Sports brand's profits exceed expectations
A combination of strong brand recognition, new products and strategic distribution network expansion helped leading mainland sportswear producer Anta Sports Products deliver a 66.4 per cent jump in full-year profits. The company's net profit for the year to December was 894.8million yuan (HK$1 billion), exceeding the mean estimate of 821.77million yuan, predicted by more than a dozen analysts polled by Thomson Reuters.
According to Anta Sports company secretary and chief financial officer Paul Ling Shing-ping, 2008 achievements and results met the company's expectations. 'Our strong growth can be attributed to our turnover which grew by nearly 55 per cent,' said Mr Ling. Turnover rose to 4.63 billion yuan from 2.99 billion yuan the previous year. He said sufficient cash flow had allowed the company to pay a final dividend of 10 HK cents and a special dividend of 8 HK cents, which represented 68.6 per cent of profits returned to shareholders.
Noting that competition in the Chinese sportswear product market was stiff, Mr Ling said against such a backdrop Anta had achieved strong growth, which had a direct relationship with its brand-building strategy. Mr Ling said Anta could become more competitive if it could continue to grow in challenging circumstances.
Anta, as part of its brand building strategy, places emphasis on integrating promotion initiatives through sports leagues, sponsorships, featured products and endorsing athletes. The company's sponsored sports include basketball, table tennis, tennis, marathon running and volleyball.
'At a time when many businesses are facing serious cost pressures we have managed to reduce our average costs by exerting tighter control on the supply chain management. We have also focused on strengthening our brand desirability and support services to distributors. We have invested in our brand management and product innovation. We see this as prudently managing our business and sticking to our core philosophy of providing value-for-money products. Our effective management of distribution allows us to respond quickly to market demand and changes,' Mr Ling said.
A pragmatic attitude and high efficiency in management are also crucial and play an instrumental role in the company's development strategies. Since listing on the Hong Kong stock exchange in 2007, the company has been building a concrete foundation designed to support future development.