Finland unit Amer’s US$1 billion New York IPO to help Chinese sportswear maker Anta chase down likes of Nike, Adidas at home
- Steady surge in Amer’s China sales might threaten regional market shares of Nike and Adidas, Bloomberg analyst says
- Finland-based Amer, in which Anta has a 52.7 per cent stake, might be valued at as much as US$10 billion after the stock offering
Anta led a consortium that bought out Amer for US$5.2 billion in 2019, diversifying Anta’s product range that mainly featured athletic apparel and trainers.
“Anta’s 45 per cent representation on Amer’s enlarged board of directors raises the chance that China will keep driving revenue gains for the subsidiary after it lists,” said Catherine Lim, an analyst at Bloomberg Intelligence.
“A steady surge in Amer’s China sales might threaten regional market shares of Nike and Adidas.”
Moreover, the Amer IPO comes at a time when investment banks including Citigroup say that Anta might face headwinds from increasing rivalry and marketing costs linked to the Paris Olympic Games this year. Anta’s margins will face challenges, as peers from Li Ning to Xtep International Holding hasten campaigns to clear their inventories, which have been building up amid weak consumer spending in China, Citigroup said.
Amer might be crucial for Anta to ride out this tough environment, as its products make up a niche market that does not directly compete with the likes of Li Ning. The company, which registered an annual compound growth rate of 20.4 per cent from 2020 to 2022, highlighted the growth potential of the Chinese market in its listing prospectus.
Amer is aiming for sales worth about 10 billion yuan (US$1.4 billion) in China by 2025 and will focus on China’s market, direct sales and apparel and shoes as its major drivers for business growth, according to Tang Jiarui, an analyst at Everbright in Shanghai.
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Amer posted a net loss of US$113.9 million for the first nine months of 2023, mainly due to goodwill impairment write-offs, while revenue increased 30 per cent from a year earlier to US$3.05 billion, according to the data provided by Anta.
Anta’s shares dropped 0.2 per cent to HK$70.15 in Hong Kong on Friday, capping a 7.4 per cent decline for the first week of the new year. The stock tumbled 26 per cent in 2023, while peer Li Ning dropped by 69 per cent and the Hang Seng Index fell by 14 per cent.
The Chinese sportswear maker has a good track record of integrating acquired foreign brands into local markets to expand its market share. Fila, the Italian premium sportswear brand it acquired in 2009, has now become a pillar of its business, contributing to 40 per cent of sales in 2022. Fila’s market share in China rose to 7.5 per cent last year from 1 per cent in 2013, according to Everbright.
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“Through the acquisition of overseas brands, Anta can boost its influence on the global market,” Everbright’s Tang said.
“As Anta improves its branding image and builds more complete product line-ups, channels and supply chains, its total size is expected to move up by one notch.”
