Anta Sports Products reported on Wednesday a 260 per cent jump in last year's profit to 537.8 million yuan (HK$590.5 million). But despite its rapid growth, some have begun asking: What lies beyond the Beijing Olympic Games for this Fujian sportswear maker that started as a family-style sports shoe workshop?
Analysts who have seen how the company benefited from the pre-Olympics domestic sports spending binge now urge caution over its outlook from next year, arguing it remains to be seen whether the No 2 domestic sportswear brand will be able to grab more market share from arch-rival Li Ning while fending off smaller competitors after the Olympics, when sales growth is expected to slow.
The relatively high valuation of the entire sportswear industry could also turn away investors and spark a sell-off when prospects are not as rosy, analysts say.
'The sector is entering new untested grounds in the post-Olympic year of 2009, where uncertainty lingers with regards to demand and supply,' Credit Suisse analyst Catherine Lim said in a recent report. 'The outlook for 2008 is intact but 2009 warrants more caution that drives our revisions.'
Ms Lim revised down her next year's forecast for Anta 'on lower sales projections' - she estimates a 9 per cent drop - while raising her margin assumptions 2 per cent just to stay on the side of conservatism.
Domestic consumption largely depends on personal income levels and economic conditions. And the domestic environment has been good for sportswear sales, which have been logging double-digit growth since 2000.