Is ANTA Sports Products (SEHK:2020) Still Undervalued After Its Retail Sales Update?

ANTA Sports Products (SEHK:2020) drew investor attention after a new trading statement showed low to mid single digit retail sales growth for its core ANTA and FILA brands, alongside stronger gains in its other brands.

See our latest analysis for ANTA Sports Products.

The trading statement appears to have supported a short term rebound in sentiment, with ANTA Sports Products posting a 1 month share price return of 8.16% and a 3 month share price return that is still down 10.74%. The 1 year total shareholder return is down 14.79%, which points to momentum that has recently picked up after a weaker period.

If this update has you rethinking where growth could come from next, it may be worth broadening your watchlist using the 108 top founder-led companies

ANTA Sports Products appears to be a solid multi brand sports business based on recent sales data. However, after the rebound in the share price, investors may want to consider whether the stock still offers value or whether the market has already priced that in.

Most Popular Narrative: 26.7% Undervalued

Against a last close of HK$76.85, the most followed narrative for ANTA Sports Products points to a fair value in the low HK$100s, built on detailed growth and margin assumptions rather than short term sentiment.

The analysts have a consensus price target of HK$104.78 for ANTA Sports Products based on their expectations of its future earnings growth, profit margins and other risk factors.

However, there is a degree of disagreement amongst analysts, with the more bullish ones expecting earnings as high as CN¥20.5 billion.

Read the complete narrative.

Want to see what sits behind that valuation gap? The narrative leans on steady revenue compounding, firmer margins and a richer future earnings multiple than the market is pricing in today.

Result: Fair Value of HK$104.78 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ANTA Sports Products still faces pressure from higher operating costs and softer consumer confidence in China, which could limit how much of that valuation gap closes.

Find out about the key risks to this ANTA Sports Products narrative.

Another View on ANTA Sports Products Valuation

While the analyst narrative focuses on earnings forecasts and a future P/E of 18.7x, the current market is already pricing ANTA Sports Products at a P/E of 13.7x, compared with 8.5x for the Hong Kong Luxury industry, 11.9x for peers, and a fair ratio of 10.4x. That premium suggests investors are paying more at present, so how comfortable are you with that additional valuation risk?

See what the numbers say about this price in our valuation breakdown See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With sentiment on ANTA Sports Products clearly mixed, it helps to look at the full picture for yourself and decide quickly where you stand. You can start with the 3 key rewards and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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