May 30, 2019 Anta Sports Products (ANIT.HK)
Tristan d'Aboville, Executive Director - Research Bloomberg Ticker 2020 HK Analyst [email protected] Buy Price (03/13/2019) HKD 49.20 +44 20 3178 7125 Remove Price HKD 46.95 Change -4.57%
O'Neil Rankings Company Information EPS Rank 97 Market cap USD 16.06 bil RS Rating 91 52-week high/low HKD 59/29 Datagraph Rating 74 P/E 29 Composite Rating 99 50-day avg vol 5.89 mil Acc/Dist Rating C+ FY 2018 ROE 28 SMR Rating A 3/5 year rev growth 29%/25% 3/5 year EPS growth 23%/22%
Anta Sports (ANIT.HK), established in 1994, is the largest Chinese sports brand and third largest in China's sportswear market (after Nike (NKE) and Adidas (ADS.DE)), with an 11% market share. The Company operates solely in mainland China.
Anta sells its products under six major brands. As of 2018, Anta (60%) and Fila (35%) together contributed a majority of sales.
O’Neil Methodology
We are removing Anta from our Focus List after it broke below its 50-DMA and is trading marginally above its 100- DMA on May 30. Shares closed at HKD 46.95, losing 5.53%. The stock's A/D Rating fell to -7 from 10 three weeks ago and its Up Down Volume ratio declined from 1.9 to 0.9 during the same period. It now has an A/D Rating of C- and its RS line is sloping downward. The stock is down 3% after it broke out of a cup-with-handle base on March 3. The next support level is HKD 46.8 (100-DMA).
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Commentary
The stock declined more than 5% on May 30 on the news that short seller Soren Aandhal (founder of Blue Orca Capital) has questioned the Company’s accounting and corporate governance. Hong Kong’s Hang Seng (HSI) index is in a Downtrend as well, losing 0.44% on May 30 on the back of trade war tensions between the U.S and China. These macroeconomic factors are now acting as a headwind for the apparel market and the wider Hong Kong market, on top of which company-specific news is dragging down Anta shares. Even though no clear factors have arisen to confirm that the Company’s long-term outlook is in jeopardy, its technicals are weak. The stock's price slump is expected to be temporary. We will revisit the stock once its technicals improve and it moves upward from support and crosses its 50-DMA.
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