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Order falling inventory is too much trouble
However, when the World Bank changed its time, the current London Olympics coincided with the deteriorating debt crisis in Europe and the weak economy in the United States. Even in the difficult period of economic slowdown in Mainland China, sporting goods companies are generally “order down and stocks are too highâ€. Struggling in adversity. As of last Friday, among the many sporting goods stocks listed in Hong Kong, the five stocks have fallen sharply this year, falling by 51% for Anta, followed by China Dongxiang (3818) and Peak Sports (1968). They fell 49% and 43% respectively.
Five sports stocks are inserted in water
Most investors are concerned about the sporting goods sector and believe that even if they inject Lenovo into this “stimulantâ€, the sector will be difficult to get up and there will be no short-term speculation. Umang Pabaru, head of market research firm Nielsen Greater China’s business development department, said that Mainland consumers’ concern about the London Olympics cannot be compared to the Beijing Olympics not only because of the time difference between London and Beijing, but also because “the Beijing Olympics are held in their own homes, with a sense of participation. It is different from the London Olympics."
When Kou Yinbin, the chief operating officer of KGI Asia, accepted an interview with Hong Kong Wen Wei Po, he also said that the sports sector is still in a downturn cycle and that investors are totally “uninterested†and do not have to maintain an excessively embarrassed mentality. He said that the first reason is that this Olympic venue is in London. For several major sporting goods companies that have taken root in the mainland market, this event is “too far awayâ€. Even if it takes a short time, it will only have a two or three-day effect. I believe the Olympics. During the period the overall performance of the sector will still "underperform the market."
Prospects are difficult to attract investors
Second, the long-term prospects of the sports sector are also doubtful. Min Minbin pointed out that although the mainland market is huge, the competition has become increasingly fierce. These sporting goods companies have developed and expanded too quickly in recent years. The inventory volume has risen sharply, while the brand effect has not increased and has brought about many serious problems. He estimated that the stock price of Lenovo may not continue to plummet afterwards, but it will continue to run at the bottom for quite some time to come. The entire industry needs to rebrand and reposition itself, and speed up business restructuring if such measures are closed. To the effect, the stock price is expected to gradually rise slowly.
China's five major brand orders drop sharply
In 2008, Beijing Olympics had brought wave after wave of sports boom. As a result, the industry and stock prices of mainland sportswear companies have reached record highs. However, it also revealed that the inventory is too large, the speed of expansion is too fast, and the number of stores is excessive. And the product homogeneity is too high and a series of problems. The five major sporting goods companies listed in Hong Kong have performed orders this year that are lower than last year, and all three companies expect that full-year earnings will be affected.
Li Ning Anta Picks Successive Profits
Li Ning recently issued the first profit warning, and revealed that its 2012 annual fair data show that the total orders will record a high double-digit percentage decline, plus the next few years, the promotion costs will significantly increase and other factors, 2012 The net profit for the first half of the year and this year will show a larger year-on-year decline. Among them, the amount of orders for footwear products decreased by an annual average of a low double-digit, while the annual decline of apparel products exceeded 20%.
The ANTA Announcement also disclosed that the amount of orders for the 4th quarter 2012 shopping fair which ended in April recorded a low double-digit percentage drop, and that the total order amount (calculated by wholesale value) for the annual sales meeting was even higher. Decline in percentages. The announcement also stated that the degree of fierce competition in the Mainland market "has affected the Group's retailers' profitability over the past few quarters." Peak Sports also issued a profit warning. It is expected that the consolidated net profit for the six months ended June 30, 2012 and the year ending December 31 will be significantly lower year-on-year, due to industry inventory adjustments and weak economic conditions. The demand for sporting goods has a negative impact.
Relatively speaking, Xtep International (1368) performed significantly better. At the order meeting held in Xiamen in April of this year, the order amount recorded a growth in the number of single units, but compared with the 24% increase in the same period of last year, Not the same language. The data of 361 Degrees International (1361) also barely maintained “decentâ€, and announced that at the winter 2012 trade fair, the total number of adult product orders (by wholesale price) rose by 2% year-on-year, but compared with the 27% increase in 2011. It also recorded a serious setback.
Clean up the inventory
Analysts and the industry generally believe that from the recent order figures, the top five brands are not optimistic about this year and the situation before the first half of 2013. JP Morgan analyst Yang Lei expects that in the next 6-12 months, the entire industry will still face the severe challenges of inventory clearance. According to similar experience of international brands, it usually takes 12-18 months for inventory to return to normal levels. Hai Tong Securities industry analyst Wang Yuwen also believes that the current domestic brand inventory war has not eased, "the ratio of inventory to sales (inventory and sales ratio) should be normally 3-4 months, and Li Ning is still 9 months, which is equal to Clear inventory for a year ago."
Outside the enemy's ranks
With international brands such as Nike and Adidas rushing into the second and third tier cities in the Mainland, local small and medium-sized brands have begun to face an even worse situation. Analysts generally believe that the entire industry is about to stage a series of fierce "defeat and weaken" ring games. It is expected that small and medium-sized and second-tier brands will be subject to greater challenges, and eventually will be reduced from the current 20 companies to 5-6.
Foreign brand-name second and third-tier cities
Reuters quoted Beijing's Champ as consulting analyst Li Hongxian pointed out that 60%-70% of local brand revenue comes from second-tier and third-tier cities, and the product is in the mid-price range. However, in recent years, the spending power of residents in the second and third tier cities in the Mainland has continued to increase. Nike and Adidas have seen the opportunities, established more stores and developed mid-priced products to rob customers, making local brands more indigestible. “Because prices are similar, International brands are certainly more attractive." She believes that the mainland market will enter a period of accelerating the survival of the fittest and the brand concentration in the future will become higher and higher.
Domestic brands stay weak and stay strong
Huixi Group researcher Zhou Xiucheng also stated that the increase in consumer purchasing power has caused local brands to suffer a “head-on†blow and market share is gradually losing, while the share of foreign brands is increasing. He also believes that local brands will usher in the wave of integration. The first step is to integrate distribution networks, including slowing opening new stores, closing down inefficient branches, etc.; followed by brand integration, small and medium-sized brands may become acquisitions. aims. "Listed companies generally have better financial capabilities. If they are synergies, product structures, or geographic complementarities, they will consider acquiring smaller networks or brands."
Ding Shuibo, president of Xtep International (1368), also recently admitted that the industry's trend is "big fish eat small fish, long-term development must be like this." However, he believes that it may not be possible to see larger brands merged within three years.
Guotai Junan issued a report stating that due to industry consolidation and uncertain prospects, the valuation of sporting goods companies has been suppressed. Although in the long run, the growth prospects of the industry are still good, whether it is the price-earnings ratio or the book value ratio, the current valuation of peers in the Mainland Both are less than well-known overseas brands such as Nike and Adidas. The report predicts that mainland sporting goods companies are going through the “difficult period†but it is expected that industry consolidation will be completed by the end of this year.
The London Olympics will be opened on Friday (July 27). Global sports fans will soon appreciate the "higher, faster and stronger" competitions. However, sports stocks listed in Hong Kong have entered the "more The incompetent, weaker, and more crippled cycle, the stock price is appalling, contrasts with it. The analysis generally believes that the mainland sportswear industry is facing the increasingly fierce competition in the domestic market and the dilemma of overseas brands. In the short-term, the stock price has not yet bottomed out. Even if there are Olympic factors, it will not be able to rise. It will continue to linger at the bottom for a long time.
In 2008, the sporting goods industry ushered in a period of rapid growth, especially Li Ning, the "leading player". Under the aura of the Olympics torch that was personally ignited by the gymnastic prince, the stock price skyrocketed and it became the largest in 2009. During the same period, share prices rose at least 80%, of which Anta (2020) performed the most, increasing. More than 3 times higher. The entire sporting goods section can be used as a "chicken dog to ascend to heaven". Whether it is short-term speculators or long-term investors, they all earn "full pockets" at that time and become the biggest beneficiaries of the Beijing Olympics effect.