The Apparel Industry Has Not Yet Come Out Of The Trough, And Its Operating Margins Have Not Reached A High Level.

< p > by Anta, Merrill Lynch, UBS and other major companies optimistic about the prospects for the revival of sporting goods stocks in mainland China, Anta sports (02020.hk) and many other mainland sporting goods stocks rose yesterday, and overall outperformed the big market, with an average increase of nearly 5% on that day.

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< p > as of yesterday's close, Anta sports news hk $8.49, up 6.79%, the stock hit 8.74 Hong Kong dollars, refresh a 52 week high record; Lining (02331.hk) rose 6.73% to 4.44 Hong Kong dollars, recovered 50 days and 100 days average, and XTEP (01368.hk) increased 4.8% to HK $3.31.

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< p > mein Merrill said in its latest research report that Anta sports is expected to become the first mainland sporting goods company to restore revenue growth.

The bank pointed out that although the mainland's consumer confidence is still weak, it is expected that the same quarter sales growth of Anta in the two quarter is the same as that in the first quarter, and it is expected to remain unchanged.

As the company forecasts a price earnings ratio of 9 times and the expected dividend yield of 5%, Merrill Lynch believes that the market underestimates the value of Anta sports.

At the same time, as the company's replenishment orders can bring additional sales, gross margin will also be raised, and the bank expects its profitability to be improved.

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< p > Credit Suisse also believes that Anta sports may be the first enterprise in the industry to see the distributors obviously request to increase orders in the mainland sports "a target=" _blank "href=" //www.sjfzxm.com/ "clothing" /a ".

According to Credit Suisse, although the market is still uncertain, it is believed that the order amount reached by Anta sports has reached the upper limit of the order meeting announced earlier. The bank believes that Anta has been prudent in its operating expenses control at the beginning of this year, especially advertising and publicity expenses, so the market is too conservative in its forecast of 28% year-on-year profit growth this year.

However, the views of foreign investment banks on mainland sporting goods stocks are not one-sided.

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Goldman Sachs pointed out in its research report that after experiencing the super cycle of high growth, the mainland retail industry is now facing the slowdown of demand growth and intensified competition, and the market share is eroded by the new retail mode (such as online purchase or overseas mail). P

Most mainland retailers do not have enough pricing power to offset rising costs, so the industry's profits and returns are likely to face downward pressure.

On the sporting goods sector, although the inventory situation of the relevant companies has improved, it is expected that the mid end demand is still weak, especially clothing inventory will limit the level of industry growth, so the industry is still not out of the trough, and the operating profit margin is not expected to remain at a high level.

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