal Capital Ayala Triangle, Ayala Avenue 999/9 The Offices at Central World, Khoi, 72 Le Thanh Ton St. District 1 Villa 47, Tujjar Jeddah Makati City, Philippines 1200 20th - 21st Floor, Ho Chi Minh City, Vietnam Prince Mohammed bin Abdulaziz Rama 1 Road Pathumwan, Street P.O. Box 126575 Tel: (63) 2 849 8888 Bangkok 10330, Thailand Tel : (84) 844 555 888 Jeddah 21352 Fax: (63) 2 848 5738 Fax : (84) 8 38 271 030 Tel: (66) 2 658 6817 (sales) Tel: (966) 2 6068686 Tel: (66) 2 658 6801 (research) Fax: (966) 26068787

 South Asia Sales Trading  North Asia Sales Trading Kevin Foy Andrew Lee Regional Head Sales Trading [email protected] [email protected] Tel: (852) 2268 0283 Tel: (65) 6336-5157 US Toll Free: 1 877 837 7635 US Toll Free: 1-866-406-7447

Malaysia Thailand Rommel Jacob Tanasak Krishnasreni [email protected] [email protected] Tel: (603) 2717 5152 Tel : (66)2 658 6820

Indonesia Harianto Liong [email protected] Tel: (62) 21 2557 1177

New York India Andrew Dacey Manish Modi [email protected] [email protected] Tel: (212) 688 2956 Tel : (91)-22-6623-2601

Vietnam Philippines Tien Nguyen Keith Roy [email protected] [email protected] Tel: (84) 44 555 888 x8079 Tel : (63) 2 848-5288 www.maybank-ke.com | www.maybank-keresearch.com

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