HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports Products (2020 HK)</a> achieved a decent 3Q23 with sales performance of major brands outperformed. With a low comparison base, 4Q23 sales will be even more impressive. </li>
<li>Indications are that sales for the Golden Week are satisfactory and "double-11" sales are optimistic. The acquisition of MAIA ACTIVE will further add to its product portfolio.</li>
<li>Amer's IPO is another catalyst and reports are that this has been filed in the US. Anta Sports' stake may be valued at US$4bn, almost 12% of its market cap.</li>
</ul>



Anta Sports Products (2020 HK) achieved a decent 3Q23 with sales performance of major brands outperformed. With a low comparison base, 4Q23 sales will be even more impressive. 
Indications are that sales for the Golden Week are satisfactory and "double-11" sales are optimistic. The acquisition of MAIA ACTIVE will further add to its product portfolio.
Amer's IPO is another catalyst and reports are that this has been filed in the US. Anta Sports' stake may be valued at US$4bn, almost 12% of its market cap.


Anta Sports (2020 HK): Bucking the Challenging Trend

Analyst

Steve

<ul>
<li>
<a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports Products (2020 HK)</a> announced a set of strong 3Q23 operating data yesterday after market close.</li>
<li>Both Anta and Fila brands performed well in a challenging macro environment in China in 3Q23, with 3Q22 being a high base.  </li>
<li>Another bright spot is that other brands outside of Anta and Fila grew 45-50% yoy in 3Q23, with Descente up 40-45% yoy and Kolon up 65-70% yoy.</li>
</ul>



Anta Sports Products (2020 HK) announced a set of strong 3Q23 operating data yesterday after market close.
Both Anta and Fila brands performed well in a challenging macro environment in China in 3Q23, with 3Q22 being a high base.  
Another bright spot is that other brands outside of Anta and Fila grew 45-50% yoy in 3Q23, with Descente up 40-45% yoy and Kolon up 65-70% yoy.


Anta Sports (2020 HK):  Strong 3Q23 Update

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Quantitative Analysis

<ul>
<li>An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.</li>
<li>The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.</li>
<li>Developed over roughly 4 years and implemented in its current state for over 3 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.</li>
</ul>


An overview (and output) of our machine learning-driven GEM screening model, which seeks to find the best medium-term long ideas within the top 100 stocks in the MSCI GEM Index.
The model is based on 1) a quantitative multifactor screening model, enhanced by two AI Technology-based approaches; 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model.
Developed over roughly 4 years and implemented in its current state for over 3 years, the model has a solid real-world alpha-generating performance track record, discussed in detail below.


<ul>
<li>Since my bearish insight on August 11 (<a href="https://www.smartkarma.com/insights/li-ning-2331-hk-low-quality-earnings-beat" target="_blank" data-smartkarma-citation="insights:110159" rel="noopener">Li Ning (2331 HK):  Low Quality Earnings Beat</a>), Li Ning's share price has declined by 27% in less than 2 months.</li>
<li>Anta's share price on the other hand has been flat during the same time frame (<a href="https://www.smartkarma.com/insights/anta-sports-2020-hk-most-resilient-in-industry-down-cycles" target="_blank" data-smartkarma-citation="insights:111097" rel="noopener">Anta Sports (2020 HK):  Most Resilient In Industry Down-Cycles</a>).</li>
<li>In this insight, we look at if there are now any positive catalysts on the name, given the steep share price decline.</li>
</ul>


Since my bearish insight on August 11 (Li Ning (2331 HK):  Low Quality Earnings Beat), Li Ning's share price has declined by 27% in less than 2 months.
Anta's share price on the other hand has been flat during the same time frame (Anta Sports (2020 HK):  Most Resilient In Industry Down-Cycles).
In this insight, we look at if there are now any positive catalysts on the name, given the steep share price decline.


Li Ning (2331 HK):  No Positive Catalysts In Sight

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Four years after Itochu got to 40.0% of votes in Descente (8114) in a hostile Tender Offer, Descente partner ANTA, which supported Itochu at the time started selling its stake.</li>
<li>A few months later, Itochu started buying shares of Descente in the market. As of 7 Sep, Itochu had bought Descente shares 81 days straight (9.7% of ADV).</li>
<li>This begs the question: Is Itochu ensuring they maintain voting control as ANTA sells? Or are they buying to lift their stake prior to another bid?</li>
</ul>


Four years after Itochu got to 40.0% of votes in Descente (8114) in a hostile Tender Offer, Descente partner ANTA, which supported Itochu at the time started selling its stake.
A few months later, Itochu started buying shares of Descente in the market. As of 7 Sep, Itochu had bought Descente shares 81 days straight (9.7% of ADV).
This begs the question: Is Itochu ensuring they maintain voting control as ANTA sells? Or are they buying to lift their stake prior to another bid?


Itochu Buying Descente (8114) - ANTA Selldown Offset Or Creeping Takeover?

China

ANTA Sports Products Limited designs, develops, manufactures, and markets sportswear, including sports footwear and apparel for professionals and the general public.

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Anta Sports Products (2020 HK)

Anta Sports (2020 HK): Bucking the Challenging Trend

Anta Sports had a solid 3Q23, with major brand sales outperforming. 4Q23 sales are expected to be even better. Acquisition of MAIA ACTIVE and...

Osbert Tang, CFA

Anta Sports (2020 HK): Strong 3Q23 Update

Anta Sports reports strong 3Q23 operating data, with both Anta and Fila brands performing well despite challenging macro conditions. Other brands...

Steve

Screening for GEMs: October 2023

This insight provides an overview of our, machine learning-driven, proprietary GEM screening model, based on a Multifactor model, a Deep Neural...

Wium Malan, CFA

Li Ning (2331 HK): No Positive Catalysts In Sight

The share price of Li Ning has declined by 27% in less than 2 months, while Anta's share price has remained flat. We look at if there are any...

Steve

Itochu Buying Descente (8114) - ANTA Selldown Offset Or Creeping Takeover?

ANTA went below 5% in Descente in April. Itochu started buying in May. As of 7 Sep, they had bought 81 days straight, accumulating 3.1%. There are...

Travis Lundy

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Anta Sports (2020 HK): Bucking the Challenging Trend

​Anta Sports had a solid 3Q23, with major brand sales outperforming. 4Q23 sales are expected to be even better. Acquisition of MAIA ACTIVE and...

Osbert Tang, CFA

Anta Sports (2020 HK): Strong 3Q23 Update

​Anta Sports reports strong 3Q23 operating data, with both Anta and Fila brands performing well despite challenging macro conditions. Other brands...

Steve

Screening for GEMs: October 2023

This insight provides an overview of our, machine learning-driven, proprietary GEM screening model, based on a Multifactor model, a Deep Neural...

Wium Malan, CFA

Li Ning (2331 HK): No Positive Catalysts In Sight

​The share price of Li Ning has declined by 27% in less than 2 months, while Anta's share price has remained flat. We look at if there are any...

Steve

Itochu Buying Descente (8114) - ANTA Selldown Offset Or Creeping Takeover?

ANTA went below 5% in Descente in April. Itochu started buying in May. As of 7 Sep, they had bought 81 days straight, accumulating 3.1%. There are...

Travis Lundy

Anta Sports had a solid 3Q23, with major brand sales outperforming. 4Q23 sales are expected to be even better. Acquisition of MAIA ACTIVE and...

Anta Sports reports strong 3Q23 operating data, with both Anta and Fila brands performing well despite challenging macro conditions. Other brands...

The share price of Li Ning has declined by 27% in less than 2 months, while Anta's share price has remained flat. We look at if there are any...